Introduction
Your Uber or DiDi payout is not your profit. Fuel, vehicle running costs, platform fees and other business expenses can reduce your taxable income if they meet ATO deductibility rules.
This guide covers how ATO rules treat rideshare income, the two vehicle deduction methods, overlooked expenses, GST and recordkeeping. Rates, caps and due dates change, so check each figure against the ATO for the relevant financial year. The figures below are for 2026-27.
Key Takeaways
- Report all driving income and claim only genuine business expenses you can prove.
- Choose cents per kilometre or logbook for each car, and never stack both.
- Apportion mixed costs like phone, fuel and insurance between business and private use.
- GST and BAS run separately from income tax, so register before your first trip.
How Tax Works for Rideshare Drivers in Australia
Understand your tax status and reportable income
The ATO treats ride-sourcing as a business, and you operate as a sole trader. You need an ABN. Uber describes drivers as independent transportation providers, not employees.
Track every dollar the platform pays you:
- Fares and tips
- Bonuses and incentives
- Referral payments
- Casual or occasional earnings
Don't report only your bank deposit. Gross fares come first, then the platform fee comes off.
The ATO's own example: a $55 fare includes $5 GST (one-eleventh). An $11 platform fee leaves a $44 payout. If that fee includes GST, you may be able to claim a $1 credit. This is an illustration, not a typical fee.
Reconcile your annual platform summary against your bank statements. Uber's tax summary definitions explain terms like gross fares and fees. Its kilometre estimates cover pickup to drop-off only, so they are not a logbook.
GST, income tax and deductions are separate
Ride-sourcing drivers must register for GST before the first trip, regardless of turnover. You then lodge a BAS monthly or quarterly and claim eligible GST credits there.
A deduction reduces taxable income. It isn't a dollar-for-dollar refund. Assessable income minus allowable deductions gives taxable income, and only the business share of a mixed expense counts.
Don't import US rules
IRS forms, Schedule C, 1099s, US mileage rates and US self-employment tax don't apply to an Australian return. The "no tax on tips" slogans come from US policy. The ATO treats ride-sourcing tips as income.
Vehicle Deductions: Compare the Methods Before Claiming
Vehicle costs are usually your biggest deduction. Neither method suits everyone, so compare them.
| Method | 2026-27 basis | Limits and records |
|---|---|---|
| Cents per km | 91c per business km | Max 5,000 km per car per year; a reasonable kilometre calculation |
| Logbook | Business-use % of actual costs | 12 continuous weeks, generally valid 5 years |
Different cars can use different methods, and you can switch between income years. Pick based on your business kilometres, running costs, private use and appetite for paperwork.
Cents-per-kilometre method
The rate covers fuel, maintenance, registration, insurance and depreciation. Don't add those costs on top. You don't need receipts for them, but you need a supportable kilometre figure, such as a diary or myDeductions records.
Eligible tolls and parking can be claimed separately, as long as the passenger didn't pay them. If you drive more than 5,000 business kilometres, the cap makes the logbook method worth testing.
Logbook method
Keep a logbook for a representative 12 continuous weeks. Record:
- Start and end dates and odometer readings for the period
- Journey dates, purpose and kilometres
- Opening and closing odometer readings for the year
Business-use percentage is business km ÷ total km × 100. Apply that percentage to actual costs:
- Fuel and oil, servicing and repairs
- Registration and insurance
- Loan interest, lease payments and depreciation Renew the logbook if your circumstances change.
Car purchase, finance and depreciation
Can you write off the whole car? No. The purchase price and loan principal are not running-expense deductions. Depreciation, interest and lease costs are claimed only for the business share, under the logbook method.
A simple example: a car's annual deductible costs total $10,000 and your logbook shows 60% business use. The claim is $6,000, not $10,000. At 80%, it's $8,000. Get the business-use percentage right before you claim.
For 2026-27 the car depreciation limit is $69,883 and the maximum GST credit on a car purchase is $6,353, both before business-use apportionment. Neither is an automatic refund.
Trip classification matters for both methods. Per the ATO's example:
- App-on driving to your regular job with no accepted trip is private
- Business travel starts when you accept a job
- Driving solely to find rideshare work is business travel
- A detour to meet friends is private
Other Tax Deductions Rideshare Drivers May Claim
Platform fees, tolls and parking
Commissions and service fees are generally deductible, but reconcile them to your platform statement so you don't count them twice. Claim tolls and parking incurred on business trips. Fines and penalties are never deductible.
Phone, internet and technology
Claim the business share of your phone and data plan. Without itemised bills, the ATO allows a representative 4-week diary of business use. A separate business phone gives cleaner evidence than apportioning a personal bill.
