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A food delivery driver on route after using QuickBooks guide to tax deductions for Uber Eats and Delivery Drivers
taxes

Tax Deductions for Uber Eats and Food Delivery Drivers






Uber Eats partners with a wide range of restaurants and fast-food chains, from local independent eateries to well-known chains like McDonald's, KFC, and Subway. Customers can browse the menus of restaurants in their area using the Uber Eats app and place an order for delivery or pickup.

Uber Eats operates in more than 600 cities globally and is available in Australia, where it partners with local restaurants in Sydney, Melbourne, Brisbane, Perth, and other major cities to provide its food delivery services. Overall, Uber Eats has become one of the most popular food delivery services in many countries around the world.

Pre-pandemic, Australians were spending over $1,500 each annually for food delivery. That number grew due, in part, to the COVID-19 pandemic. With more choices than ever before, Aussies spend billions on takeaways through Uber Eats, Menulog, DoorDASH, and similar platforms. 

In Australia, the pay rate for Uber Eats delivery drivers ranges from $20 to $40 per hour, with an average earnings of $30 per hour for Uber Eats drivers in Australia.

With that increase in demand, there has been a greater need for food delivery drivers. And like any activity or position that generates income, there are tax implications to consider. If you are a food delivery driver through a platform like Uber Eats, then here's what you need to know about income reporting and tax lodgings.

GST Registration for Food Delivery Drivers

As a driver for UberEats, Doordash or Menulog, your income is taxable, which means a tax return is compulsory and you will need to report your income and expenses. It is effectively like operating a small business, whether it's your side hustle or your main source of income.

On the other hand, while rideshare drivers need to register for GST, food delivery drivers do not need to register, unless they are a contractor and earn over the $75,000 GST threshold. 



Food & Passengers 

Your tax situation can get complicated if you take advantage of the gig economy to drive for a rideshare platform and do food delivery. If you split your time between delivering food for Uber Eats and driving for Uber as well, you need to register for GST. Your GST obligations extend beyond your rideshare income into your food delivery income. 

How To Lodge Tax Return For Uber Eats Drivers

To lodge a tax return as an Uber Eats driver, you need to have an Australian Business Number (ABN). Your ABN allows you to be paid as a contractor. By becoming a contractor, you bear the responsibility for paying the correct tax on your earnings, and you also need to handle your superannuation contributions. If you already have an ABN, you can use it provided it is currently active. 



Delivery Driver Obligations 

It doesn't matter how much you earn from food delivery driving, the Australian Taxation Office (ATO) established that you must declare it in your tax return. If you drive as a side hustle or split your driving between food and ride-sharing, you should take steps to save a portion of your income to pay your employment tax rate once you lodge your return.

Your best bet is to save around 30% of what you earn, that way no matter how your filing unfolds, you will avoid having a large tax bill with no money to pay towards it. 



Grow Your Business with QuickBooks

Food Delivery Driver Tax Deductions Australia 

Just like any other business, food delivery drivers have a range of deductions available to claim. 

  • Service, commissions or licensing fees to the platform you drive for.
  • Tolls.
  • Parking.
  • Registration or renewal of your vehicle licensing.
  • Expenses related to running a vehicle.
  • A portion of your mobile phone bills for expenses related to your food delivery activities.
  • Any personal protective equipment or safety equipment, whether it's a hi-vis vest or emergency pack for your vehicle.
  • Costs associated with car repairs, servicing or cleaning.
  • Insurance.
  • Bank fees if you use a separate account for work.
  • Accountant, tax agent or accounting software such as QuickBooks

There are also several deductions you cannot claim for, including: 

  • The cost associated with obtaining a traditional driver's licence.
  • Speeding or parking fines.
  • Purchase clothing other than safety clothing.
  • Drinks and meals you purchase while delivering. 

The ATO has started to clamp down on unusual claims or claims that seem higher than normal. So, you need as much supporting evidence in case of a challenge. Many companies will provide data to the ATO about the income you have received and expect your tax return to reflect this information. Keep all of your expense receipts if you plan to claim deductions. ATO will also accept bank statements as a record if you don’t have receipts. A logbook is a useful tool for vehicle deductions, and QuickBooks Tax Software makes that simple for food delivery drivers to log in with no fuss.

Keep a logbook for food delivery

To claim fuel and other car expenses for deliveries, a valid logbook is essential. The logbook serves as evidence, required by the ATO, to determine the percentage of car expenses eligible for claiming. Alternatively, you can use the cents per Kilometre method. By utilising this approach, your deduction is capped at a fixed rate for a maximum of 5,000km, resulting in a relatively restricted overall deduction amount.


Looking ahead to 2023-2024, the rate is projected to be 85 cents per km, allowing for a maximum claim of $4,250.

*Please note that the information for 2023-2024 is based on draft legislation and will be confirmed in late June.



Make Your Tax Returns a Breeze

Food delivery drivers can take advantage of tax advice and simplify their tax returns by using reliable tax software. 

Effortlessly track your mileage with our advanced auto mileage tracking feature and prepare your tax lodgement. Simplify tax season by easily capturing and organising your business expense receipts in one place using QuickBooks Tax Software

Experience a hassle-free tax season with our innovative features. Try a free 30-day trial today!



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