Hello Uber drivers! Like it or not, tax season is here. To make things a little easier, I’m launching a new series designed specifically for the Canadian rideshare and food delivery drivers community. This first post dives into the document that causes the most headaches every year: the Uber Tax Summary.
Whether you’re driving in the GTA or across Ontario, the way Uber presents your data can feel like solving a puzzle. But don’t worry, while the layout might seem complex, the logic behind it is actually quite simple once you break it down.
Uber tax summary could be different for various countries, states/ provinces or jurisdictions. Most part of the information is quite similar, but there are important differences as well. Since we are based in GTA (Greater Toronto Area), we are going to explain a tax summary in easy words that GTA Uber drivers get (in general).
How Uber Driver Earnings are Reported
To understand your tax summary, you first have to understand your relationship with Uber. Legally, you are the business owner. Uber is simply the technology platform that “assists” you.
When a passenger pays for a ride, they are technically paying you. Uber collects that money on your behalf, takes its agreed-upon cut (fees and service charges), and then deposits the remainder into your account. This is why your “Gross” numbers on the summary always look much higher than what actually hit your bank account.
You can find your tax summary under the tax documents in your Uber account.
Uber issues a report that carries different numbers and amounts in it. These are used for filing your annual tax returns (as self-employed or corporation).
We will write the original explanation provided by Uber (available at: https://www.uber.com/ca/en/drive/tax-information/) and then elaborate that in simple words.
Uber Driver Tax Summary Breakdown
a. Gross Uber Rides Fare
The gross fare equals the time and distance travelled plus the service fee.
This is the total amount charged to the passenger. It includes the distance, time, and the service fee. Even though you never “touch” the service fee portion, the CRA requires you to report the full gross amount as income and then deduct the fees as a business expense later.
b. Gross Uber Eats Fare
The gross fare equals the pickup fee, drop off fee, and distance travelled, plus the service fee.
Similar to rides, this is the total charged to the customer for the delivery (pickup, drop-off, and distance). If you do both, you’ll need to combine these for your total revenue.
c. Split Fare & Booking Fees
This fee is charged to customers on your behalf when they split their fare using the Uber app.
These are essentially “pass-through” costs. Uber charges the rider a booking fee or a split-fare fee on your behalf, then immediately charges you that same amount as a platform fee.
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Tax Impact: These are reported as part of your gross income, but they are 100% deductible as a business expense.
d. Tolls (The ETR 407 Factor)
Tolls are charged to riders on your behalf. The amounts are paid to you by riders as reimbursement of tolls you paid out of pocket.
When you drive a passenger through the 407, Uber adds the toll to the rider’s fare as a reimbursement.
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Pro Tip: Always compare your monthly 407 ETR bill to the tolls listed on your summary. If you paid more out of pocket than you were reimbursed, you can claim the difference as an expense.
e. Airport fee
Airport fees are charged to riders on your behalf for trips from (and often to) the airport.
Talking about GTA, Uber has an arrangement with the Greater Toronto Airports Authority (GTAA) that allows Uber drivers to pick up (and drop off) passengers at Pearson airport (YYZ) (since June 12, 2018). On behalf of the drivers, Uber charges the passengers an airport fee, included in the fare, and which is then charged back from driver by Uber.
f. Booking fee
The booking fee is charged to riders on your behalf and is paid to you by the rider. An equal amount is then charged to you by Uber as a fee.
When a rider requests a ride (in the app), Uber will find a ride and book the order – once accepted by the driver. There is a fixed amount charged by Uber for every request a driver accepts. So, again this amount is charged from passenger for the driver (added to fare) and then taken back by Uber (subtracted from fare). Note, this fee is different from Uber (service) fee.
g. Tips
Tips are paid to you by riders.
Tips are 100% yours, but they are taxable income. Uber collects them and passes them to you without taking a commission. These must be reported on your T2125 form.
h. Total
All (or some of) the amounts discussed above constitute a driver’s earnings. This total amount is just the sum of all accumulated amounts mentioned above. Please note, this is not your total earnings. I have seen a lot of drivers getting confused by this Total amount. I will discuss how to calculate your Uber earnings in another post.
i. HST on Uber rides
- On each trip, GST/HST is charged to riders on your behalf. If you drive with Uber in Ontario or Alberta, this GST/HST is deposited in your bank account each week.
- You’ll need to keep track of these amounts because you’re required to remit part of it to the CRA.
- Depending on how you’ve chosen to file, you’ll need to remit monthly, quarterly, or annually.
You as Uber drivers are charging HST to passengers for the service. Again, Uber collects it, adds it to the earnings and pays it to the driver. Therefore, it is mandatory for Uber drivers to register for HST as they must charge HST and remit to CRA. The explanation provided by Uber is quite self-explanatory. I will discuss Uber HST in detail in another post.
j. Referrals/ Incentives
Uber provides incentives to drivers to do certain things, like, completing an X number of trips in a certain time frame (Quest), encouraging other people to drive Uber as well. This amount is sum of all those incentives given to drivers by Uber. It is not a part of their fare related income.
k. Uber rides service fee
The service fee is the percentage-based fee for accessing the Uber platform.
This is the percentage Uber charges you for using their platform. This is usually your largest tax deduction. Ensure you are deducting every cent of this service fee to lower your taxable income.
l. Uber Eats service fee
As the Uber rider service fee, this is the basic fees charged by Uber for using its platform.
m. On Trip Mileage
The number of Kilometres driven during your trips
This is the kilometres a driver drove the passengers after starting a trip up till completing (from pickup point to destination). So, this is the mileage you accumulated for driving passengers from point A to B and then charging for the same distance travelled. Note, this number does not reflect all your mileage for Uber or business.
As you can see the information provided on tax summary document is very important. It gets further confusing on how to calculate Uber earning for the year. I will write a post on that very soon. One more thing, we have discussed only Uber’s tax summary. Quarterly tax summary reports by Lyft are somewhat similar but also provide different information at the same time.
Always a good idea to consult your accountant for tax related details. He (or she) might save you some money and trouble in return for few bucks.
Disclaimer: This is a general explanation and should be used only for informative and understanding purpose. This article cannot be used or referenced for legal or tax purposes.
