Gig Economy Pay Guide — Tax & Pay for Uber, Delivery & Freelance Workers

Employee or Contractor?

The distinction between employee and independent contractor determines your entire tax structure. Most gig platform workers — Uber drivers, Deliveroo riders, Airtasker providers, freelancers — are classified as independent contractors, not employees. This means:

• No PAYG tax withholding — you receive gross income with no tax deducted. You are responsible for setting aside money for tax.
• No employer super contributions — you must arrange your own superannuation (or go without).
• No paid leave — no annual leave, sick leave, or public holiday pay.
• You can claim business deductions — expenses related to earning your gig income are deductible against that income.
• You need an ABN — an Australian Business Number is required to operate as a sole trader.

The ATO uses a multi-factor test to determine your classification. If you are unsure, see our detailed Contractor vs Employee Guide or use our Contractor vs Employee Calculator to compare the financial impact.

Setting Up as a Gig Worker

Getting an ABN

Apply for an ABN for free at abr.gov.au. Processing is usually immediate for straightforward applications. You need your TFN, personal details, and a description of your business activity. Your ABN is used on invoices, tax returns, and when registering for GST. Without an ABN, payers must withhold 47% from your payments.

GST Registration

GST registration is mandatory for all rideshare (taxi/ride-booking) drivers regardless of income. This is a special rule — Uber, DiDi, Ola, and other rideshare drivers must register for GST from their very first trip. For all other gig workers (delivery riders, freelancers, Airtasker providers), GST registration is required once your annual turnover reaches $75,000.

When registered for GST, you charge GST (10%) on your services and remit it to the ATO via quarterly BAS (Business Activity Statements). You can claim GST credits on business expenses.

Setting Aside for Tax

As a gig worker, no one withholds tax from your income. A common approach is to set aside 25-30% of gross income into a separate bank account for tax. This covers income tax, Medicare levy, and GST (if registered). The exact percentage depends on your total annual income:

How Tax Works for Gig Workers

No Automatic Withholding

Unlike employees, gig platforms do not withhold tax from your payments. You receive the full gross amount (minus platform fees). This means your bank account looks healthier during the year, but you owe a lump sum at tax time if you have not set money aside.

Quarterly BAS (Business Activity Statements)

If you are registered for GST, you must lodge a quarterly BAS reporting your GST collected and GST credits claimed. BAS is due on the 28th of the month following each quarter: 28 October, 28 February, 28 April, and 28 July. Late lodgment attracts penalties.

PAYG Instalments

Once the ATO receives your first tax return showing business income, they may enrol you in PAYG instalments. This requires you to make quarterly pre-payments of estimated income tax, smoothing out your tax bill throughout the year instead of one large payment at tax time. PAYG instalments are reported on your BAS.

Deductions by Gig Type

As a sole trader, you can deduct expenses that are directly related to earning your gig income. The deductions available vary significantly by the type of gig work you do.

Rideshare Drivers (Uber, DiDi, Ola)

Delivery Riders (Deliveroo, DoorDash, Uber Eats)

Freelancers (Web Design, Writing, Consulting)

Superannuation as a Gig Worker

As an independent contractor, no one pays super for you. This is one of the biggest financial differences between employment and gig work. There is no compulsory SG contribution from the platform.

You can (and should) make voluntary super contributions. Personal concessional contributions are tax-deductible — you claim the deduction in your tax return by submitting a "Notice of Intent to Claim" to your super fund. Contributions are taxed at 15% in the fund, compared to your marginal rate (which could be 30-45%). The annual concessional contributions cap is $30,000.

For example, a gig worker earning $80,000 in the 30% bracket who contributes $10,000 to super saves $1,500 in tax (30% marginal rate minus 15% super tax = 15% x $10,000). See our Superannuation Guide for detailed contribution strategies.

Gig Work Plus Employment

Many gig workers also hold a regular job. If you earn employment income and gig income, both are combined for tax purposes. Your total assessable income determines your marginal tax rate. Key considerations:

• Your employer withholds tax based on your employment income only. They do not know about your gig income. This means your withholding may be insufficient, leading to a tax debt at year end.
• Request additional withholding by lodging a PAYG withholding variation with the ATO, or voluntarily increase your withholding amount with your employer.
• Business deductions from gig work can only be offset against your gig income (or total income if you are a sole trader reporting in your individual tax return). You cannot salary sacrifice your gig income.
• GST obligations are based on your gig/business turnover only — your employment income is not included in the $75,000 GST threshold calculation.

Use our Income Tax Calculator with your combined income to estimate total tax liability, then compare against the PAYG already withheld by your employer to see if you need to set extra aside. For a deeper look at structuring, see Employee vs Sole Trader vs Company.

Frequently Asked Questions