In this series, we review a range of common questions we receive regarding when it is appropriate to register for an ABN. With more people joining the share economy to earn additional income, find out if you need an ABN for rideshare companies such as Uber.
Do you need an ABN for Uber
If you are a driver for ridesharing services, you must register for an Australian Business Number (ABN) and GST. You can apply for an ABN through LawPath’s ABN registration service. Complete your application within 5 minutes and receive your ABN within 24 hours.
As a rideshare driver you are a sole trader running a business. This is on the basis that you are:
- Providing commercial services;
- With the intention to profit from these services;
- Offering these services on a regular basis; and
- Engaged in business activities such as picking up riders for the reasons stated above.
GST Registration for Uber Drivers
As an Uber driver, regardless of your income, you must account for GST on all earnings. Unlike other small businesses such as online stores and market stalls, rideshare drivers do not qualify for the GST registration threshold of $75,000. This means that if you only make $5 total as a driver, you will need to register for GST and declare the income on your tax return. Drivers are also entitled to a range of tax credits and can claim the expenses related to providing their rideshare services.
Example GST Calculation
You receive a $55 fare from a passenger which includes GST. The GST you pay on this is one-eleventh of the total amount paid by the passenger. Therefore in this scenario, the GST you have to declare and pay is $5. The amount the company gives you after taking their cut from the $55 fare is not the number used to calculate GST.
GST applies only to consumption in Australia. If your rideshare service is based overseas, certain payments can be exempt from GST as they are not consumed in Australia. Examples of this include bonus payments for referring new customers.
Independent Contractor v. Employee
At present, rideshare drivers are considered independent contractors based on a range of factors. These include the driver’s ability to choose their own hours and personal ownership of the vehicle. Check out our previous guide for more information on the difference between an employee and independent contractor.
Apply for your ABN and start driving today. Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.