What Can Uber and Rideshare Drivers Claim on Tax in Australia?
If you drive for Uber, DiDi, Ola, Bolt, or any other rideshare platform in Australia, the ATO treats your earnings as business income. This means you are entitled to claim a wide range of tax deductions that regular employees cannot access — but it also means you have obligations that many new drivers overlook.
This guide from Trinity Accounting Practice explains every deduction available to rideshare drivers, including vehicle expenses, phone costs, platform fees, insurance, and income tax reporting obligations. We also cover GST registration, which is a mandatory requirement for all rideshare drivers regardless of how much they earn.
How the ATO Classifies Rideshare Drivers
The ATO treats rideshare drivers as sole traders running a business. This classification applies whether you drive full-time or only a few hours a week. As a sole trader, you must have an Australian Business Number (ABN), you must register for GST from your very first fare (this is different from most other businesses — see below), you must lodge quarterly Business Activity Statements, and you must declare all your rideshare income and expenses in your annual tax return.
Failing to meet any of these obligations can result in penalties and interest charges. Our team can help you set everything up correctly from the start.
GST Registration: A Mandatory Requirement
Most businesses in Australia are only required to register for GST once their annual turnover reaches $75,000. However, rideshare driving is classified as taxi travel under the GST legislation. This means you must register for GST from your very first paid trip, regardless of how much you earn.
Once registered, you must charge GST on your fares (the rideshare platform typically handles this calculation), lodge quarterly BAS returns, remit the GST you have collected, and claim GST credits on your eligible business expenses.
Claimable GST credits include GST paid on fuel, car servicing and repairs, insurance premiums, phone bills, and platform commissions. Proper bookkeeping and BAS management ensures you claim all your GST credits and meet your lodgement deadlines.
Car Expenses: The Biggest Deduction
Vehicle costs are typically the largest deduction available to rideshare drivers. You can claim using one of two methods.
Logbook Method
The logbook method is the most accurate and generally the most beneficial method for rideshare drivers with significant business use of their vehicle.
You must keep a logbook for a continuous period of 12 weeks, recording the date of each trip, the odometer reading at the start and end, and the purpose of each trip (business or personal). This establishes your business-use percentage, which you then apply to all your actual vehicle running costs for the year.
Claimable expenses under the logbook method include fuel, registration and insurance, servicing and repairs, depreciation, car washes and detailing, and loan interest on the vehicle. The logbook remains valid for five years, provided your driving patterns do not change significantly.
For cars (vehicles designed to carry fewer than nine passengers and a load of less than one tonne), the depreciation cost limit for the 2024-25 income year is $69,674. This means you can only claim depreciation on the first $69,674 of the vehicle cost, regardless of the actual purchase price.
Cents per Kilometre Method
This is a simpler method but is capped and generally less beneficial for drivers with high business use. You can claim 88 cents per kilometre for the 2024-25 income year, up to a maximum of 5,000 business kilometres per year. That equates to a maximum deduction of $4,400. You do not need a logbook, but you must be able to show how you calculated your business kilometres.
If you use the cents per kilometre method, you cannot separately claim any other car running costs such as fuel, insurance, or depreciation. For most rideshare drivers who drive regularly, the logbook method will produce a significantly larger deduction.
Other Deductible Business Expenses
Mobile Phone and Internet
If you use your personal phone for the rideshare app, GPS navigation, or communicating with passengers, you can claim the business-use percentage of your phone and internet costs. Keep a diary of your usage over a representative four-week period to establish your work-related percentage, then apply that to your annual bills.
Tolls and Parking
Tolls incurred while carrying passengers or travelling between pickup locations are deductible. Parking fees at airports or other locations while waiting for fares are also deductible. Personal tolls and parking are not claimable.
Rideshare Platform Fees
Service fees and commissions charged by the rideshare platform are 100 per cent deductible as a business expense. These are typically deducted from your earnings before you receive payment, but you should still record them as both income (the gross fare) and an expense (the platform fee).
