Are you an Uber driver or considering becoming an Uber driver?
There are important things to consider regarding how you manage your taxes.
How to make your Uber business a success
The ATO has advised people who are taking up ride-sourcing to earn income should:
- Set up a bank account you use only for Uber income & expenses (making it easy to keep track of Uber related transactions)
- Get an Australian business number (ABN)
- Register for GST, regardless of how much you earn, and pay GST on the full fare received from passengers for each trip they provide;
- Keep good records so you can declare the correct income and claim maximum deductions. We have special online accounting software which can help you with all your admin records;
- Keep a logbook for your vehicle (must be kept for 12 consecutive weeks and record all trips)
- Save for your tax bill and your GST obligations
- Use a tax agent and get your Uber driver taxes right! A tax agent can help to maximise your deductions and help you to plan a weekly tax savings plan to avoid a shortfall at tax time
You are also entitled to claim income tax deductions and GST refunds on expenses apportioned to the ride-sourcing services you supply.
Uber do not withhold any taxes and you are responsible for your own tax obligations. This means that any money you make from Uber counts as income, meaning you must declare this income on your tax return. Remember that if clients can find you so can the ATO!
During your first year as an Uber driver, it is important to put aside some of your income to pay your taxes. Depending on your situation, you may need to set aside as much as 30-40% of your income to cover your tax obligations. After your first year in business as an Uber driver, the ATO may ask you for quarterly tax instalments in advance (based on the income you earned during your first year).