Chartered Accountant Timothy Quinn leads Tax & Accounting at Lawpath. 16+ years in tax advisory, specialising in startup growth and expansion. Passionate about supporting entrepreneurial clients with early-stage investment incentives, restructuring, international exit strategy planning, and more.
Earning money through Uber, DiDi, Ola, or similar ride‑share platforms can be flexible and rewarding — but tax time often brings confusion. Many drivers either under‑claim deductions and miss out on legitimate tax savings, or over‑claim and risk Australian Taxation Office (ATO) penalties.
All income from ride‑sharing is taxable in Australia, whether you drive full‑time, part‑time, or as a side gig. This guide explains what income you must declare, which deductions you can claim, and how to stay ATO‑compliant without stress or guesswork.
Table of Contents
Income you must declare as an Uber or ride‑sharing driver
Any income you earn from ride-sharing is assessable under Australian tax law — nothing is automatically “pre‑taxed.”
Your gross income includes:
- Passenger fares
- Surge pricing and incentives
- Tipping or bonus payments
- Any platform-related rewards
Even if you have a PAYG job, you’ll still need to declare side income from Uber or similar platforms on your tax return.
While Uber’s statements show payments and fees, platform commissions do not automatically reduce taxable income. The ATO expects you to declare all income before deducting these expenses.
Tax deductions for Uber drivers
A tax deduction reduces your taxable income by letting you subtract eligible work‑related expenses from your total earnings before tax is calculated. In practice, this means that the more legitimate expenses you can substantiate, the less of your ride‑share income the ATO will tax.
To qualify as a deduction for Uber and ride‑share driving, an expense must:
- Be directly connected to earning your ride‑share income (for example, fuel used while you are online and available for trips, or phone data used for the driver app).
- Not be private or domestic in nature, like personal trips, everyday clothing, or meals that are not specifically required for your work.
- Not be capital in nature, unless you are claiming it under depreciation or an instant asset write‑off where the rules allow it (for example, a dash cam or phone purchased primarily for ride‑share use may need to be depreciated rather than fully deducted in one year).
The ATO also expects you to have evidence or a reasonable calculation method to support what you claim. Without records, the ATO can refuse all or part of a deduction, even if the expense was genuinely incurred for ride‑share work.
Most importantly, just because an expense “feels” work‑related does not automatically make it deductible. Things like nicer clothes to look professional, coffees between trips, or the private portion of your car costs are generally not claimable, even if they help you feel more prepared or comfortable while driving.
Common tax deductions Uber drivers can usually claim
So, what can you actually claim as a legitimate ride-sharing tax deduction? Let’s take a closer look.
Car expenses related to ride‑sharing
You can usually claim a portion of the following costs, such as:
- Fuel
- Servicing and repairs
- Insurance (for the business portion)
- Registration (business portion)
Apportionment is required for any private vs business use of your car. You cannot claim 100% unless your vehicle is used exclusively for ride‑share driving.
Phone and data usage
You can claim phone and data usage for navigation apps, ride-share platforms, and customer communication. You’ll also need to apportion these claims between business and personal use, with records or a reasonable basis for the calculation.
Cleaning, car washes, and vehicle presentation
Car washing and cleaning costs related to keeping your vehicle presentable for passengers are deductible. However, personal grooming items or detailing unrelated to business use are not.
Platform fees and commissions
Service fees or commissions taken by Uber, DiDi, or Ola are deductible business expenses, as they directly reduce your income from fares.
Safety and minor equipment
Common deductible items include:
- Dash cameras for safety
- Phone mounts and chargers
- First‑aid kits or cleaning equipment
Note that higher‑priced equipment may be considered capital assets, so you’ll need to depreciate it over time rather than deducting it immediately.
Expenses Uber drivers usually cannot claim
These expenses are non‑deductible or partly disallowed:
- Private trips or commuting to your first passenger
- Personal meals, snacks, or coffee
- Ordinary clothing (not protective or distinctive)
- Traffic or parking fines
- Claiming 100% of car costs without accurate apportionment
Over‑claiming can attract ATO scrutiny and penalties. If you’re not sure what you can and can’t claim as legitimate deductions, get in touch with a professional tax accountant. They can help you sort out your taxes and mitigate the risk of penalties and audits.
Tax deductions for Uber drivers in Australia: Summary table
Here is a quick summary of what you may or may not be able to claim. Remember that specific claims will depend on your actual situation, and this table is for reference only.
