One  of the most common questions we receive from Uber drivers is about how  GST on Uber Income and GST on Uber Fees works. To make things even more  confusing, Uber have changed their legal structure effective from the  1st of December 2017, which in turn changes the way GST on Uber’s  Service Fee is calculated. In this article we’ll explain how the ATO  charges GST on your Uber fares and Uber fees. 

Uber structure their contracts and service agreements so that for every ride there are two separate transactions:

• You provide a ride to a rider
• The rider pays you for the ride
• Even though the money is collected by Uber on your behalf, it is still YOUR business income

• Uber provide an app and payment system
• You pay a fee to Uber to use this
• This is a business expense to you

Of  course from your perspective this is all one transaction. Uber make  things more convenient for everyone by collecting the fare from the  rider on your behalf, deducting their fee automatically, and depositing  the net difference into your bank account. But legally, and in the eyes  of the ATO, two separate transactions occurred, and this is how it must  be declared in your BAS and Tax Return.

Let’s look at these transactions and their GST implications in more detail.

The first transaction is the Fare. This is a  transaction directly between you and your rider. It includes all amounts  paid by the rider, such as Split Fare Fees, Airport Fees, City Fees and  Booking Fees. Even though you pass the Split Fare Fees, City Fees and  Booking Fees on to Uber, you still have to declare two separate  transactions. You declare the amounts received from the rider as income,  and then claim the payment to Uber as a deduction to cancel out the  income.  

Your income also includes Miscellaneous Payments from Uber, for example referral fees for referring another driver.

Under  Australian tax law, Uber drivers are required to be registered for GST.  As a GST-registered business owner, you are required to pay 1/11th of  your gross income to the ATO as GST.   This means you must pay GST on  all amounts you receive from your passenger or from Uber.  

Here’s an example:

Income:

• Gross Fare – $110.00
• Airport Fee – $4.40
• Booking Fee – $2.20
• Referral Payment – $33.00

Total Income = $149.60

GST on Income:

• GST on Gross Fare – $10.00
• GST on Airport Fee – $0.40
• GST on Booking Fee – $0.20
• GST on Referral Payment – $3.00

Total GST Payable = $13.60

If you read the Uber Service Agreement (see point 2) you’ll see the following (edited for clarity):

The  Services (provided by Uber) constitute a technology platform that  enables users of Uber’s mobile applications or websites … to arrange and  schedule transportation and/or logistics services with … independent  third party transportation providers…. You acknowledge that Uber does  not provide transportation or logistics services or function as a  transportation carrier…

Essentially this means that Uber is  just an app/service used by your business. Uber connect you with riders,  set the price and collect payment on your behalf, and in exchange they  charge you a fee, usually 27.5%.  This fee is an expense to your  business which you can claim GST and claim a tax deduction for, just  like you claim for your fuel or phone bill. 

Changes from 1 December 2017
Prior to 1 December  2017, Uber traded through a foreign company. Since they were not an  Australian company, they were not registered for GST. This meant they  did not charge you GST on their 25% service fee, which in turn meant  there was no GST for you to claim back as you didn’t pay any in the  first place.  
Effective from 1 December 2017 Uber changed to an  Australian GST-registered company. This means they now charge GST on top  of their 25% service fee (i.e. they charge 27.5%). You can then claim  this GST back on your BAS.  So from your perspective there is no  difference to your out of pocket cost, your net fee after claiming back  the GST is still 25%, just as before.

You will also pay to Uber any Split Fare Fees,  City Fees (if they apply in your city) and Booking Fees you collected  from your rider on Uber’s behalf (they deduct these automatically). You  can claim the GST back on these too, just like the Service Fees. As  mentioned before, even though they cancel out to zero, we have to  declare both sides of this transaction separately, the fee you receive  from the rider as income and the payment back to Uber as an expense.

Depending  on where you live, you may incur Tolls or Airport Fees as part of  giving a ride, which are of course a deductible expense. Uber  automatically charges your rider a fee to compensate you, which is  income to you (as mentioned above).  So again the income and expense  cancel each other out, but they still have to be reported separately.

Here is an example of the GST on the various fees and expenses, continued from our example above:

Expenses:

• Uber Service Fee (paid to Uber) – $30.25
• Airport Fee (you paid at the airport) – $4.40
• Booking Fee (paid to Uber) – $2.20

Total Expenses = $36.85

GST on Expenses:

• GST on Uber Service Fee – $2.75
• GST on Airport Fee – $0.40
• GST on Booking Fee – $0.20

Total GST Claimable = $3.35

Let’s put the above figures together to calculate the Net GST bill for our example:

• Total Income = $149.60 / 11 = $13.60
• Total Expenses = $36.85 / 11 = $3.35

Net GST Payable = $13.60 – $3.35 = $10.25

Of  course you can then also claim the GST on any other business expenses,  such as fuel, mobile phone,insurance and etc. to reduce your GST bill further.

As an Uber  driver, there are a range of tax deductions you can claim. Here are  some work-related expenses that become tax-deductible when you drive for  Uber.

In the  Logbook method, you can claim all expenses that relate to the operation  of the car, at your percentage of business use, as established from your  logbook.

The logbook must have been kept for a minimum 12 week  period and you must record the date and mileage of your car at the start  and end of each shift. You should start your logbook when you leave  home and stop when you arrive back home or switch off the app.

Deductions that can be claimed 100% as an Uber expense:

• commissions, licensing or service fees paid to Uber
• costs  of becoming an Uber driver – once you’ve started the official  application process, such as medical and police checks, application fees  etc. Costs incurred before becoming an Uber driver, or before the  application process starts (such as attending information nights) are  not deductible
• passenger costs such as water and mints
• tolls – you can claim tolls while on trips and tolls in between trips as well
• work-related  parking expenses – keep receipts and add them up, or claim up to $200 a  year for your parking charges less than $10 each
• bank fees – only if you maintain a separate account for your Uber work
• tax agent/accountants fee

Deductions that can be claimed as per your car business use portion:

• fuel for the car
• vehicle licensing or registration
• costs  of cleaning – for specific passenger incidents you can claim the whole  amount, but general cleaning costs, such as car washes, must have your  logbook percentage applied
• servicing and repairing the vehicle
• insurance
• tyres
• depreciation on the purchase price of your car – if you own your car
• interest – if you have a loan on your car
• rental/hire/lease fees – if you lease/rent your car
• equipment and accessories – dashcam, seat covers, mobile phone holder, rubber mats

Deductions that can be claimed as per Uber use portion:

• mobile phone bills
• safety  equipment (such as hi-vis vests) and sunglasses – if you use them when  not driving as well you must specify a percentage of Uber use
• Spotify, Pandora or Apple subscription fees
• home office expenses – stationery, computer expenses, a percentage of your home internet bill

• costs of a normal drivers licence
• fines (parking, speeding, etc)
• clothing other than safety clothing
• meals, drinks, etc purchased whilst on shift