Rideshare Driver Tax Deductions Australia: The Complete ATO Guide

Are you treated as a sole trader or employee?

For tax purposes in Australia, rideshare drivers are not employees of the platform. The platform takes a commission, but you provide the service as an independent contractor — which means you are running your own business as a sole trader.

This has two immediate consequences:

1. No tax is withheld from your earnings. You are responsible for setting aside income tax and paying it, either through PAYG instalments or by making your own payments throughout the year.
2. You can claim business deductions against your rideshare income, reducing the amount of tax you owe.

You will have an ABN (or need to obtain one), and you will report your rideshare income and expenses in the business schedule of your individual tax return.

The same sole trader treatment applies if you fill quiet periods with food or parcel runs, though the claimable extras differ — delivery driver tax deductions in Australia covers costs such as insulated bags, bike running costs, and the GST position for delivery work, which is not the same as it is for rideshare.

Car expenses you can claim as a rideshare driver

Your car is your primary business asset. The expenses you incur in running it for rideshare work are deductible to the extent they relate to business use. Claimable car costs include:

• Fuel — the proportion used for rideshare driving
• Registration — the business-use portion
• Insurance — comprehensive and CTP, proportionate to business use
• Servicing and repairs — oil changes, tyres, brake work, and any other maintenance
• Loan interest — if you purchased the car on finance, the interest component on the business-use proportion is deductible
• Depreciation — the wear and tear on the vehicle attributable to business driving
• Car wash and cleaning — keeping the vehicle clean for passengers

The key concept is the business-use percentage: the proportion of total kilometres you drive that are for rideshare (business) versus personal travel. Every claim scales by this percentage.

For rideshare drivers, one trip-leg question comes up regularly: the kilometres you drive waiting for a fare (circling, or repositioning to a pick-up zone) are generally business kilometres. The kilometres you drive from home to the point where you go online and from your final trip to home are more nuanced — they may be private or business depending on your circumstances.

See work-related car expenses for a full breakdown of how the ATO analyses car expenses for self-employed workers.

The logbook method vs cents per kilometre for rideshare

You have two ATO-approved methods to calculate your car expense deduction:

Cents per kilometre (91¢/km for 2026-27; 88¢/km for 2025-26)

• Claim 91 cents for every business kilometre you drive in 2026-27 (88 cents for 2025-26), capped at 5,000 km per car — a maximum of $4,550 or $4,400
• Capped at 5,000 kilometres per year
• No need for fuel receipts, but you must be able to explain and document your kilometre count
• Not suitable if you drive more than 5,000 km for rideshare per year — and most active drivers do

Logbook method

• Keep a logbook for a minimum 12-week period recording every trip (business and private)
• Calculate your business-use percentage from the logbook
• Apply that percentage to actual running costs (fuel, rego, insurance, servicing, interest, depreciation)
• Claim the full business-use share of actual costs — no arbitrary cap
• Far higher deductions for drivers who use their car heavily for rideshare

Most rideshare drivers who drive more than a few hours a week will get a substantially better result from the logbook method. If you put 30,000 km on the car in a year and 70% is rideshare, the logbook method captures 70% of all actual costs — potentially several thousand dollars more than the capped cents-per-kilometre method.

See ATO logbook requirements for exactly what a valid logbook must contain and how to conduct a logbook period.

An annotated shift log

Your journey records are the core of every rideshare claim. This is one Friday evening shift, as it should appear in your log:

Three things to take from this:

• The platform only reports the paid legs. Uber and DiDi summaries show fares 1 and 2, not the 3 km to the second pick-up or the 4 km of repositioning. Those are yours to record.
• Reconcile weekly. Compare your log’s business km with the platform’s trip distances. The difference should be your unpaid business legs, not a gap you cannot explain.
• Mark app-off driving as private. Breaks, errands and the drive home after going offline are the legs the ATO looks at first.