Business-use software subscriptions, such as a tracking app, may also qualify, with private use apportioned.
Passenger and cleaning supplies
The ATO lists these passenger and vehicle-cleaning items as deductible:
- Bottled water and mints
- Tissues and wipes
- Sanitiser and antibacterial spray
- Newspapers
General snacks and roadside assistance are not listed in the ATO's ride-sourcing guidance, so check with your tax agent before claiming them.
Professional and administrative costs
You can claim:
- Registered tax agent and accountant fees
- Bookkeeping costs
- Preparing and lodging returns and BAS
- Transaction fees for paying business tax debts
Ordinary private driver licence costs cannot be claimed.
Commonly overlooked and restricted claims
Often missed:
- Business share of insurance and registration
- Platform fees and commissions
- Tolls and parking
- Cleaning supplies
- Accountant and bookkeeping fees
Never claim:
- Private commuting or personal use
- Fines
- Unsupported cash expenses
- Your entire phone bill
- The same car cost under both methods
Recordkeeping That Supports Legitimate Deductions
Build a real-time mileage and expense system
Record odometer readings, trip dates and business purpose close to the time of travel. Platform history misses journeys such as driving to find work. The ATO recommends myDeductions for tracking ride-sourcing income, receipts, private-use percentages and logbook trips. Compare your records with platform statements and bank transactions.
Keep receipts and allocation evidence
Photograph every receipt: fuel, servicing, insurance, registration, phone, tolls, parking and supplies. Each receipt should show date, supplier, amount and business purpose. Keep the underlying invoice, not just an accounting entry.
For GST credits, purchases over $82.50 (GST-inclusive) generally need a tax invoice. That threshold is about GST documentation, not an exemption from keeping deduction records.
Keep records generally for 5 years, and back them up.
Reconcile through the year
Monthly or quarterly, work through this:
- Match platform income and fees to bank deposits.
- Check mileage and receipts are up to date.
- Reconcile GST for your BAS.
- Set aside money for tax.
- Review whether your vehicle method still fits.
A separate account or card helps as evidence, but it doesn't make private spending deductible.
Filing, GST and Getting Professional Help
Prepare your return
Sole traders report income and expenses on the Business and professional items schedule of the individual tax return, through myTax or a registered agent. Lodge even if your earnings were modest.
Gather:
- Platform annual summaries
- Logbook or kilometre records
- Vehicle, insurance and registration documents
- Receipts and GST records
- Last year's return
Manage GST, BAS and tax payments
Business income excludes GST, and deductions exclude GST you claim as a credit. Published quarterly BAS due dates for 2026-27:
| Quarter | Original due date |
|---|---|
| Jul-Sep 2026 | 28 October 2026 |
| Oct-Dec 2026 | 28 February 2027 |
| Jan-Mar 2027 | 28 April 2027 |
| Apr-Jun 2027 | 28 July 2027 |
Weekend and holiday adjustments and concessions may apply. Monthly BAS is generally due on the 21st of the following month. You may also owe PAYG instalments, so follow your ATO notice.
Know when to get help
Get advice if you have:
- Multiple platforms or income sources
- A financed or leased car
- Heavy private use
- GST confusion
- Missing records or prior-year corrections
- Doubts about a deduction
VJM Global brings 30+ years of tax, audit and advisory experience and supports Australian businesses with accounting and compliance services. Check whether its services fit your situation. It can't promise a particular outcome or tax saving.
Frequently Asked Questions
Do I have to pay tax on my Uber income?
Yes. Rideshare income, including tips and bonuses, must be reported. Eligible business deductions reduce taxable income, and GST obligations apply separately.
How does the new $6,000 tax deduction work for rideshare drivers?
No such deduction appears in ATO guidance. That figure comes from US policy and does not apply on an Australian return. Your claims depend on eligible expenses and the car method you use.
What tax deductions can rideshare drivers claim?
Vehicle costs, the business share of phone and technology, platform fees, tolls, parking, passenger supplies and professional fees. Each claim must meet ATO rules and be backed by records.
What are commonly overlooked tax deductions for rideshare drivers?
Platform commissions, business phone use, tolls, parking, cleaning supplies, passenger water and mints, and accounting or tracking software.
Can I write off my car as a rideshare driver?
Not entirely. Claims depend on business-use percentage, your method, and depreciation or finance rules. Loan principal and purchase price aren't running-cost deductions.
Can I deduct Uber rides on my taxes?
Private rides aren't deductible. Passenger fares for qualifying work trips, such as workplace to client, may be deductible with records. Travel from home to your regular work location is private.
