# Claiming Uber Service Fee



## Zoma (Jul 15, 2018)

Hello,

I am new in Melbourne, and I do UberEats by Bicycle. I just got my 2017-2018 Tax Summary. I have been doing Ubereats since January.

According to my 2017-2018 tax summary, my Uber Gross rides fare is $7,758.34 and Uber service fee is $2,715.58 and my trip mileage is 1458 kms.

I am not sure if my question is stupid or not, but I'd like to ask can I claim those $2,715.58 in tax return? Will I get it? From what I read, I should claim it but anyone can answer me in simple words as I am new to taxation world ;D


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## Jack Malarkey (Jan 11, 2016)

Zoma said:


> Hello,
> 
> I am new in Melbourne, and I do UberEats by Bicycle. I just got my 2017-2018 Tax Summary. I have been doing Ubereats since January.
> 
> ...


My answer assumes you are not registered for GST because your annual turnover for UberEATS is under $75,000.

Yes, you can claim the whole service fee as an income tax deduction.


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## Zoma (Jul 15, 2018)

As an income tax deduction? Means? I want to know if I will get that amount in my bank account so I can use it to pay my rent and groceries?


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## Jack Malarkey (Jan 11, 2016)

Zoma said:


> As an income tax deduction? Means? I want to know if I will get that amount in my bank account so I can use it to pay my rent and groceries?


No, you won't get that amount in your bank account so you can use it to pay expenses.

An income tax deduction in your annual income tax return reduces any income tax you have to pay.

You pay income tax only if your taxable income for the financial year is above $18,200. If you don't pay income tax, you don't benefit from a tax deduction.

Let's assume your taxable income would otherwise be $25,000. Your marginal tax rate (ie, the tax you pay on every extra dollar of income) is 21% including Medicare levy. Obtaining an income tax deduction of $2716 would save you $570.36 in income tax (21% of $2,716).


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## Hugh G (Sep 22, 2016)

Zoma said:


> As an income tax deduction? Means? I want to know if I will get that amount in my bank account so I can use it to pay my rent and groceries?


Do these people vote?

Some slick political advisors may soon recommend ROBOCALLS ensuring rent and grocery subsidies to get this cohort on their side of the political fence !


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## Zoma (Jul 15, 2018)

Hey, no need to be rude. I am 20, never heard these stuff..

Thanks Jack. I will be moving to UberX in like 6-7 months, I will have to apply for GST registration (i read it). What's the procedure then? Will uber service fee be of any use?

Thanks.


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## Hugh G (Sep 22, 2016)

Zoma said:


> Hey, no need to be rude. I am 20, never heard these stuff..


Didn't mean to be rude .

Your age is irrelevant, you are never too old, or too young, to learn the joys of GST and being a Sole Trader, or an SME (Small to Medium Enterprise). GST and other basic economics is taught in High School.

You are running a business and have MANY tax and legal obligations when Driving for UBER, UBER EATS , or any other income you receive that is not PAYG(Pay as you go, where you are an employee and your employer deducts your tax etc)

The fact you have been doing this for 6 months and blindly continued without FIRST investigating your obligations is like driving on a new road while not knowing the local rules, regulations, speed limits, where the police are and how much you may be fined for not complying.

One of the biggest gripes of the self-employed is the time spent to be in compliance and/or the money spent on software, accountants etc.

You should also realise that if you have other income, not payg, which is UNDER $75k and therefor not required to be registered for GST that when you sign up for UBER X *you will also be liable for GST on the amount under $75k, which was previously exempt.*

EG.

You have a turnover of $66k in the Tax year 2018-2019 in another business and dont pay GST
You start off UBER X anytime in the TAX Year 2018-2019 and have $33k "earnings"
Your Gross GST obligation on those $33k earnings would be $4000 ($44k divided by 11)
You are now also liable for a Gross GST tax obligation of $6000 on the $66k which was previously exempt.
You can then claim your GST credits of 10% of all your expenses of the $66k and the UBER X $33k and the UBER Commission of $11k

The more you are educated in this then the less you have to pay accountants etc.

PS Get a business plan before you go blindly into "Moving to Uber X", have details showing your expected gross, nett, EBITDA (stands for earnings before interest, taxes, depreciation and amortization)

I've seen guys come into Uber and work 50hrs-60hrs per week for a year. When they finally take it all to an accountant who sums it up and depreciates their vehicle using the ATO's scheduled of depreciation THEY MADE LESS THAN $10 per hour ! In actual fact by working 60hrs per week, driving 2,000 km per week THEIR VEHICLE WAS WORTH WAY LESS THAN WHAT THEY COULD DEPRECIATE IT UNDER ATO's schedule.

$8 per hour !

Good luck


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## Fuzzyelvis (Dec 7, 2014)

Am I missing something? Mileage by bicycle is not deductible here in the states. You could deduct actual costs as a business expense, but not mileage. Is it different in Australia?

Deductions just mean you don't pay tax on that amount. So if you made $10,000 for example, and your deduction was $2000 you'd only pay taxes on $8000. You don't get the $2000. But you save whatever the taxes on that $2000 would be. That varies by person, depending on what other money you made and so on.


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## Jack Malarkey (Jan 11, 2016)

Zoma said:


> Thanks Jack. I will be moving to UberX in like 6-7 months, I will have to apply for GST registration (i read it). What's the procedure then? Will uber service fee be of any use?
> 
> Thanks.


Zoma, once you are registered for GST, you claim one-eleventh of the service fee as a GST credit that reduces your GST liability (or can give rise to a refund to the extent that your total GST credits exceed your GST liability on income from all your enterprises) and the balance as an income tax deduction.

So if your total service fees were $2,715.58 (as in your original example), you would claim $247 as a GST credit (one-eleventh of $2715.58) and the balance of $2468 as an income tax deduction. (Consistent with Tax Office practice, I have rounded the claims to the nearest whole dollar.)

I suggest you familiarise yourself with these Tax Office guidelines: https://www.ato.gov.au/general/ride-sourcing-and-tax/.



Fuzzyelvis said:


> Am I missing something? Mileage by bicycle is not deductible here in the states. You could deduct actual costs as a business expense, but not mileage. Is it different in Australia?
> 
> Deductions just mean you don't pay tax on that amount. So if you made $10,000 for example, and your deduction was $2000 you'd only pay taxes on $8000. You don't get the $2000. But you save whatever the taxes on that $2000 would be. That varies by person, depending on what other money you made and so on.


Fuzzyelvis, the position is the same in Australia. You can't claim using the cents per kilometre method for a bicycle but can claim as a deduction the business proportion of actual expenses.


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## fruber (Jul 23, 2017)

i ONLY do UberEats - on my tax summary for 2017/2018, the uber rides service fee is $1,109.56.

When i do tax, I can claim this whole amount, based of my marginal tax rate?


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## Jack Malarkey (Jan 11, 2016)

fruber said:


> i ONLY do UberEats - on my tax summary for 2017/2018, the uber rides service fee is $1,109.56.
> 
> When i do tax, I can claim this whole amount, based of my marginal tax rate?


Yes. Claim the whole amount as an income tax deduction. The benefit you get from claiming the whole amount will depend on your marginal tax rate.

As Fuzzyelvis has pointed out above, claiming an income tax deduction is the equivalent of not paying tax on that amount of income.


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