The gig economy has changed the way Australians earn money. From Uber driving and car sharing to other ride sourcing platforms, more people than ever are turning their cars into income-generating assets.
However, with flexibility comes responsibility. This means you can be certain the Australian Taxation Office (ATO) is now paying very close attention.
Whether you’re a part-time rideshare driver or run it as a full-time small business, it’s essential to understand your ATO rideshare tax obligations to stay compliant and avoid unnecessary penalties.
At Pherrus Financial Services, we help Uber drivers, rideshare operators, and other self-employed professionals correctly manage their tax and GST obligations, ensuring you claim every deduction you’re entitled to and nothing more.
Let’s break down what the ATO rideshare rules mean for you.
Consistent communication, clear compliance, and reliable accounting support.
Why the ATO Is Focusing on Rideshare Drivers
The ATO has become increasingly proactive in monitoring ride sharing activities through data-sharing partnerships with major platforms like Uber, CarNextDoor, Ola, and Bolt.
Every fare you earn through your Uber account or other car sharing app counts as assessable income, and therefore must be declared in your income tax return.
D
rivers who fail to register for GST, lodge business activity statements (BAS), or properly report their taxable income risk audits, fines, and even account suspension.
The ATO’s goal isn’t to punish, it’s to ensure every ride sourcing driver pays their fair share of tax, just like any other business in Australia.
Your Tax Obligations as a Rideshare Driver
Registering for GST and Getting an ABN
Unlike most small businesses that only need to register for GST when they earn over $75,000 per year, rideshare and taxi service drivers must register for GST from the first dollar earned.
That means from your very first trip, you need both:
- An Australian Business Number (ABN)
- A GST registration with the Australian Taxation Office
Once registered, you are required to:
- Charge GST (1/11th of every fare)
- Pay GST when submitting your BAS (monthly or quarterly)
- Keep accurate records of your business income and expenses
If you’re not sure how to register for GST or which rules apply, Pherrus can guide you through the process and ensure your registration is correctly managed.
Lodging Business Activity Statements (BAS)
Every rideshare driver must lodge Business Activity Statements to report and pay GST. BAS lodgements also allow you to claim GST credits on business purchases (like car maintenance, fuel, and accessories).
Pherrus can help you:
- Reconcile your Uber fees and fares
- Claim eligible GST credits
- Report accurate income and deductions
- Avoid missing deadlines or penalties
Reporting Your Rideshare Income
All income earned from Uber, Didi, or other ridesourcing platforms is treated as business income. You must include it in your annual income tax return.
If you also earn a salary or wages elsewhere, your rideshare profits are added to that income to calculate your total taxable income.
Since you’re self-employed, tax is not withheld automatically from your fares, you must set aside funds to pay your income tax when lodging your tax return.
Claiming Tax Deductions and GST Credits
As a self-employed rideshare driver, you can claim tax deductions and GST credits for expenses directly connected to your ride sharing business.
Here are some of the most common deductions and credits you may be eligible for:
- Car Running Costs – fuel, servicing, tyres, car washes, registration, and insurance
- Depreciation or Instant Asset Write-Off – for purchasing or upgrading your vehicle (up to the $20,000 threshold for the 2023–2025 financial years)
- Application Fees – Uber or other rideshare platform setup fees
- Medical and Police Checks – required for driver registration
- Mobile Phone and Data – if used for rideshare business purposes
- Tax Agent Fees – for professional preparation of your BAS or tax return
Choosing Your Car Expense Method
There are two main ways to claim car deductions:
- Logbook Method: Claim actual running costs based on the percentage of business use determined by your ATO-approved logbook.
- Cents per Kilometre Method: Claim up to 5,000 km per year at 88 cents per kilometre (2023/24 rate).
Keeping detailed records is crucial. Pherrus helps drivers set up digital logbooks and track deductible business activities throughout the year.
Buying or Selling Your Car for Rideshare
Your car is a business asset. The car cost limit set by the ATO affects how much depreciation or GST credit you can claim when you purchase it.
If you’re GST registered, you can claim GST credits on the vehicle purchase, but only for business use. When you later sell your car or stop using it for ridesharing, the sale amount becomes taxable income, which must be declared in your income tax return.
Before buying a vehicle, Pherrus can help you determine whether it’s more tax-effective to lease, finance, or purchase outright, tailored to your specific tax circumstances.
ATO Compliance and Penalties for Non-Compliance
Failing to comply with ATO rideshare tax requirements can have serious consequences.
The ATO actively monitors ride sourcing platforms and can cross-check your income reported by Uber or other operators against your tax return, ABN, and GST registration.
