How Gig Income Is Taxed
The ATO treats everything you receive for rideshare or delivery work as assessable income, whether you are an employee, a contractor or in business, and even for a one-off payment. As a contractor you are paid in full: no PAYG tax is withheld, no super is added, and you get no paid leave. The tax shows up when you lodge your return, which is why the ATO says you might end up with a tax bill.
The tax is worked out on your profit: income less the expenses you can claim for the work. The resident rates for 2026-27 apply to your total taxable income, including any wages from another job:
| Taxable income | Tax on that slice |
|---|---|
| $0 to $18,200 | Nil |
| $18,200 to $45,000 | 15% |
| $45,000 to $135,000 | 30% |
| $135,000 to $190,000 | 37% |
| Over $190,000 | 45% |
2026-27 resident rates, from the ATO. The 2% Medicare levy is on top, with a low income offset (LITO) of up to $700 that can cancel tax at lower incomes. See tax brackets and LITO.
ABN and GST: Rideshare vs Delivery
| Rideshare (passengers) | Delivery (food, groceries) | |
|---|---|---|
| ABN | Required from the first trip | Usually needed to work as a contractor |
| GST registration | Required from the first trip, whatever you earn | Required once GST turnover reaches $75,000; optional below it |
| GST on payments | GST applies to every dollar you earn | Only if registered |
| BAS | Monthly or quarterly once registered | Only if registered |
| Tax invoice | For fares over $82.50 if a passenger asks | As the platform or customer requires |
| Income tax | On profit, in your tax return | On profit, in your tax return |
ATO, ride-sourcing and registering for GST, read 5 October 2026. GST turnover is your gross business income (not profit) less GST.
The rideshare rule is the unusual one. The ATO requires registration for taxi and limousine travel, including ride-sourcing, regardless of turnover, so a driver who clears a few thousand dollars a year still needs an ABN, GST registration and a BAS. Delivery isn’t in that category, so the ordinary threshold applies. If you also have other business income, it counts toward the turnover. Once you pass the threshold you register within 21 days. Penalties and interest can apply if you don’t register when required.
How GST Works Out for a Registered Driver
Fares include GST, which is one-eleventh of the amount you receive. You hold it for the ATO, then deduct the GST in your business purchases (a credit), such as the GST in fuel, a service or part of your phone plan. Only the business-use part of a mixed-use cost counts. The GST you collected, less the credits, is paid with your BAS. For income tax, your income is the amount excluding GST and your expenses are the amount excluding the GST you reclaim, so the GST isn’t double counted.
Expenses You Can Claim
Claim costs that relate to earning the income, apportioned for private use, and keep records (the ATO’s free myDeductions tool in the ATO app is one way). For rideshare the ATO is specific: claim only deductions related to transporting passengers for a fare and apportion expenses to the time you are providing the service. Typical categories are fuel or charging, registration and insurance share, servicing and tyres, car cleaning, a phone and data share, platform fees if you report gross payments, and a tax agent’s fee.
For the car there are two methods. Cents per kilometre is 91c a km for 2026-27, capped at 5,000 business km a year, so the most you can claim that way is $4,550, without keeping receipts for the car running costs (you must still be able to show how you worked out the kilometres). The logbook method applies your business-use percentage, from a 12-week logbook, to the actual car costs, and has no kilometre cap. A driver covering many kilometres usually compares the two. See cents per km for the details.
Two Worked Examples (Made-Up Figures)
These are invented to show how the pieces fit together. They are not typical earnings and not a target. The calculator above will do the same sums on yours.
| Example A: rideshare, GST-registered | Example B: delivery, not registered, also has a job | |
|---|---|---|
| Payments for the year | $60,000 | $20,000 |
| Expenses (A includes GST) | $18,000 | $6,000 |
| GST collected less credits | $3,818 | n/a |
| Profit counted for income tax | $38,182 | $14,000 |
| Other taxable income | None | $50,000 |
| Income tax on the profit | $2,331 | $4,410 |
| Medicare levy on the profit | $764 | $280 |
| Set aside for the ATO | $6,913 | $4,690 |
| Left after expenses and tax | $35,087 | $9,310 |
2026-27 resident rates and Medicare levy; private hospital cover assumed; no HELP debt. In Example B the delivery profit sits on top of a wage, so it is taxed at that wage’s marginal rate, which is why the share set aside is higher than for a sole earner.
In Example A the share of payments set aside works out to 12%, and in Example B to 23%. Those two percentages are the point: the share isn’t fixed, so a blanket “put 25% aside” rule can leave you short or over-saving. Use your own figures.
Paying the Tax Without a Surprise
- Keep a separate account for tax money and move your set-aside amount in each week.
- Prepay the ATO. The ATO says you can make a prepayment regularly or once off, at any time and as often as you like, towards a potential bill. It stays on your account until used unless you ask for a refund.
- BAS dates. If you are GST-registered, lodge your activity statement monthly or quarterly and pay the GST then.
- Check any HELP debt. Compulsory repayments are worked out on your total income at tax time; see the HECS-HELP calculator.
- Super is yours to arrange. No platform pays it. Personal contributions you claim as a deduction are taxed at 15% in the fund; see the super calculator and concessional contributions cap.
