ABN Registration Guide for Uber and DiDi riders in Australia

Last update: Dec. 27, 2024

Why Do Rideshare Drivers Need an ABN?

Among these, obtaining an Australian Business Number (ABN) stands out as a key prerequisite for operating as an independent contractor. Essentially, having an ABN signifies that you’re not merely performing casual work; you’re running a small business, and as such, you are responsible for reporting your income and paying taxes accordingly. This requirement isn’t simply a formality—by holding an ABN, you’ll gain access to tax benefits, be able to claim relevant expenses as deductions, and more efficiently manage your business finances.

What is an ABN?

An Australian Business Number (ABN) is an 11-digit identifier issued by the Australian Government. It helps the ATO track your business activities and ensures that you meet your tax obligations. For rideshare drivers, the ABN essentially confirms that you are running a small-scale enterprise rather than simply working as an employee. Having an ABN also allows you to issue invoices, claim business-related deductions, and register for GST is required.

Why Do Uber and DiDi Drivers Need an ABN?

When you drive for Uber or DiDi, you are not directly employed by these companies. Instead, you operate as an independent contractor offering transportation services. This arrangement means:

• You are responsible for reporting your own income and expenses to the ATO.
• You must pay tax on your rideshare earnings.
• You need an ABN to legally conduct business as a rideshare driver in Australia.

How to Register for an ABN

Registering for an ABN is a straightforward process and can be done online. Here are the basic steps:

• Gather Your Information: Before you begin, ensure you have your Tax File Number (TFN), personal details, and basic business information on hand.
• Visit the ABN Registrar Website: Go to the Australian Business Registration website to start your ABN application.
• Complete the Online Application: Provide the requested details, including the type of business structure (usually “sole trader” for rideshare drivers), contact information, and a short description of your enterprise.
• Submit and Await Confirmation: In most cases, you will receive your ABN immediately upon completing a successful application. If further checks are needed, it may take longer.

Do Uber and DiDi Drivers Need to Register for GST?

Whether or not you need to register for the Goods and Services Tax (GST) depends on the nature of your business and your earnings:

• Rideshare Drivers Must Register for GST Regardless of Earnings: Unlike some other small businesses that only need to register for GST if they earn $75,000 or more per year, rideshare drivers in Australia are required to register for GST from the moment they start providing services.
• Collecting and Reporting GST: Once registered, you must add GST (typically 10%) to the fare you charge riders. The rideshare platform often calculates and includes this in the passenger's fare, but it's your responsibility to report and remit the GST to the ATO via regular Business Activity Statements (BAS).

How to Register for GST

Registering for GST can be done at the same time as applying for an ABN or afterward if you already have an ABN. Simply:

• During the registration of your ABN, select GST registration.
• Select 'Registrations': Follow the prompts to register for GST.
• Choose the Start Date: Your GST obligations begin from your registration date, so be sure to set it correctly.

Filing Business Activity Statements (BAS)

Once you have registered for GST, you will be required to lodge Business Activity Statements (BAS) on a regular basis. Most rideshare drivers submit BAS quarterly, which involves:

• Reporting Your Income: Declare all your rideshare earnings for the period.
• Claiming GST Credits: You can claim GST on eligible business expenses, such as fuel and vehicle maintenance costs.
• Paying Any GST Owed: If you've collected more GST than you've paid, you'll need to remit the difference to the ATO.

Record-Keeping and Compliance

To remain compliant with ATO guidelines, you must maintain accurate records. This means:

• Keeping Receipts and Invoices: Store all documents for at least five years.
• Recording Income and Expenses: Track daily earnings, fuel costs, insurance premiums, and vehicle-related outlays.
• Ensuring Accurate BAS Reporting: Regularly review your figures to prevent errors and penalties.

Benefits of Proper Registration

By securing an ABN and registering for GST (as required), you:

• Operate legally as a small business in Australia.
• Can claim legitimate business deductions, potentially reducing your taxable income.
• Avoid costly penalties and fines for failing to meet your tax obligations.

Conclusion

For Uber and DiDi drivers in Australia, obtaining an ABN and registering for GST are essential steps in establishing and maintaining a compliant, tax-efficient rideshare business. By following the proper registration procedures, understanding your ongoing obligations, and maintaining thorough records, you ensure a smooth and sustainable operation on the road.