GST registration and rideshare (mandatory for drivers)

This is the rule that catches many new rideshare drivers off guard: you must register for GST from your very first fare, regardless of how much you earn. The standard $75,000 turnover threshold does not apply to rideshare and taxi services.

What this means in practice:

• Apply for GST registration before you take your first passenger
• Add 1/11th of each fare to your GST liability (the platform may handle this reporting)
• Lodge BAS returns — usually quarterly — reporting your GST collected and your input tax credits (GST you paid on business expenses)
• Claim input tax credits on the business-use portion of your car running costs

The GST obligation also means you need an ABN. You cannot register for GST without one.

On the positive side, GST registration allows you to claim back the GST embedded in your business car costs. If you spend $1,100 on a service (including $100 GST), and your rideshare use is 70%, you can claim $70 as a GST input tax credit on your BAS. Over a year, this adds up.

See GST on car expenses for business for a full explanation of input tax credits and the logbook-method GST calculation.

Other deductions for rideshare drivers

Beyond car expenses, rideshare drivers can claim other costs that are directly related to earning income:

Phone costs — a significant portion if you rely on your phone for navigation and the platform app. If the phone is used for both personal and business purposes, you can only claim the business-use share. Keep a usage diary for one representative month to establish the business percentage.

Phone mount and accessories — chargers, phone holders, and other accessories used for the rideshare business.

Water and confectionery for passengers — if you provide these as part of your service, they are a deductible business expense. Keep receipts.

Dashboard camera — deductible as a business asset used to protect you during rideshare trips.

Accounting and tax agent fees — the cost of preparing your rideshare tax return is deductible.

Platform fees and commissions — these are generally already deducted from your income as reported by the platform, so you usually do not need to claim them separately. Check your platform’s reporting to confirm how the income figure is presented.

Bank fees — fees on a bank account used exclusively for rideshare business.

Keeping records and lodging your tax return

The ATO’s substantiation requirements mean that you need to hold evidence for every claim you make. For rideshare drivers, this includes:

Trip records: Every trip you complete via the platform is automatically logged by the platform and available in your earnings history. Download or export these regularly — they show the dates, distances, and earnings for your rideshare trips. These records support both your income declaration and your kilometre count.

Logbook: If you use the logbook method, you need a 12-week logbook covering all personal and business trips, with odometer readings. Once completed, it remains valid for 5 years unless your usage pattern changes significantly. Using Tripbook makes logbook creation straightforward — the app records every trip automatically with GPS verification, so you have a contemporaneous, date-stamped record.

Receipts for running costs: Under the logbook method, keep receipts for fuel, servicing, insurance, rego, and any other car costs. Tax invoices showing GST are needed for input tax credit claims.

BAS records: Your quarterly BAS lodgements and ATO confirmations should be kept for five years.

Income records: Your platform earnings reports, including any 1099-style summary documents the platform provides.

Tax return lodgement: Rideshare income is declared in the business income section of your individual tax return (or in a partnership or company return if your business is structured that way). Report total rideshare income, then deduct all allowable business expenses. The net profit is added to any other income you have, and you pay tax on the total at your marginal rate.

If rideshare is your only or main source of income and you are earning above the tax-free threshold ($18,200), you will owe income tax. Many drivers set aside 25–30% of gross earnings as a rough guide, then adjust based on their actual deductions.

Plenty of drivers pick up rideshare alongside another job that also puts them on the road, and the logbook mechanics above carry across unchanged even though the deductible costs do not. Support workers driving between participants’ homes should read NDIS support worker car expenses; employees covering a territory will find the allowance and substantiation rules in sales rep car expenses and tax deductions; and agents running inspections and open homes are covered in real estate agent car deductions.

Rideshare driver tax deductions Australia can substantially reduce the tax you owe — but only if you track your kilometres and keep your records in order from day one. The GST obligation in particular requires action before your first trip.

Download Tripbook to automatically log every rideshare kilometre, build your logbook, and have ATO-ready records when tax time arrives.