The Fine Print Australia · PUBLISHED 24 JUN 2026 · VERIFIED 24 JUN 2026 · AU EDITION

$0 Threshold: Uber Driver Tax Australia 2026 (GST From Trip 1)

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An Uber driver in Australia who forgets to claim GST credits on fuel, insurance and Uber’s own service fees can easily miss out on over AUD $2,000 a year in cash-flow, purely because they don’t offset the 10% GST they’ve already paid on those business costs.

The number that matters

10% — GST on every Uber fare from the first dollar — ATO/ride‑sourcing treatment, 2024–25

The Australian Taxation Office treats Uber and other ride‑sourcing services as taxi services, which means every Uber driver must register for GST and charge 10% GST (1/11th of the fare) from their very first trip, even if they earn less than AUD $75,000 a year.

How it quietly costs you

Mechanism: mandatory GST from dollar one, but drivers don’t plan for it

• The ATO classifies ride‑sourcing (including Uber) as a taxi service, so the usual AUD $75,000 GST threshold does not apply.
• As a result, Uber drivers must register for GST from their first paid trip and charge GST on every fare, with GST calculated as 1/11th of the fare (10%).
• Uber states that fares charged to riders are GST‑inclusive, so for an AUD $11 fare, AUD $1 is GST that ultimately has to be reported and remitted to the ATO.
• Drivers must lodge quarterly Business Activity Statements (BAS), reporting GST collected on fares minus GST credits on valid business expenses.

Impact: under‑saving and “surprise” BAS bills

• Practical tax guides for rideshare drivers recommend putting aside 30–40% of gross Uber earnings to cover income tax and GST, because many new drivers otherwise face large, unexpected bills at year‑end.
• DriveTax’s calculation shows that quarterly GST payable is roughly gross fares ÷ 11 minus GST credits on Uber’s fees and other business expenses.
• For a driver earning AUD $40,000 in gross Uber fares a year, GST on income is about AUD $3,636 (40,000 ÷ 11) before credits.
• If that driver only claims minimal credits (e.g. on Uber’s service fees) instead of the full range of vehicle and running costs, it is realistic for them to overpay GST by AUD $1,000+ per year, purely because they haven’t claimed all eligible input tax credits.

Old vs better practice

• Old (what many drivers do): treat Uber income like casual wages, don’t register promptly, don’t track GST, and save little or nothing for BAS; they then owe several thousand dollars across GST and income tax at year‑end.
• Better (what ATO and specialist tax guides imply): register for GST from the first trip, track fares and expenses, lodge BAS quarterly, and routinely claim input tax credits so only net GST (after credits) is paid.

The second, compounding trap

Mechanism: poor use of deductions, especially car costs

• Uber drivers are treated as sole traders and can claim a wide range of business deductions—registration, insurance, repairs, tyres, cleaning, parking, phone, and platform‑related subscriptions—where they relate to driving for Uber.
• Car expenses can be claimed using either:
• The cents‑per‑kilometre method, which allows a fixed rate per business km up to 5,000 km per car per year.
• The logbook method, where the driver keeps a 12‑week logbook to establish a business‑use percentage, then applies that percentage to all actual running costs (fuel, insurance, rego, repairs, depreciation/lease, tolls etc.).
• For the 2024–25 income year, tax guides state you can claim 88 cents per kilometre, up to 5,000 business kilometres, giving a maximum deduction of AUD $4,400 per car using the cents‑per‑km method.
• The logbook method has no 5,000 km cap: once a valid logbook exists, you can claim the business‑use percentage of actual annual costs and depreciation (subject to ATO limits).

