Tax breaks and deductions for delivery riders

This article was written by our friends at Airtax*.

If you have a tax question after reading this article, you can book in a FREE 10 minute call with an Airtax specialist. Just click here, select ’10 minute tax chat’, and schedule a time. 

You can also lodge your tax return with Airtax. All tax returns are reviewed by a tax specialist to help you claim the right amounts and avoid potential penalties from the ATO. 

Check out Airtax’s tax services today! To save $20, use the discount code delivered20 at the checkout. 

Did you know, delivery riders can save on tax and potentially receive a cash tax refund from the Australian Tax Office (ATO)?  

There are 3 tax deductions that delivery riders commonly claim in their tax return, as well as a tax break that millions of people in Australia receive each year…. 

  1. A tax break for delivery riders  

This tax break is called the low and middle income tax offset and helps delivery riders save between $255 and $1,080 in tax. 

The best part? Finding out if you’ are eligible for the low and middle income tax offset is really easy. 

To be eligible, you need to have earned more than $18,200 but less than $126,000 in the last financial year (i.e. 1 July 2019 and 30 June 2020). 

For delivery riders who paid PAYG tax installments during the financial year, this tax break can provide a cash tax refund when lodging an Australian tax return. 

You can easily estimate whether you will receive a tax refund using Airtax’s tax refund estimator.

  1. Claim mobile phone bills back on tax

As a rider, your phone is your best friend – you use it to accept deliveries, find restaurants and deliver to customers. 

If you only use your mobile phone for food delivery, then 100% of your mobile phone bill can be claimed back on tax. 

However, mobile phones are generally also used for personal reasons. Where a mobile phone is used for both work and personal reasons, only the portion used for work can be claimed back on tax. 

To figure out what portion of your mobile phone bill is for work, you can use an estimate. When doing so, you’ll need to keep a record of how you determined your estimate. 

These records don’t need to be complicated – it could be as simple as estimating the hours you were delivery riding compared to the hours you were not. 

  1. Claiming the cost of purchasing a mobile phone back on tax

In addition to the deductions for mobile phone bills, you may also be able to claim the cost of purchasing your mobile phone. 

Similarly to claiming a deduction for mobile phone bills, only the portion of your mobile phone that is used for work can be claimed back on tax. 

  1. Claiming the cost of purchasing a bicycle back on tax 

If you complete deliveries with a bicycle, you could also claim the purchase of your bike back on your tax. 

The bicycle will need to be purchased in the same year as the year of the tax return being lodged.

For example, if the tax return is for last financial year, then the bicycle will need to have been purchased between 1 July 2019 and 30 June 2020. 

Again, only the portion of the bicycle that is used for work can be claimed as a deduction for tax. Similarly to claiming a deduction for mobile phones, it is okay to use an estimate. 

 

Remember, if you’d like professional support in completing your tax return, check out Airtax’s tax services today and to save $20 use the discount code delivered20 at checkout.