Airtax answers your questions
Uber takes 27.5% of my fare but my agreement is that I pay a service fee of 25% - can you explain how this works?
Uber fees are subject to GST, but don't forget that your fares are also subject to GST. Whilst you pay GST on business expenses, you also charge GST on your income. The GST you owe at the end of a period is always the net of the GST you’ve paid and GST you’ve collected. Uber take a service fee of 25% from partners for each fare. As Uber is a GST registered entity, GST of 10% is charged on that service fee. This is the GST paid which makes the total amount Uber takes to equal 27.5% of each fare. In reality you only pay 25% by the time you have completed your BAS and GST collected has been reduced by the GST paid.
I'm paying GST on Uber's 25%. Riders should be paying this GST - why am I paying it?
In essence the rider does pay this GST. As a driver partner, you charge GST on the full fare. That GST you charge is due to the ATO, however you are able to reduce the amount you need to pay by the GST Uber charges on the service fee. Rideshare fares, as with the majority of products you buy in day to day life include GST. It’s the reality of doing business in Australia that you collect GST from customers when you make a sale. The example below helps to explain how the GST is collected. As an Uber driver you need to be aware of this, and if you can you need to put money aside to prepare for your BAS.
|GST due to the ATO||$0.75|
Airtax has information and tips to help you manage your business finances so you claim GST on all the business expenses you’re entitled to have the confidence you’re not missing anything.
Can you shed some light on why partners need an ABN, and how the Airtax app can help them with their tax requirements?
As an Uber partner, you are deemed to be running a business and are therefore most likely considered a sole trader. In order to operate a business in Australia, you are required to have an Australian Business Number (or ABN).
As a result of the court ruling, from August 2015 your sole trader business is required to be registered for GST as Uber driving is considered to be taxi travel.
Airtax provides simple tax for sole traders. We will register you for an ABN and GST for free, and when you connect your Uber driver partner account with Airtax, your first BAS is free (normal price $49). Airtax takes the following data from Uber and prefill it in your Airtax BAS for the correct period:
- Tolls (expense)
- Uber fees (expense)
Airtax also provides a service called Business Assist. For $99 we will lodge your BAS and discuss your lodgement to guide you through what you can and can’t claim. We’ll give you the peace of mind that you’re doing your tax correctly, and help you find deductions you may have missed.
Did you know?
- If you’re a new Uber driver, you can register your GST for free with Airtax
- Airtax connects with your Uber driver account to import your Uber income, tolls and member fees.
- With Airtax your first BAS is free!
Learn more about tax as an Uber driver
Speak to a PwC accountant with Airtax's Business Assist service
Peace of mind for just $99 when you speak to a PwC accountant to get help with your BAS.