Uber Tax Return in Australia: A Complete Guide for Drivers
- Jun 24
- 9 min read
Updated: Jul 5
Reality of Uber Driver Tax Filing (Uber Tax Return)
New Uber drivers often find themselves surprised during tax season with unexpected tax bills. Many assume that the small earnings from weekend gigs won't amount to much, only to be shocked by the actual taxes owed. Why does this happen? The most common misconception is believing that "Uber will handle all my taxes for me."
Tax Obligations as an Independent Contractor
In Australia, Uber drivers are classified as independent contractors, not employees. This means Uber is not your employer and does not withhold taxes on your behalf for the Australian Taxation Office (ATO). Even if you earn around $500 a month, you are responsible for reporting this income. The tax obligations for Uber drivers are clearly defined, and preparing for an 'uber tax return' is a personal responsibility.
This responsibility requires you to report Uber income along with all other earnings. For example, if you work part-time in a café during the week and drive for Uber on the weekends, you need to combine your café wages and Uber income for your annual tax report.
Australia's Fiscal Year and the Importance of Comprehensive Reporting
Australia's fiscal year runs from July 1 to June 30 of the following year. This may initially seem unfamiliar. For instance, if you start driving for Uber in May 2025, the income for May and June should be reported in the tax period starting July 1, 2025.
What happens if you don't file taxes correctly? The ATO can track individual income activities through various means. If unreported income is discovered, significant penalties and interest can be imposed. What started as a small side job can become a significant tax issue, making it crucial to keep thorough records and report accurately from your first year of income. Check our Australian Tax Refund Maximization Guide for additional tax-saving strategies. Getting it right from the start is key to successful Uber driving.
Practical Roadmap from ABN to Reporting Preparation
If you ask a veteran Uber driver what they would do differently if they started over, most would emphasize 'recordkeeping'. Many new drivers think that the Annual Tax Summary from Uber is all they need for tax preparation, but this is not the case. A systematic preparation process is essential for a successful first tax filing.
Starting Right: ABN Application and Recordkeeping
Everything begins with applying for an Australian Business Number (ABN). While the application is straightforward, many make mistakes by neglecting the 'business activity description' section. Clearly specify 'Rideshare Driver' or 'Taxi Driver'. Choosing the correct industry code (ANZSIC code), is also important. The ABN signals the official start of your Uber activity and marks the beginning of your obligation to record all income and expenses.
Uber's summary provides basic information like total revenue and Uber fees, but reporting directly from it can lead to missed deductions.
Actual tax filing requires subtracting various expenses from this taxable net income to determine the final tax owed. Thus, a habit of managing records yourself is vital. Here are the records you must keep separately:
Logbook: Essential for calculating the ratio of total driving distance to Uber driving distance. It must be meticulously maintained for at least 12 consecutive weeks.
All related receipts: Keep documentation of fuel costs, vehicle insurance, repairs, communication costs, and cleaning supplies digitally or physically.
Weekly income/expense summary: Regularly update a simple spreadsheet or expense tracking app with Uber app earnings and expenses each week.
These records are key to maximizing tax deductions when filing. For instance, you can accurately claim vehicle-related costs based on your logbook. For more details, refer to our Australian Vehicle Expense Tax Deduction Guide. Although initially cumbersome, consistent effort over a few months makes year-end tax filing much smoother.
Uber Driver Tax Filing Preparation Checklist
Preparing for your first tax filing can be daunting. The checklist below organizes the process from ABN application to documentation preparation in a clear format. Review the necessary documents and completion timing for each stage to prepare in advance.
Using this checklist prevents panic during tax season and helps ensure calm preparation. Especially with logbook and receipt storage, forming habits from day one is recommended.
Pitfalls and Solutions in Calculating Uber Income
Accurate income tracking is the first step to a stress-free Uber tax return.
Preparing for your first tax filing as an Uber driver can be confusing due to the difference between income shown in the Uber app and the actual amount reportable to the Australian Taxation Office (ATO). Many think, "Can't I just report the money that goes into my account?" Unfortunately, this is a common mistake in tax reporting.