If You Deliver Food or Groceries
Since 17 August 2026 delivery workers on apps also have a legal minimum hourly rate for engaged time, before costs. See the delivery driver pay rate guide for the rates and a calculator that checks a payout against the floor. The tax sums above apply to what you actually receive.
Related Calculators and Guides
- Delivery Driver Pay Rate: the $31.30 an hour minimum
- Gig Economy Pay Guide: ABN, BAS and deductions in more detail
- Contractor Pay Calculator: convert a contractor rate to a salary
- Contractor vs Employee Calculator
- Cents per Km and Employee vs Sole Trader vs Company
- Take-Home Pay Calculator
Frequently Asked Questions
Rideshare and delivery tax questions and answers
Do Uber drivers have to register for GST?
Yes. The ATO says ride-sourcing drivers must be registered for an ABN and for GST from the day they start, regardless of how much they earn. The only exception is an employee. Once registered you report and pay GST, lodge a business activity statement monthly or quarterly, and can claim GST credits on business purchases.
Do food delivery riders have to register for GST?
Only when GST turnover reaches $75,000. Delivery is not taxi or limousine travel, so the rule that applies to rideshare from the first trip does not apply. GST turnover is your gross business income less GST, not your profit. If you pass the threshold you register within 21 days.
How much tax do rideshare and delivery drivers pay?
Income tax is on your profit, which is your income less the expenses you can claim for the work, at the same resident rates as everyone else: 0% to $18,200, 15% to $45,000, 30% to $135,000, then 37% and 45%, plus the 2% Medicare levy. The low income tax offset can reduce tax at lower profits. The calculator on this page does the sums on your own figures.
Is tax withheld from Uber or delivery payments?
Not normally. The ATO notes that income from the sharing economy may not have tax withheld, so you can end up with a tax bill when you lodge your return. It suggests prepayments towards the bill, which you can make at any time and as often as you like. The ATO also requests data from sharing-economy platforms, so assume your payments are visible to it.
What expenses can I claim as a rideshare or delivery driver?
Costs related to doing the work, apportioned for private use. For rideshare the ATO says to claim only deductions related to transporting passengers for a fare and to apportion expenses to the time you are providing the service. Keep records. The two car methods are cents per kilometre (capped at 5,000 km) and the logbook method, which uses your business-use percentage of actual costs.
Do I charge GST on top of the fare?
If you are registered, GST applies to every dollar you earn from ride-sourcing and is included in the fare. You must issue a tax invoice for fares over $82.50 if a passenger asks for one. Your income for income tax purposes is the amount less the GST, and your GST credits reduce what you pay.
How much should I set aside for tax?
There is no single percentage because it depends on your profit, other income, GST status and any HELP debt. Put in your own annual payments and expenses in the calculator on this page to see a figure, or keep a separate account and make prepayments to the ATO as you go. This page does not state what drivers earn or what share to set aside.
Do I get super as a rideshare or delivery driver?
Not from the platform. A sole trader does not receive compulsory super guarantee on their own income, so contributions are voluntary. Personal contributions you claim as a deduction are taxed at 15% in the fund and count toward the concessional contributions cap.
Am I an employee or a contractor?
The ATO says it does not matter whether you are an employee, independent contractor or carrying on a business: income from services through a digital platform is assessable. The label affects whether tax is withheld, whether you get leave and super, and whether you can claim the expenses above. Use the contractor vs employee calculator and check your contract, and see the Fair Work Ombudsman if you are unsure.
How we worked this out▼
If registered for GST, GST collected = payments ÷ 11 and credits = expenses ÷ 11 (when expenses include GST). Income for tax = payments − GST collected; deductions = expenses − credits. Profit = income − deductions. Tax on the profit is the 2026-27 resident income tax (after the low income offset) and Medicare levy on your other income plus profit, minus the same on your other income alone, plus any HELP repayment. Set aside = that tax + GST payable. Left after tax = payments − expenses − GST payable − tax.
General information, not advice. The calculator ignores other deductions and offsets, the Medicare levy surcharge thresholds beyond the cover question, PAYG instalments, losses carried forward and the personal services income rules. A tax agent can confirm your position. The worked examples use made-up figures and say nothing about what drivers earn.
Sources & References
- 1Ride-sourcing (tax obligations)— Australian Taxation Office
- 2Registering for GST— Australian Taxation Office
- 3Sharing economy: providing services— Australian Taxation Office
- 4Sharing economy: preparing for a potential tax bill— Australian Taxation Office
- 5Sharing economy and tax— Australian Taxation Office
- 6Cents per kilometre method— Australian Taxation Office
Last verified: 5 October 2026. Our content is based on the latest information from official Australian government sources.
Anita Bell
AuthorFounder & Senior Bookkeeper
Accountancy degree (2015); certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One
Anita Bell earned her accountancy degree in 2015 and has worked as a senior bookkeeper with Prime Bookkeeping for over 5 years. This built her skills in Australian and New Zealand tax legislation and industry regulations. She is certified in Xero, QuickBooks Online, MYOB, Saasu, Zoho and Reckon One, and works with payroll and rostering software including Gusto, Deputy, Tsheets and KeyPay. She has strong experience in hospitality, building and construction, financial services, real estate, ecommerce, and medical and health services.
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