Impact: thousands in missed deductions each year

• For cars used for rideshare, the depreciation cost limit for the 2024–25 income year is AUD $69,674, meaning depreciation can only be claimed on the first AUD $69,674 of the car’s cost, even if the purchase price is higher.
• Many drivers who choose the cents‑per‑km method but drive more than 5,000 business km (which is common for regular Uber drivers) are capped at AUD $4,400 in car deductions, even if their real annual car costs exceed that amount.
• Example: a driver who does 20,000 business km and spends per year:
• Fuel: AUD $4,000
• Insurance, rego: AUD $2,000
• Repairs/maintenance: AUD $2,000
• Depreciation (within ATO limit): AUD $5,000
• Total car costs: AUD $13,000
• On a 70% business‑use logbook, they could claim AUD $9,100 (13,000 × 70%).
• If they instead rely on cents‑per‑km, they are limited to AUD $4,400, missing AUD $4,700 in deductions.
• At a marginal tax rate of 32.5%, that AUD $4,700 difference in deductions translates into roughly AUD $1,528 more tax paid in that year.

Compounding effect

• Combined with under‑claimed GST credits (Problem 1), incorrect or sub‑optimal deduction methods can easily cost a typical Uber driver AUD $2,500–$3,000 per year in avoidable GST and income tax.
• Over a decade of part‑time or full‑time driving, the cumulative impact is AUD $25,000–$30,000 in missed tax savings, before even considering investment returns if those savings were invested.

What this looks like in practice

Persona

• Name: Sam
• Age: 36
• Job: Part‑time Uber driver, part‑time retail worker
• Income: AUD $28,000 from Uber fares + AUD $22,000 from retail wages = AUD $50,000 total income per year
• Uber status: Sole trader with ABN, driving mostly evenings and weekends
• Years to retirement: about 29 years (assuming retirement at 65)
• Car & use: Mid‑size car worth AUD $35,000, about 18,000 km per year, 14,000 km of which are Uber‑related
• Tax position: Registered for GST but has never kept a proper logbook and rarely claims beyond basic expenses

Discovery 1 — Mandatory GST from dollar one

• Sam realises that because Uber is treated as a taxi service, he must be registered for GST and charge GST on fares from his first trip, even though his Uber income is only AUD $28,000, well below the usual AUD $75,000 threshold.
• GST on AUD $28,000 of fares is roughly AUD $2,545 (28,000 ÷ 11) in a year.
• With proper record‑keeping and credits on fuel, insurance, rego, car washes and Uber’s own service fees, Sam can realistically reduce his net GST bill by several hundred dollars per year, compared with just remitting 1/11th of his fares without claiming credits.

Discovery 2 — His deduction method is costing him over AUD $1,000/year

• Sam has always used cents‑per‑km, assuming it is simpler, claiming 5,000 business km × 88c = AUD $4,400.
• His actual Uber‑related driving is 14,000 km out of 18,000 km, or about 78% business use, and his annual car costs (fuel, insurance, rego, maintenance, depreciation) total about AUD $11,000.
• On a 78% logbook percentage, his car deduction could be AUD $8,580 (11,000 × 78%), which is AUD $4,180 more than the cents‑per‑km cap.
• At his marginal tax rate (including Medicare Levy), that extra deduction would cut his tax by around AUD $1,300–$1,400 per year.

Discovery 3 — Missed ancillary deductions add up

• Like many drivers, Sam has never claimed smaller Uber‑related costs:
• Parking fees under AUD $10 each, where he could claim up to AUD $200 per year without keeping every individual receipt.
• Mobile phone costs for Uber work, Spotify/Apple Music or similar subscriptions used for riders, and mints/water for passengers, all of which are deductible to the extent they relate to his driving.
• Conservatively, these ancillary costs total about AUD $600–$800 per year, giving Sam an extra AUD $200–$260 in tax savings each year when combined with his car deduction changes.

The full cost of doing nothing

Assuming Sam continues driving for Uber at current levels for 10 years, improves his tax approach from year 2 onwards, and his income, car costs and tax brackets remain broadly similar:

• Problem 1 (GST credits):

• Under old behaviour, Sam effectively overpays GST by roughly AUD $400 per year by not fully claiming credits.

• Over 10 years, that is AUD $4,000.