Why Do App Income and Actual Reported Income Differ?
The ATO considers the total fare charged to passengers as the business income for drivers. This includes Uber's fees, airport fees, and reservation fees. Meanwhile, the money deposited into your bank account is the total fare minus Uber's share.
For example, if a passenger pays a $40 fare and the Uber fee is $10, $30 is deposited into your account. However, for tax reporting, the income is considered $40, and the Uber fee of $10 is treated as a separate business expense. Understanding this simple difference is the first step to accurate tax reporting.
Organizing Income Details and Comprehensive Reporting
With weekly varying earnings from Uber driving, accurately determining annual total income is crucial. Fortunately, Uber's Annual Tax Summary provides well-organized details of total fares and various fees, so make use of it. If you receive cash tips, remember to include these in your taxable income.
If you have a salaried job and drive for Uber as a side gig, tax calculations become a little more complex. In this case, Total Taxable Income equals your salary plus Uber net income (total fares - expenses). For example, if your salary is $60,000 and you earn $10,000 in net Uber income, your taxable income is $70,000, subject to the applicable tax rate.
Uber driving is becoming an increasingly popular income source in Australia. As shown by Uber's 2024 performance report, its global growth trend is leading to an increase in drivers in the Australian market, underscoring the growing importance of accurate tax knowledge.
Notably, rideshare drivers in Australia must remember that GST registration is mandatory regardless of income size. Even if annual income does not exceed the $75,000 GST registration threshold, you must register for GST from the moment you start driving and submit a BAS (Business Activity Statement) quarterly. Missing this requirement can lead to penalties, so caution is necessary.
Comprehensive Guide to Missed Deduction Opportunities
The key to successful Uber tax refunds lies in deductions. The more diligently you claim expenses, the more your refund increases or the less tax you owe. While most drivers ensure to claim obvious items like fuel and vehicle insurance, many miss opportunities to save on taxes in unexpected areas.
One driver, who filed taxes for the first time last year, was surprised to learn that expenses for car cleaning products or bottled water for passengers could be deducted. Such small expenses can add up to hundreds of dollars in annual tax savings.
How to Separate Personal and Business Costs?
A common concern for Uber drivers is how to separate costs that blend personal and business use. Phone bills and vehicle-related costs are typical examples. The Australian Taxation Office (ATO) requires you to calculate and report business use percentages based on reasonable evidence.
For instance, if your monthly phone bill is $60 and you used 30% of your total usage for Uber driving (app usage, calls with passengers, etc.), you can claim $18 (30% of $60) as a business expense each month. To prove this, it's helpful to pre-calculate your business usage percentage based on a month's worth of call and data usage records. Vehicle expenses are also deductible according to the business use percentage calculated from the logbook.
Surprising Deductible Items
Here are some business expense items that are easy to overlook but are eligible for deduction. Just keep the receipts!
Vehicle interior supplies: Bottled water, candy, tissues for passengers
Cleaning supplies: Car detergents, wax, air fresheners, and car wash costs
Music streaming services: Subscription fees for services like Spotify or Apple Music for playing music during rides (business use percentage applied)
Stationery: Notebooks or pens needed for logbook records
Bank fees: Various fees for maintaining a business account
Accountant fees: The full cost of hiring an accountant for tax filing
These items, though seemingly trivial, are all legitimate business expenses. The most important thing is to maintain a habit of keeping tax invoices for all expenses. Save digital receipts received via email in a dedicated folder and take photos of paper receipts to store in the cloud for convenience. For broader information on personal tax deduction items, check out our Individual Tax Deductions Guide.
Which Method for Vehicle Expenses is More Advantageous?
There are two main ways to claim vehicle expenses. The first is the actual expense (Logbook method), which involves claiming all actual costs (fuel, insurance, repair costs, etc.) based on the business use percentage. The second is the Cents per Kilometre method, which calculates deduction based on a fixed rate per kilometer driven.
