Tax Deductions for Uber Eats and Other Delivery Drivers
According to statistics, busy Australians have an obsession with food delivery. Recent research shows that Australians spend over $2.6 billion each year on food and drink delivery through companies such as Menulog, UberEats and Deliveroo. Increased demand for food delivery services has led to an increase in the number of food delivery drivers. Like any activity that produces income, there are tax implications involved. Here's what you need to know about reporting your income and lodging your tax as a food delivery driver.
If you work as a delivery driver for a food delivery service like UberEats or Deliveroo, any money you earn is considered assessable income which you're required to report in your tax return.
You may have read that ride-sharing drivers for companies like Uber or GoCatch are required to register for GST. While this is the case for rideshare drivers, this is not the case for UberEats and other food delivery drivers. However, like any other occupation, standard GST rules apply and if you earn over $75,000 per year from your food delivery activities, you're required to register for GST.
Regardless of how much you earn as a food delivery driver, you still need to report income and expenses in your tax return.
Food and passengers
Within the gig economy, it's common for people to work as both ride sourcing drivers and food delivery riders. From a tax perspective, this can make your taxes tricky.
If you deliver for UberEats and drive for Uber or split your time between ridesharing and food-delivery driving, you will need to register for GST. And your GST obligations will apply to all of your business activities (including the food delivery part), not just the rideshare portion.
How to lodge
To work as a food delivery rider, you need an ABN as you'll be paid as a contractor. From a taxation perspective, this means you're responsible for paying any tax on your earnings as well as looking after your superannuation contributions. If you already have an existing ABN, you can use this as long as it's active.
Delivery driver tax obligations
Regardless of how much you make, according to the ATO, any income you earn as a food delivery driver must be declared on your tax return. It's common for delivery drivers to have another job or receive an income from other ridesharing activities. In this case, you should aim to save at least 30% of your income to avoid a big tax bill.
If you're unsure how much you should be saving for tax or whether you need to register for GST or lodge BAS – seek help from an experience H&R Block accountant.
Delivery driver deductions
Like any business, there is a range of tax deductions you could claim as a delivery driver. Generally speaking, you may be eligible to claim:
- Commissions, licensing or service fees paid to the food delivery platform you deliver for
- Renewing vehicle licensing or registration
- Mobile phone bills
- Car expenses
- Safety equipment (such as hi-vis vests)
- Personal protection equipment
- Costs of cleaning, servicing and repairing your car, scooter or bike
- Tax agent/Accountant fee
- Bank fees (if you maintain a separate account for your food delivery work)
You cannot claim deductions for:
- Costs of obtaining a normal driver license
- Fines from parking, speeding, etc.
- Clothing other than safety clothing
- Meals and drinks purchased while on shift
If you do plan on claiming any deductions, you need to keep a record of any business-related expenses you intend to claim on your tax return. That could include receipts, expenses and bank statements. In some cases, you may need to keep a logbook to support your vehicle deductions. You should also keep statements showing your income from delivery driving. In some cases, you may need to keep a logbook showing the work portion of travel.
The ATO is clamping down on higher than usual claims, so to avoid accidentally over-claiming, be sure to keep evidence of all expenses to support your claim. Many delivery companies now provide data directly to the ATO who will then match this with the income your show on your tax return. This means it is essential that you accurately report your income.
As experienced tax professionals, H&R Block knows the ins and outs of delivery rider specific exemptions, allowances and tax treatments. Don't leave your deductions to chance, find your nearest H&R Block office and book an appointment with one of our tax experts today.
Updated 8 April 2020
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