• Problem 2 (deduction method & missed expenses):

• Switching from cents‑per‑km to logbook plus claiming ancillary deductions adds roughly AUD $1,500–$1,700 per year in tax savings (about AUD $1,300–$1,400 from better car deductions and AUD $200–$260 from ancillary deductions).

• Over 10 years, that is about AUD $15,000–$17,000.

Combined lifetime/career impact for Sam over 10 years of driving:

• Total avoidable tax and GST cost: approximately AUD $19,000–$21,000 in today’s dollars.
• Modelling basis:
• Uber fares AUD $28,000/year, GST on fares 1/11th, with credits increasing after Sam starts claiming all eligible expenses.
• Car costs AUD $11,000/year, business use ~78%, cents‑per‑km cap AUD $4,400 at 88c per km up to 5,000 km.
• Tax savings calculated at a marginal rate around 32.5% plus Medicare Levy, consistent with mid‑range Australian income brackets.

What to do about it

Move 1 — Register/confirm GST and BAS setup

1. Action: Confirm you are correctly registered for GST and lodging BAS.
2. Tool/portal: myGov → ATO Online Services (Business section; ABN and GST registration details).
3. Steps:

• Log in to myGov, link or access ATO Online Services.
• Navigate to “Business” then “Registrations” to check your ABN and GST registration status.
• If not registered, complete the online form to register for GST for your ride‑sourcing business, then note the quarterly BAS due dates the ATO displays.

4. Benchmark (“good” looks like):

• GST status: Active from the date of your first Uber trip.
• BAS: lodged on time every quarter, with GST on fares reported as 1/11th and input tax credits claimed on eligible business expenses.

Move 2 — Download Uber tax summaries and calculate GST set‑aside

1. Action: Use Uber’s own data to work out how much GST and tax to set aside from each payout.
2. Tool/portal: Uber Partner Portal (partners.uber.com) → Tax Summary.
3. Steps:

• Log in to the Uber partner portal and navigate to “Tax Summary”, then select the relevant statement (year or quarter).
• Note your gross fares, Uber fees and any GST shown on fees.
• Apply DriveTax’s simple rule: divide gross fares by 11 to estimate GST on income, subtract GST on Uber fees and other expenses, and then multiply your net income (excluding GST) by your marginal tax rate to estimate income tax—then set aside roughly 30–40% of gross Uber earnings to cover both.

4. Benchmark (“good” looks like):

• Consistently setting aside around 30–40% of gross Uber earnings for tax and GST (adjusted once you have a precise percentage for your situation).

Move 3 — Start and maintain a 12‑week logbook for maximum deductions

1. Action: Begin a compliant 12‑week logbook to unlock higher car deductions.
2. Tool/portal: ATO guidance via myGov/ATO Online plus a paper or digital logbook app; no cost.
3. Steps:

• Choose a 12‑week period and record every trip’s date, start/end times, odometer readings and purpose (business vs private), along with the total kilometres travelled in that period.
• At the end of 12 weeks, calculate your business‑use percentage (business km ÷ total km) and keep the logbook record; it is valid for up to 5 years.
• Apply this percentage to all actual car expenses for the year (fuel, rego, insurance, repairs, depreciation up to the AUD $69,674 cost limit, tolls and parking) when preparing your tax return.

4. Benchmark (“good” looks like):

• A logbook‑based business‑use percentage that realistically reflects your Uber driving (often 60–80% for regular drivers).
• Total car deductions significantly above the AUD $4,400 ceiling imposed by using only the cents‑per‑km method (88c × 5,000 km).

A myth worth clearing up

Myth: “I don’t earn AUD $75,000 from Uber, so I don’t need to register for GST.”

Fact: The ATO explicitly treats Uber and other ride‑sourcing platforms as taxi services, and taxi services must register for GST from the first dollar of income, regardless of whether turnover is under or over AUD $75,000. Because of this classification, every Uber driver in Australia must be GST‑registered, charge GST on fares, lodge BAS and remit GST, even if they drive only part‑time.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.