The NSW passenger service levy

The Passenger Service Levy was introduced by the NSW Government and commenced on 1 February 2018. This levy must be paid by all taxi and booking service providers, including Uber. Whilst Uber has elected for this levy to be passed onto its passengers, it is important that you understand how it will impact your GST and income tax reporting in your BAS and income tax return.

What is the Passenger Service Levy?

The Passenger Service Levy is:

• a $1.20 levy on every trip, excluding trips that have been cancelled; and
• aimed at assisting the taxi industry with the new regulatory framework.

Who pays for the levy?

The levy is paid for by the rider. The NSW government collects the payment from Uber.

Total amount collected = 1000 trips x ($1.20 levy + $0.10 GST) = $1200 levy + $120 GST

Does GST apply?

Yes, GST applies as the levy is paid for by the rider. This means the total additional fee of $1.10 per completed trip will be charged to passengers. This total amount is charged on top of their normal fare.

How does this impact my BAS return and income tax return?

The levy will be made up of the $1.20 levy plus $0.11 GST, so $1.11 in total.

You will need to pay the government all the GST proceeds you have received from your passengers fares (including the levy) and can claim a GST credit for the GST paid by you on the levy, this will be $0.11 per completed trip in respect of the levy.  

You will need to pay Uber all the levy proceeds you have received from riders. This will be $1.20 per completed trip. This will be taken off earnings in your Uber payment statement.

Your gross fares will include the levy and this will be reported as revenue in your income tax return. You will also report the payment you made to Uber as a business expense in your income tax return.

Below is an example of how the $1.10 will be taxed.

Will this affect my taxable income?

No, the levy will not affect your overall taxable income.

Who does the levy apply to?

This levy is payable by all taxi service providers and booking service providers using vehicles with 12 seats or less, including the driver, to provide a passenger service transaction. The levy will only apply if the journey commences in New South Wales.

A passenger service transaction will likely apply to:

• taxis
• hire cars
• rideshare
• Uber

The levy does not apply to remote parts of NSW. You may refer to the where does the levy apply across NSW? section provided by the NSW Government to find which areas are considered ‘remote’. The levy is not payable if the journey starts or finishes in these areas.