Written by
Ryan Van
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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.
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.
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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.