Typically, the actual expense method, including vehicle depreciation, is more advantageous for full-time drivers who actively engage in Uber driving. Conversely, for those who drive occasionally as a side job and do not exceed 5,000 km annually, the Cents per Kilometre method is simpler in terms of paperwork and might be a better choice. Carefully evaluate your driving patterns to determine which method offers greater tax savings, and calculate this ahead of time for a wise first step in tax filing.
Practical Guide to Tax Filing
Opening the myTax screen for the first time can be daunting with its many fields. Don't worry; it's a common experience. Especially since Uber income differs from regular salary income, it must be entered in the 'Business/sole trader income or loss' section of myTax, which can be confusing.
Entering Uber Income in myTax
The first step is to log into myTax, verify personal information and other income details, then navigate to the 'Business Income' section. Here, you record all business activities under your ABN.
After moving past this screen to the business income section, open your Uber Annual Tax Summary and accurately input the following items:
Total Business Income: The most common mistake is entering only the amount deposited into your bank account. This field should reflect the total fares (Gross Fares) charged to passengers, inclusive of Uber fees.
Business Expenses: Enter the total of all deduction items meticulously organized in the previous section here. This includes fuel, insurance, repair costs, depreciation, phone bills, and even Uber fees included in the total fares.
Remember to report the entire total fare as income and treat Uber fees as expenses for accurate reporting. Before hitting submit, double-check all figures and ensure no deduction items are overlooked.
Seeking Professional Help: Accountant vs. Self-Filing
Using myTax for self-filing has the major advantage of being free. However, for first-time filers or those with complex deductions, there is a risk of small errors. In such cases, hiring a tax accountant might be worth considering.
The cost of hiring an accountant is fully tax-deductible and typically ranges from $100 to $275. With professional help, you can uncover easily missed deduction items and reduce the risk of ATO audits, ultimately receiving a larger refund or owing less tax.
For example, calculations involving vehicle depreciation or complex cost allocation are often best left to professionals, saving you time and effort. Considering the inconvenience and potential errors of self-filing, the cost of an accountant can be a worthwhile investment.
Post-Filing Management and Next-Year Strategies
Once you've hit the submit button on your tax return, you can breathe a sigh of relief, but Uber driver tax management doesn't end here. Filing is not the end; it's the beginning of a new cycle. It's crucial to check if you have any refunds coming your way or any additional taxes to pay.
After Tax Filing: What Comes Next?
Typically, once you complete your online filing, the Australian Taxation Office (ATO) processes refunds within two weeks. However, sometimes document reviews may take longer. If the ATO requests additional information or an audit notice, don't panic. Although rare, if you have kept all records well-organized, you can respond calmly. Hence, maintaining all receipts and logbooks for at least five years is crucial.
Preparing Wisely for Next Year
Want to breeze through next year’s tax season? Start preparing systematically now.
Create Your Record-Keeping System: Spend just 30 minutes at the end of each month organizing fuel receipts, vehicle maintenance costs, and communication expenses in a spreadsheet or accounting app. It's much easier and accurate than doing it all at once at year-end. Use the ATO app to photograph paper receipts for worry-free management.
Don’t Forget GST and BAS Filings: Rideshare drivers like Uber must register for GST regardless of income size, meaning you must submit a Business Activity Statement (BAS) quarterly. While it might seem complex initially, if your income and expense records are well-organized, BAS filing is simpler than you think. Missing BAS submission deadlines can incur penalties, so mark them in your calendar in advance.
Driving on Multiple Platforms: If you use platforms like Ola or DiDi in addition to Uber, you must report all income as a single business entity. Since each platform has different fee structures, keeping income and expenses separated by platform makes reconciliation easier later.
Planning and preparing your taxes in advance is essential for successful Uber operations. Our Tax Refund Calculator can be a useful tool to estimate your refund in advance.
Tax matters are complex and time-consuming. Baron Tax & Accounting provides professional services to save your valuable time and maximize your tax refund. Get expert assistance today at Baron Tax & Accounting.
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