The ultimate truth regarding GST and Uber Eats

With inflation constantly rising, individuals are having to come up with new ways to generate an income. Uber Eats is a great way to easily earn money with the flexibility of working whatever times best suit you: but what are your GST obligations?. With COVID-19 forcing a lot of people to start working from home as well as the public being more cautious when it comes to dining out, Uber Eats has grown dramatically in popularity. Uber Eats offers customers a safe and convenient way of dining at affordable prices. The onboarding process to become an Uber Eats driver is quite simple as well.

Whilst making money with Uber Eats is easy, it’s not a traditional job and therefore the rules around GST are slightly different. The Australian Taxation Office (ATO), has recently determined that Uber and other similar businesses must now pay GST. Previously, other contractors and businesses were only required to pay GST when they earned over $75 000 or more a year.

The ATO justified their decision by saying that “ride-sourcing” services fall into the same category as taxi services for taxation purposes. However, delivery services do not fall into this category and are not subject to the same taxation rules.

Do I need my own Australian Business Number (ABN)?

If you are a driver for a ride sharing service such as Uber or Uber Eats, you are required to retain an Australian Business Number (ABN). It is a requirement and is part of the Uber application to attain one. It is easy and simple to apply online and you can even receive it on the same day of applying. 

As a ride share driver, you are considered a sole trader and therefore means that you are:

  • Providing commercial services;
  • Interning to profit from these services; and
  • Offering your services regularly.

What is GST?

In Australia, the Goods and Services Tax (GST) is a tax of 10% on most goods and services. There are some goods and services that are exempt from GST but are limited to:

  • Basic food;
  • Education courses;
  • Media, health and care services;
  • Childcare services;
  • Goods produced overseas;
  • Medicines; and
  • Religious services.

How do I pay my GST?

The ATO keeps records on who is required to pay GST and who is responsible for the goods and services GST is charged on, through GST registrations. Those who are suppliers of goods and services in Australia are required to register for GST if they meet the turnover threshold. This means that if a business has an annual turnover of more than $75 000 a year, they are required to register for GST.

However, when it comes to ride sharing services, individuals are required to register for GST regardless of whether they meet the $75 000 threshold. For a clear definition of ride sharing, you can visit the ATO website. If you are making your vehicle available for the public to hire on apps such as Uber or DiDi and charge to transport passengers, then you are a ride sharing service provider and therefore must register for GST. 

Do I have to pay GST if I do Uber eats? 

Essentially if you are solely participating in Uber Eats, then you are not required to pay GST until you earn $75 000 or more. However, if you drive for Uber and do Uber Eats then yes, you will be required to register and pay GST for both your rides with Uber and food deliveries. 

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Legal advice

If you are still unsure about whether you are required to register and pay GST, our sister company, Legal Kitz, can assist in determining your requirements. Our Legal Kitz business law specialists can assist with ensuring that your concerns are addressed by providing tailored advice. You can book a free 30-minute consultation with our experienced and highly qualified team via our website now.

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