The number of Aussies moving to food delivery is rising. Delivery services like Uber Eats, Menulog, and DoorDash are offering good job opportunities. But at the same time, the tax obligations of these individuals should also be taken into account. Today, in this blog, we will take a look at Uber Eats’ tax obligations to other delivery drivers.

Let’s get ready for the tax season!

Income Reporting

Assessable Income

Any money that you earn as a delivery driver is considered assessable income as per the ATO rulebook. So, you have to report this income on your tax return. It doesn’t matter whether you are doing the job part-time or full-time; you will have to declare it on your tax return. Make sure you keep track of everything you earn via delivery to ensure you report the exact amount while lodging your returns.

ABN Requirement

Australian Business Number is a must if you want to work as a delivery driver. It classifies you as a contractor, which means you will have your own tax obligations. If you already have an active ABN, you can use it for your routine deliveries until it stays active. If you don’t have an ABN, you can get one via the Australian Business Register’s website. If you don’t even want that headache, our experts at Nanak Accountant can get the job done for you. Website.

GST Obligations

When is GST Registration Required?

GST registration is not mandatory for food delivery drivers if they are making $75,000 per year from their delivery activities. So, if you deliver only food, you might not need a GST registration. However, if you drive for rideshare services like Uber, GST is mandatory. This registration will apply to all your business activities, including food delivery. If you exceed the $75,000 threshold, you must register for GST and lodge Business Activity Statements (BAS).

Mixed Activities

Here’s one important fact that a lot of people ignore. If you split your time between ridesharing and food delivery, your GST obligations extend to all your business activities. This means you will have to account for GST on both rideshare and food delivery income. It’s essential to keep detailed records of your earnings and expenses for both activities to accurately complete your BAS.

Tax Deductions for Delivery Drivers

What You Can Claim

There are numerous deductions that you can claim as a delivery driver. This can significantly reduce your tax obligation. You can claim deductions on:

• Any commissions or service fees paid to the delivery platform.
• Expenses for tolls and parking fees while working.
• Costs for renewing your vehicle license and registration.
• A portion of your phone bills are related to work activities.
• Costs for fuel, maintenance, repairs, and depreciation of your vehicle.
• Items such as high-visibility vests and other protective gear.
• Premiums for insurance related to your delivery work.
• Fees paid to tax agents or accountants.
• Expenses for PPE equipment like masks, gloves, and sanitisers.

What You Cannot Claim

Now that you know about the tax deductions you can claim, there are certain things you cannot claim. This includes:

• Costs of obtaining or renewing a standard driver’s license.
• Any fines for parking or speeding.
• Regular clothing, even if worn while working.
• Food and beverages are purchased during your shifts.

Why is Record Keeping Important?

If you want to claim deductions, you must keep a proper record of all your work-related expenses. This record includes your receipts, invoices, and bank statements. We strongly recommend that delivery drivers should maintain a logbook for all their vehicle expenses. This logbook should record the dates and kilometres you drove for the work. An accurate logbook helps substantiate your claims for fuel, maintenance, and other car expenses.

How to manage your taxes?

Saving for Taxes

Make sure you set aside around 30% of your income to cover your tax bills. While this can be optimized when you take help from experts like Nanak Accountants, it’s better to be safe than sorry. Setting aside a certain amount ensures you have enough funds to pay your taxes, and you get no big surprises on your tax liabilities. The best way is to set up a separate bank account where you can put only money to secure money for your taxes.

Lodging Your Tax Return

Make sure you lodge your returns on time. Do not leave out any critical information like income and expenses of your delivery activities. If you earn from multiple sources like ridesharing and food delivery, make sure you maintain your track records accurately. Even better, outsource your tax return filing to an expert like Nanak Accountants. They can help you out with your taxation and return filing.

Superannuation Contributions

When you work as a delivery driver, you are a contractor. So you will have to contribute to superannuation. So make sure you set aside some funds for your super, as these contributions are not automatic. You can contribute to your superannuation fund yourself so that you have enough savings when you retire.

Wrapping Up

ATO has kept taxation quite simple for food delivery drivers. But still, you will have to maintain a lot of records to make sure you do not pay more tax than you have to. Make sure you maintain a track record of all the expenses and income. Such detailed records will simplify your tax deduction claims and bring down your taxable value. But these tasks demand a lot of effort. So why spend your time on such redundant things when experts like Nanak Accountants can take care of them?

At Nanak Accountants, we are here to help you with your tax needs. We can assist you with getting your ABN, lodging your returns, and maintaining records. When you have these things taken care of, you can focus more on your delivery duties and can earn more. So get in touch with our experts today, and we will manage the rest.