| Expense category | Usually can claim? | Notes |
| Fuel | Yes (portion) | Only the business‑use percentage based on kms or logbook; private driving is not deductible. |
| Car servicing & repairs | Yes (portion) | Deductible to the extent the car is used for ride‑share; keep invoices and usage records. |
| Registration | Yes (portion) | Business‑use portion only; include CTP where applicable. |
| Car insurance | Yes (portion) | Claim only the business percentage; ride‑share/commercial cover is generally acceptable. |
| Depreciation on the car | Yes (portion) | Claimable under the logbook method; subject to ATO car cost and depreciation rules. |
| Tolls & parking (on trips) | Yes | Only when incurred while working or travelling between passengers, not for private trips. |
| Car washes & cleaning | Yes | Cleaning to keep the vehicle presentable for passengers is generally deductible. |
| Phone & data | Yes (portion) | Apportion between personal and ride‑share use; keep a usage pattern or diary as evidence. |
| Platform fees & commissions | Yes | Fees charged by Uber/DiDi/Ola are directly related to earning income and are deductible. |
| Safety & minor equipment | Yes / sometimes | Items like dash cams, phone mounts, and first-aid kits; either immediately deductible or depreciated. |
| Accounting & tax advice | Yes | Fees for preparing your tax return or getting advice about ride‑share income are deductible. |
| Private trips | No | Kilometres and costs for personal use or commuting are not deductible. |
| Personal meals & coffee | No | Everyday food and drink are private, even if bought while you’re online waiting for trips. |
| Ordinary clothing | No | Regular clothes to “look professional” are private and not deductible. |
| Fines & penalties | No | Parking fines, speeding fines, and other penalties are specifically non‑deductible. |
| Full 100% of car costs | No (unless 100% work use) | You must apportion between business and private; claiming 100% is rare and risky. |
| Home to first passenger travel | No | Travel from home to your first pick‑up is generally treated as private in most cases. |
How car expense deductions work for ride‑share drivers
Car expense deductions can get confusing because you need to clearly apportion business versus personal use. This is critical to avoid penalties and scrutiny from the ATO. But how can you get this right?
There are two main methods:
Cents‑per‑kilometre method
Under this method:
- You can claim a set rate per business kilometre (up to the annual limit).
- You don’t need receipts, but you must keep a reasonable car log or records to support the kilometres travelled.
- It’s simpler, but often less flexible for high‑usage drivers.
Logbook method
You track all car travel over a 12‑week representative period and calculate your business-use percentage.
- You then apply this percentage to your car expenses (fuel, registration, insurance, depreciation, etc.).
- Requires more detailed records but gives more accurate claims, especially for part‑time drivers.
Ultimately, the cents‑per‑kilometre method suits occasional or low‑kilometre drivers. Meanwhile, the logbook method is best for regular or high‑use drivers who want to capture real costs.
Choosing incorrectly can lead to either under‑claiming or compliance issues.
GST obligations for Uber and ride‑sharing drivers
Unlike other small businesses, GST registration is mandatory for ride-sourcing drivers, regardless of their turnover. This means that you must:
- Charge GST on fares.
- Lodge Business Activity Statements (BAS), typically quarterly.
- Claim GST credits for business-related expenses (e.g. fuel, tolls, car repairs).
Your app may display GST amounts, but the responsibility to register, lodge, and pay remains with you, not the platform.
Remember that GST and income tax are separate: GST is reported on your BAS, while your ride‑share profits are reported in your annual tax return.
Record‑keeping requirements for Uber drivers
Records are crucial for both income and deductions from ride-sourcing. These are your best defence if the ATO questions your claims. You must keep:
- Invoices, receipts, and digital copies for all claimed expenses
- A logbook or trip records for car use
- Kilometre tracking (apps or odometer readings are acceptable)
- Records for at least five years after lodging your return
Digital storage is a great idea for simplifying record-keeping and ensuring that you have everything readily available. However, discipline is essential. While you can claim some small expenses without a receipt, larger categories will need proof.
Making mistakes on ride-sharing drivers’ tax deductions
The ATO receives data directly from Uber and other platforms, enabling automatic data‑matching. This means that incorrect or inflated claims can trigger:
- Amended assessments and back taxes
- Penalties and interest
- Administrative stress correcting past returns
Honest mistakes are often resolved, but consistently poor record‑keeping or over‑claiming can result in audits. Staying proactive is always cheaper and less stressful.
When Uber drivers should speak to an accountant
Seek advice if you:
- Combine ride‑share with PAYG work.
- Need help registering for GST or lodging BAS.
- Aren’t sure which car expense method suits you best.
- Are catching up on missed years or inconsistent income reporting.
Professional advice through trusted platforms like Lawpath can save time, money, and potential ATO trouble.
FAQ
How much does Uber deduct from drivers?
Uber typically charges around 25–27% in service fees, though this varies by city, trip type, and promotions. Check your weekly statements for specifics.
What are tax deductions for Uber drivers?
Uber drivers can write off legitimate business expenses directly related to driving, such as fuel, cleaning supplies, platform fees, phone usage, and safety equipment. You must properly allocate these expenses and support them with solid records.
Getting your tax deductions right
Getting Uber and ride‑share tax deductions right can make a real difference to your take‑home earnings, but it should not keep you up at night. Staying compliant comes down to declaring all your ride‑share income, only claiming genuinely work‑related expenses, and keeping records that clearly support your claims if the ATO ever asks questions.
If you are unsure about GST registration, which car expense method to use, or how your Uber driving fits with your PAYG job, getting tailored advice will save you more than it costs in the long run.
Get fast, fixed‑fee support from qualified Australian accountants through Lawpath. Get an instant accounting quote now!
