1. Apply for an ABN
As you are not working for salary & wage, you are essentially a contractor operating your own business. You must get an ABN (Australian Business Number) and you are then responsible for ensuring tax is paid on your earnings.
We have made the process for applying for an ABN very simple, you can register for an ABN here:
2. Unlike a Ride-share Driver, you do not need to register for GST
There is some confusion around whether Deliveroo Rider-Partners need to register for GST. The answer is No, Deliveroo Rider-Partners to not need to register for GST unless they earn $75,000 worth of Income.
The ATO made it compulsory for Rideshare drivers to register for GST regardless of their income, however this does not apply to Deliveroo Rider-Partner as they do need meet the criteria set out in the ATO’s ruling.
3. If you are a Ride-Share driver and also a Deliveroo Rider-Partner then you must register for GST
As it is a requirement for all Ride-Share drivers to register for GST, all of your business related activities (Deliveroo etc) must comply with GST obligations.
For example if you earn $10,000 from Rise-Share Driving and $5000 as Deliveroo Rider-Partner, you must declare all of this Income on the relevant BAS' and Pay GST on the combined $15,000 of Income.
4. As you are a Contractor, you are responsible for paying your Income Tax
Any income received as a Deliveroo Rider-Partner must be declared as income on your Tax Return. If you earn more than $18,200 from any job you will start to pay tax on any dollar earned over this amount.
You can find the ATO income tax rates here
Income tax is paid annually. The amount of income tax you pay is calculated by completing an Income Tax Return (ITR). Income tax is roughly calculated by adding up all the income you earned from all sources, and subtracting all tax deductible expenses. The result will be your taxable income, and this determines how much tax you pay.
As a rough guide:
- If your taxable income for the year totals less than $18,200, you won't pay any income tax.
- If your taxable income for the year totals between $20,000 and $40,000, you should save around 10% - 15% of your rideshare income for income tax.
- If your taxable income for the year totals between $40,000 and $80,000, you should save around 20% of your rideshare income for income tax.
- If your taxable income for the year will be over $80,000, you should save around 25% - 30% of your rideshare income for income tax.
Want to know more about Income Tax? Read our full Income Tax help article
Therefore, It is very important that you save a portion of your earnings to pay tax at the end of the year!
Note: The above are rough guides only. How much tax you pay depends on your personal situation and the other income you earn. To correctly work out yor income tax, you should lodge your income tax return with a tax agent such as Nixer.
6. Lodge your tax return once per year
Your tax return is your declaration to the tax office on how much income you have earned from all sources in each financial year.
How much income tax you pay will depend on how much income you earned from both your food delivery income and any other sources of income.
Preparing an income tax return can be tricky. Thankfully the Nixer tax return is tailored especially for Food Delivery riders, and you can ask us questions along the way.