Uber and Rideshare Driver Tax in Australia: What You Actually Owe

🚗 You're running a business, whether you like it or not🔗

The moment you accept your first Uber ride, you're a sole trader. Not a casual earner, not a hobbyist, a business operator with real tax obligations attached.

That's the ATO's position and it hasn't changed. Rideshare income is business income. It goes on your tax return as a sole trader, not as salary and wages. Nobody's withholding tax for you. That job is entirely yours now.

This matters because it changes everything: how you report income, whether you need an ABN, whether you're registered for GST, and what you can actually claim as a deduction.

Not sure whether a side gig has crossed into business territory? The ATO has a clear framework for that distinction, our hobby vs business test guide walks through exactly where the line sits.

The ATO also runs a data-matching program with rideshare platforms. Uber reports your earnings directly to the ATO. If you don't declare it, they already know.

⚡ The GST rule that catches every rideshare driver off guard🔗

This is the one that trips people up. Most Australian businesses only need to register for GST once their annual turnover hits $75,000. Rideshare drivers are a specific, long-standing exception, and it's a big one.

🎯 The essential: If you carry passengers for a fare, you must register for GST from dollar one. There is no threshold. The ATO classes ride-sourcing as taxi travel for GST purposes, and taxi travel has always required GST registration regardless of turnover.

Here's the exact timing, straight from the ATO's own page on ride-sourcing registrations:

• Already have an ABN? You must register for GST within 21 days of the day you start providing ride-sourcing services.
• Starting fresh? Get your ABN and GST registration sorted before your first trip.

Miss this and you're exposed. The ATO can backdate your GST liability to when you started driving, plus interest and potential penalties on top.

One carve-out worth knowing: Uber Eats and delivery-only drivers generally aren't caught by this rule. If you only deliver food and never carry passengers, the standard $75,000 threshold applies to you like any other business. The moment you add passenger trips, the no-threshold rule kicks in for your whole rideshare activity.

Once registered, you'll lodge a Business Activity Statement (BAS) monthly or quarterly and remit 1/11th of your gross fare income as GST. The upside: you can also claim GST credits on your business expenses. For how the standard $75,000 threshold works for other side hustles and small businesses, see our GST registration threshold guide.

💰 How to report your rideshare income🔗

Every dollar you earn from rideshare goes into your tax return as business income. That includes:

• Fares from passengers, the gross amount, before Uber takes its cut
• Tips and bonuses from the platform
• Incentive payments and surge earnings
• Any other payments the platform makes to you

A common mistake is only declaring the net amount that lands in your bank account after Uber's service fee. That's wrong. You declare the gross fare, then claim Uber's commission as a deductible business expense.

You report this in the business and professional items section of your individual return, not as salary and wages. Keep records of everything. Your driver app provides an annual tax summary, but it's worth cross-checking against your own numbers, the ATO can audit up to five years back.

🧾 Deductions: what you can actually claim🔗

The upside of being a business operator: you can claim a proper range of expenses against your rideshare income. The key rule is you can only claim the business-use portion of anything you use for both work and personal life.

Claimable car expenses (logbook method): fuel, servicing and repairs, insurance, registration, decline in value (depreciation), and interest on a car loan, all apportioned to your business-use percentage.

Other deductible expenses: Uber's platform commission, the business-use portion of your phone plan, a phone mount or dashcam, accounting and tax agent fees, and parking incurred during rideshare work.

What you can't claim: personal trips, commuting to your "home base", traffic fines, or the upfront cost of buying the car itself, that's depreciated over time instead.

How the logbook method works: keep a logbook for a minimum continuous 12-week period that's representative of how you actually use the car, don't cherry-pick your busiest weeks. Record the date, start and end odometer readings, kilometres travelled, and the purpose of every trip.

At the end of the 12 weeks, calculate your business-use percentage: business kilometres divided by total kilometres, times 100. Drive 8,000 km during the logbook period with 5,600 km of rideshare trips, and your business-use percentage is 70%. Apply that 70% to your total car expenses for the year. Spend $12,000 on the car and you can claim $8,400.

Once you've done a logbook, it's valid for five years as long as your usage pattern doesn't change significantly. You still need to record odometer readings at the start and end of each financial year.

📊 Logbook vs cents-per-km: which method wins?🔗

Neither method is universally better, it depends on how much you drive and how high your actual car costs are.

Say you drove 20,000 business km in 2025-26 with total car costs of $15,000 at a 75% business-use rate. The logbook method gets you a $11,250 deduction. Cents-per-km caps out at 5,000 km, worth only $4,400. For anyone driving rideshare seriously, the logbook method almost always wins, the 5,000 km cap makes cents-per-km a poor fit once you're doing this regularly. It's really only worth using if you're just starting out with a handful of trips a week and don't want the admin of a logbook.

🗓️ Your tax obligations checklist🔗

Before your first trip:

• Get an ABN if you don't already have one
• Register for GST, no exceptions, no threshold
• Set up a way to track rideshare income and expenses separately

Ongoing:

• Lodge your BAS and pay GST, monthly or quarterly
• Keep receipts for every car expense
• Track your kilometres, or run your 12-week logbook
• Record all platform income, including bonuses and incentives

At tax time (31 October for self-lodgers):

• Declare all rideshare income as business income
• Calculate your car expense deduction, logbook or cents-per-km
• Claim platform fees, phone costs and other eligible deductions
• Watch for PAYG instalments, the ATO generally brings you into the system once your instalment income is $4,000 or more and the tax payable on your latest assessment is $1,000 or more
• Keep all records for at least five years

Consider a tax agent for your first year. A registered agent can lodge until May the following year, and their fee is itself deductible.

❓ Frequently asked questions🔗