If you fail to declare your full assessable income, pay GST, or lodge BAS on time, you may face:
- Penalties and interest charges
- Audits or investigations
- Suspension of your Uber account or rideshare platform access
Non-compliance can also damage your credit rating or affect future employment or finance applications.
At Pherrus, we work proactively with clients to ensure every ride sharing driver remains compliant, avoids penalties, and pays only what is legally required.
ATO Rideshare Monitoring: How It Works
The ATO uses advanced software to match data from rideshare platforms, banking institutions, and state regulatory bodies. This technology tracks your fares, business activity statements, and income tax return lodgements.
This means hiding income or incorrect claims is risky and usually detected quickly.
If you’ve missed registering, under-reported income, or claimed excessive deductions, speak to Pherrus immediately. Voluntary disclosure often reduces penalties and helps restore compliance without severe fines.
Professional Tax Advice for Rideshare Drivers
Every rideshare driver’s tax situation is unique. Factors like part-time driving, mixed personal and business use, or vehicle finance can all affect your deductions, taxable income, and GST credits.
A qualified tax professional from Pherrus can help you:
- Set up your ABN and register for GST
- Prepare income tax returns tailored for Uber and rideshare operators
- Claim legitimate tax deductions while staying fully compliant
- Plan tax-efficient purchases using instant asset write-offs
- Avoid costly ATO audits and penalties
Stay on the Right Side of the ATO: Partner with Pherrus
At Pherrus Financial Services, we work with hundreds of Australian Uber drivers, rideshare operators, and self-employed professionals every year.
Our tax consultants help you reduce taxable income, stay compliant, and maximise your refund.
We take the confusion out of GST, business activity statements, and income tax so you can focus on what matters: growing your business and earning more.
If you drive for Uber or use any car sharing platform, don’t leave your taxes to chance.
Contact Pherrus today for expert, personalised tax advice and let us ensure your ridesharing business stays profitable, compliant, and stress-free.
FAQs
Do I Need to Register for GST if I Drive for Uber or Rideshare in Australia?
Yes. Under ATO rideshare regulations, all ride sourcing drivers, including Uber drivers, must register for GST from the first dollar earned even if your annual income is below $75,000. Once GST is registered, you must charge GST on all fares, lodge business activity statements, and pay GST to the ATO.
Drivers must lodge a Business Activity Statement (BAS) either monthly or quarterly to report GST collected. You must collect and pay the GST and income tax on all your rides and all other business income.
GST is calculated as 1/11th of the fare charged on a trip.
What Tax Deductions Can I Claim as a Rideshare Driver?
Rideshare drivers can claim tax deductions for expenses that are directly related to earning business income, such as fuel, car servicing, insurance, application fees, mobile phone use, car cleaning, medical and police checks, and tax agent fees.
Drivers can claim deductions for business-related expenses such as fuel, insurance, repairs, and platform fees.
Rideshare drivers must keep a logbook to claim running expenses and can only claim the business use percentage of these expenses.
However, rideshare drivers are explicitly ineligible to claim fuel tax credits for light vehicles on public roads.
You can also benefit from the instant asset write-off for vehicles and claim GST credits on eligible purchases. Always keep a logbook to verify business usage and deduction percentages.
If a driver’s vehicle is used for both business and personal purposes, expenses must be apportioned accordingly.
The ATO does not provide the same Fringe Benefits Tax (FBT) exemptions to rideshare travel as it does for traditional taxis, potentially increasing employer tax liabilities.
As a rideshare driver, you are considered self-employed and can access tax concessions available to small businesses.
What Happens if I Don’t Declare My Rideshare Income to the ATO?
Failing to declare ride sharing income or register for GST can lead to serious penalties.
The Australian Taxation Office (ATO) uses advanced data matching to track your earnings through platforms like Uber and CarNextDoor.
Non-compliance can result in fines, backdated tax bills, and even suspension of your Uber account.
Working with a registered tax agent such as Pherrus ensures your income tax return and BAS lodgements are accurate and compliant.
What Are the Tax Implications of Buying a Car for Rideshare Purposes?
As an Uber driver, your car is your most critical business asset. If you purchase your car from a dealer, the purchase price will include GST.
You must have actively started the Uber application process to prove that you are ‘running a business’ to be eligible for GST registration.
The ATO’s Car Cost Limit sets the maximum amount that you can claim on the purchase of any car.
The Instant Asset Write-Off threshold is $20,000 for the 2023-2024 and 2024-2025 financial years.
This is the same threshold for the 2025-2026 financial year. You must keep a valid ATO-compliant logbook to claim deductions for your car expenses.
If you are registered for GST, you can claim back the GST on your Uber vehicle on your next Business Activity Statement (BAS).