Safety Equipment
You can claim expenses for items that help you operate safely, including phone mounts and holders, dash cameras, first aid kits, hand sanitiser, face masks, and gloves. Items costing $300 or less can be claimed as an immediate deduction. Items over $300 must be depreciated over their effective life.
Bank Fees
If you use a dedicated business bank account for your rideshare income and expenses, the account fees and transaction charges are deductible.
Accounting and Tax Agent Fees
The cost of having your tax return prepared and lodged, as well as BAS preparation fees, are fully deductible.
Superannuation
As a sole trader, superannuation contributions to your own fund are not compulsory, but they are a highly effective tax strategy. Concessional (before-tax) contributions up to $30,000 per year for the 2024-25 income year are tax-deductible and reduce your taxable income. This can be particularly valuable for rideshare drivers who have a profitable year and want to reduce their tax bill while building their retirement savings.
Car Loan Repayments and Leases
A common point of confusion for rideshare drivers is whether car loan repayments are deductible. The principal component of a car loan repayment is not deductible — you cannot claim the repayment of the loan itself. However, you can claim the interest component of your car loan, calculated based on your business-use percentage. You can also claim depreciation on the vehicle as a separate deduction.
If you lease your vehicle rather than purchasing it, the business-use percentage of your lease payments is deductible. This can be a simpler arrangement from a record-keeping perspective. Nexus Wealth Partners can help you compare car finance options to find the most tax-effective arrangement.
What Rideshare Drivers Cannot Claim
It is important to understand what is not deductible to avoid triggering an audit. You cannot claim the personal-use portion of your vehicle expenses, fines and penalties such as speeding or parking tickets, personal meals and snacks, clothing that is not occupation-specific or protective, and private travel including your commute from home to your first pickup if you have a regular starting point.
Be particularly careful about overclaiming your business-use percentage for vehicle expenses. If you claim 80 per cent business use, you must be able to demonstrate that with your logbook records. The ATO receives data directly from rideshare platforms and can cross-reference your claimed kilometres against your trip records.
Record-Keeping Requirements
The ATO requires accurate documentation to support all your claims. Keep all receipts and tax invoices for business expenses. Maintain a valid logbook if you are using the logbook method. Download and save your rideshare platform tax summaries and trip reports at the end of each financial year. Record your phone and internet usage over a four-week period to establish your business-use percentage.
You are required to keep your tax records for a minimum of five years from the date you lodge your return. Using accounting software such as Xero makes it much easier to capture receipts, categorise expenses, reconcile your rideshare income, and have everything organised for BAS lodgement and tax time.
Common Mistakes to Avoid
The most frequent errors we see from rideshare drivers include claiming 100 per cent car use when the vehicle is also used personally, forgetting to register for GST from the first fare, using an outdated or invalid logbook that is more than five years old, overlooking platform fees and commissions as deductible expenses, underreporting income (the ATO receives your earnings data directly from the platform and will compare it to your tax return), and failing to lodge BAS on time, which results in penalties and interest.
Get Your Rideshare Tax Right
Rideshare driving offers flexibility, but it also comes with genuine tax and compliance obligations. With the right guidance, you can meet all your requirements and claim every deduction you are entitled to.
At Trinity Accounting Practice, we work with rideshare and delivery drivers across Sydney and Australia. From ABN and GST registration through to logbook setup, BAS lodgement, and annual tax returns, we help you stay compliant and keep more of what you earn.
Trinity Accounting Practice
Accounting Firm in Beverly Hills, Sydney
Phone: 02 9543 6804
Address: 159 Stoney Creek Road, Beverly Hills NSW 2209
Website: www.trinitygroup.com.au
Weekend and after-hours appointments available
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Disclaimer: Information provided on this website is intended as a general overview only and does not replace professional advice tailored to your personal circumstances.
