Do I Need to Pay GST for Uber Eats? (2024 Update)

Written by

Ryan Van

Are you a driver for a food delivery service like Uber or thinking about getting into it? Find out here if you need to pay GST for Uber Eats deliveries. A recent decision by the Australian Taxation Office (ATO) means that all drivers for Uber and other similar “ride-sourcing” services must now pay GST. Unlike most other contractors and businesses, Uber drivers must pay GST regardless of whether they make over $75,000 a year or more. This is because the ATO regards “ride-sourcing” services as falling into the same category as taxi services for the purpose of taxation. However, Uber Eats and other delivery services do not fall into the same category and are not subject to the same taxation rules.

Table of Contents

Australian Business Numbers (ABNs)

If you are a driver for a ride-sharing service, you must register for an Australian Business Number (ABN). Uber will not accept your application to become a driver if you do not have an ABN. You can easily apply for an ABN online and receive it on the same day.

As a ride-share driver, you are considered a sole trader. This means that you are:

  • Providing commercial services
  • Intending to profit from these services
  • Offering your services on a regular basis

You also need to have an ABN in order to register for GST.

Prepare yourself to become an Uber driver today

Start your registration for an Australian Business Number (ABN) in minutes.

Goods and Services Tax (GST)

The Goods and Services Tax (GST) is a tax of 10% on most goods and services in Australia. Some goods and services don’t attract GST but these are limited to:

  • Basic Food – such as unflavoured milk, cream, cheese and eggs;
  • Education Courses, course materials, and related excursions;
  • Medical, Health and Care Services;
  • Medical Aids;
  • Medicines;
  • Goods produced for export
  • Childcare services; and
  • Religious services.

Paying GST to the ATO

The ATO keeps track of who needs to pay GST, and who needs to account for the goods and services GST is charged on, through GST registrations. If you are a supplier of goods or services in Australia, you may need to register for GST if you meet the turnover threshold. This means businesses that have a turnover of more than $75,000 per year need to register for GST. Additionally, GST registration is mandatory for ride-sharing services regardless of whether or not they meet the GST turnover threshold. The ATO defines ride-sharing services on its site. Essentially, if you make your car publicly available for hire through apps like Uber, and transport passengers for a charge, you are a ridesharing service that needs to register for GST.

Do I Need to Pay GST for Uber Eats?

Whether you will have to pay GST when delivering for Uber Eats depends on whether you also drive for a ride-sharing service.

1. Driving for Uber and Uber Eats

If you drive for Uber and Uber Eats you will need to be registered for GST and pay GST on both your rides with Uber and food deliveries.

2. Driving for Uber Eats only

If you deliver for only Uber Eats you do not have to register or pay GST unless your turnover is more than $75,000 a year.

3. Claiming GST credits

You should also note that it is necessary to register for GST in order to claim GST credits. These are essentially deductions of the amount of GST you pay. Specifically, they apply to GST paid on business expenses. In the case of running a business as an Uber driver (for delivery or otherwise), you can claim GST credits on things like fuel, tolls, and service fees charged by the Uber platform. However, you have to keep in mind that these credits only apply in connection with business expenses. So if you use your car for personal purposes as well as for Uber, then you have to apportion your expenses and GST credit claims accordingly. 

Conclusion

When you deliver for Uber Eats you will not need to register for GST unless you earn over $75,000 a year or are also driving for a “ride-sourcing” service. To register for GST you will need an ABN.

Get 30 days free and 50% off for 11 months with MYOB.

Most Popular Articles
You may also like
Recent Articles

Get the latest news

By clicking on 'Sign up to our newsletter' you are agreeing to the Lawpath Terms & Conditions

Share:

Register for our free live webinar today!

Essential Strategic Planning for the New Financial Year

12:00pm AEDT
Thursday 11th July 2024

By clicking on 'Register for webinar' you are agreeing to the Lawpath Terms & Conditions

You may also like

Want to open a pet shop but not sure how? This article teaches

Thank you!

Your registration is confirmed. Keep an eye on your inbox for an email with details on how to watch the webinar.