Top Tax Tips for Uber Drivers

Your Uber job may be a great way to earn some income but don't forget about your tax bill. Let's go over what taxes Uber drivers have to pay, as well as some additional tax tips.

What kind of taxes do Uber drivers have to pay?

The CRA considers Uber drivers as self-employed, so you'll follow similar rules. As of July 1, 2017, federal and/or provincial taxes are added to fares when clients book a ride. Drivers are required to register for a GST/HST account within 30 days of their first trip. Quebec drivers must have a QST number before they begin providing services.

New rules for Uber drivers

It used to be that only drivers who made $30,000 per year or more had to charge and remit GST/HST. However, the CRA implemented new rules effective July 1, 2017. Possibly due to the rise of Uber and Lyft, the GST/HST definition of "taxi business" was amended in the Excise Tax Act.  In March 2016, Susie Heath, Uber Canada Senior Communications Associate, told the CBC: "As with any company that uses independent contractors, it is the responsibility of the contractor to remit their taxes as required by the CRA." Under the new rules, self-employed commercial ride-sharing drivers such as Uber's are required to:

 
• Register for a GST/HST account, regardless of income
 
• Charge and collect GST/HST for all fares
 
• Report GST/HST on the income tax return
 
• Remit the GST/HST.

How to register for GST/HST and QST

The CRA encourages self-employed commercial ride-sharing drivers to register for the GST/HST using Business Registration Online.  Quebec drivers need a QST number to drive for Uber. To get one, applicants have several options:

 
• Use the Register a New Business service
 
• For businesses that already exist, use Register a Business with Revenu Qu√©bec
 
• Contact client services directly
 
• Fill out an Application for a Registration form.

Uber collects and remits QST and GST for Quebec drivers. In the rest of Canada, Uber collects HST/GST automatically and sends it to drivers on a weekly basis so that it can be remitted.

Where to find your tax information

You can find most of the tax information you need in your Uber profile. Just click on the "Tax Summary" section to find your total earnings and other tax information. Uber said it will soon provide the amount of HST you have collected in this section.

Other tax tips for Uber drivers

Here are some useful tax tips Uber drivers should remember:

 
• Be diligent about recording mileage, including a precise odometer reading on New Year's Day
 
• Maintain documentation and be sure to keep expenses for business and personal use separate
 
• Update logbooks and organize receipts on a regular basis to avoid panic at tax time
 
• Use CRA My Account to track refunds, make adjustments such as change of address, set up online payments or for other services
 
• If your income or life situation changes do a tax "dry run" in the fall
 
• Look into any potential tax savings such as RRSPs, and find out whether leasing the car you use for work may be better than buying
 
• Any software purchased to help with taxes is itself tax-deductible.

Other things to remember at tax time

All Canadian taxpayers who earn more than $3,500 per year are also required to make contributions to the Canada Pension Plan (CPP). CPP contribution rates are based on net business income (after expenses). Quebec residents pay into the Quebec Pension Plan (QPP), with the same basic exemption of $3,500.