Here’s everything you need to know about the tax implications of being a Deliveroo rider-partner.
Deliveroo is a food delivery service where you can choose high-quality takeaway options from Australian restaurants. Your food is then delivered by ‘Deliveroo rider-partners’ straight to your home or office. If you’re currently a Deliveroo rider-partner, read our handy Deliveroo tax guide to help ensure you get your tax obligations correct and avoid ATO troubles.
1. Deliveroo ABN requirements
As a Deliveroo rider-partner, you must have an ABN as you are paid as a contractor. This means you’re responsible for paying tax on your earnings as well as arranging your own superannuation contributions.
2. Deliveroo Tax obligations: Rider-partners must declare all income earned
According to the ATO any payments you receive while working as a Deliveroo rider-partner is considered income and must be declared on your tax return.
Important Tip: Don’t spend all of your Deliveroo payments straight away!
If you’re a Deliveroo rider-partner in addition to another job or income earning activity (e.g Foodora, Uber, Uber Eats) we’d recommend saving at least 30% of all payments you receive to avoid being left with a big bill at tax time.
Need help predicting how much you should save? Talk to a tax agent like Etax.com.au. To be on the safe side it’s always smart to save a bit extra, as it’s much nicer to have some money saved than to owe the ATO money!
3. GST: Deliveroo rider-partners DO NOT need to register for GST
If you only deliver food and you earn less than $75,000, you do not have to register for GST (but you must have an ABN). You only need to register for GST as a Deliveroo rider-partner if you earn more than $75,000 per year.
Unlike Uber drivers, Deliveroo rider-partners are currently exempt from the ATO’s compulsory GST tax, whereas all Uber drivers must still register for GST even if they earn under the $75,000 threshold. This is because the tax law works differently for taxi driving/ridesharing than it does for people delivering food.
4. But if you deliver food AND drive passengers, then you DO need to register for GST
Here’s where it gets complicated – when you deliver food AND drive passengers.
What about if you’re a Deliveroo rider-partner AND provide ‘ridesharing’ services?
If you’re a Deliveroo rider-partner and provide ridesharing services (such as Uber, GoCatch), you must register for GST and your GST obligations will apply to ALL of your business activities, not just the rideshare portion.
Deliveroo Tax Example 1:
John is a Deliveroo rider-partner and earned $24,000 worth of Deliveroo payments last financial year. As John does not offer Uber or other ridesharing services he only needs to:
- Have an ABN, and
- Declare his $24,000 worth of Deliveroo payments on his tax return.
- Pay tax on that $24,000 worth of Deliveroo income, plus any other income he earned during the financial year
Deliveroo Tax Example 2:
Justine is a Deliveroo rider-partner and earned $17,000 worth of Deliveroo payments last financial year. She also provided ridesharing services and earned an additional $5,000 in payments. Because Justine offers both Deliveroo and ride sharing she must:
- Register for an ABN,
- Include all Deliveroo and Uber on her individual tax return,
- Register for GST and make GST payments for BOTH Uber and Deliveroo income, and
- Submit a business activity statement (BAS).
The tax benefits of being a Deliveroo rider-partner
There are a range of tax deductions you can claim as a Deliveroo rider-partner. Here’s a list of a few work-related expenses that become tax-deductible when you ride for Deliveroo:
- Bike or Scooter repairs and maintenance
- Bike or Scooter tyres and equipment
- Registration costs
You can also claim additional costs that are directly related to operating as a Deliveroo rider-partner:
- Cleaning costs
- Mobile phone costs (here’s more about claiming work-related phone use)
- Sun protection items (here’s more about sun protection tax deductions)
You will already be provided with high quality safety gear and equipment when you sign up as a Deliveroo rider-partner which is not claimable. However, other direct work-related expenses that you pay for can usually be claimed on your return.
5. Keep a record of your Deliveroo expenses
Just like you would for any other job, you need to keep a record of any work-related Deliveroo expenses to claim them on your tax return.
This ensures you don’t miss any money saving deductions on your return, but is also an ATO requirement if they wish to see evidence to support any claims you make in your return.
What are Deliveroo expenses? They are all those items listed above under “tax benefits of being a Deliveroo rider-partner” – specifically, they only include the portion of those costs that were directly related to your work as a Deliveroo rider-partner. Don’t fake it or get carried away! The ATO is serious about real versus fake claims and you can get into a lot of trouble by making false tax claims.
Set aside 5-10 minutes each week to download statements and file your receipts in a folder. This will make sure you claim every expense you are entitled to at tax time.
Etax Tip: We suggest trying the new Etax 2018 tax deductions feature which allows you to securely attach your tax receipts (legible photos or scanned copies are fine to use) that you receive throughout the year right from your mobile phone!
We guarantee it will save you time and headaches at the end of financial year, and you will pay less tax – it’s easy!