Uber partner and Tax

[kokzn]

Hi

I just started working as an Uber driver/partner using my own car during the holidays while I'm on leave. I received my first statement today.

What is the best way to handle the Tax on this? I have a full time job, so i will be doing Uber driving on parttime/afterhours basis and weekends.
Should I save a percentage of my weekly earnings and put the aside for SARS? What percentage should I allocate?
Will SARS see me as a higher income earner due to my Uber earnings and push up the tax brackets?

 

[iacvlvs]

Should I save a percentage of my weekly earnings and put the aside for SARS?

Yes.

What percentage should I allocate?

That depends on what you earn. Ideally you'd calculate the tax due on your extra earnings, and allocate that. As a fast-and-nasty alternative, 40%. The highest tax bracket (for people earning over R673100 per year) is 40% of the amount above R673100, so the highest possible tax you'd have to pay on your Uber income would be 40%, and that only if you already earn R673100 or more annually from your day job.

Will SARS see me as a higher income earner due to my Uber earnings

Yes. Your employer is deducting income tax based on your salary. If you earn only your salary, then that will be your total tax due. If you earn income apart from your salary, SARS will you you as earning the higher income (i.e. the sum of your salary and the additional income).

and push up the tax brackets?

Maybe.
If you earn less than R174550 annually, SARS will take
18% of your income.
If you earn more than R174550 annually, SARS will take
18% of the first R174550
25% of the amount above R174550
If you earn more than R272700 annually, SARS will take
18% of the first R174550
25% of the next R98150 (272700-174550)
30% of the amount above R272700
If you earn more than R377450 annually, SARS will take
18% of the first R174550
25% of the next R98150 (272700-174550)
30% of the next R104750 (377450-272700)
35% of the amount above R377450
If you earn more than R528000 annually, SARS will take
18% of the first R174550
25% of the next R98150 (272700-174550)
30% of the next R104750 (377450-272700)
35% of the next R150550 (528000-377450)
38% of the amount above R528000
If you earn more than R673100 annually, SARS will take
18% of the first R174550
25% of the next R98150 (272700-174550)
30% of the next R104750 (377450-272700)
35% of the next R150550 (528000-377450)
38% of the next R145100 (673100-528000)
40% of the amount above R673100

Your Uber earnings will cause you to move into a higher tax bracket if and only if your total annual income including Uber earnings is more than one of the amounts indicated above, and your total annual income excluding Uber earnings is less than that amount.

Please note that earning more money will never (and can't possibly) increase your tax by more than your increase in income. Earning more before tax will always mean taking home more after tax. Only "how much more" will vary. The higher tax rate is only applied to the amount over the tax bracket threshold, and the portion below the threshold is taxed at the lower rate.

 

[ToxicBunny]

Hi

I just started working as an Uber driver/partner using my own car during the holidays while I'm on leave. I received my first statement today.

What is the best way to handle the Tax on this? I have a full time job, so i will be doing Uber driving on parttime/afterhours basis and weekends.
Should I save a percentage of my weekly earnings and put the aside for SARS? What percentage should I allocate?
Will SARS see me as a higher income earner due to my Uber earnings and push up the tax brackets?

Random question, don't you need a PrDP to operate as an Uber driver?

Also, what is the income like out of interest?

 

[Alton Turner Blackwood]

Just add the amount to your regular income and download an app (there's an app called SA Tax Calculator in the Play Store). Put this money aside.

Then declare the extra income on your next tax return and pay it.

 

[iacvlvs]

Also worth mentioning:
Keep a trip logbook with odometer readings and private and business mileage each day. Also keep as much detail as you can about every cent you spend in order to earn you Uber income: membership/registration fees, phone calls/contracts/phone, petrol, maintenance, tolls, everything. Then pay a good tax consultant to claim as much as possible as deductions.

 

[Sinbad]

Just add the amount to your regular income and download an app (there's an app called SA Tax Calculator in the Play Store). Put this money aside.

Then declare the extra income on your next tax return and pay it.

And don't forget a logbook, etc - as you should be able to claim back your fuel/maintenance expenses?

 

[kokzn]

@iacvlvs - Thanks for your comprehensive reply, very helpful, really appreciate.

@ToxicBunny - I did Pdp a couple of months ago. As for the income, see picture below. I only started working on Monday 15th of December. I did a total of about 30 (the other trips shown on the pic are cancelled by riders) trips or so.
I didn't keep track of mileage and fuel, but my guestimates gives me just under 1000KM and about R2000 of fuel. I loaded about R120 airtime, but I also use it for personal calls, And calls with riders usual don't last over a minute.
Uber takes 20% of what i make, they also deduct R500 for the Iphone, not sure if this is a weekly fee or onceoff, I will find out.

 

[Sinbad]

Hmm. Maybe I should try this for extra cashes.

 

[Alton Turner Blackwood]

Remember you need to keep track of all your calls as well. You then claim that money back from SARS.

A rule of thumb is to claim every cent from SARS for all expenses you made in order to run your business. Also claim that R500 for the iPhone from SARS!

 

[kokzn]

Remember you need to keep track of all your calls as well. You then claim that money back from SARS.

A rule of thumb is to claim every cent from SARS for all expenses you made in order to run your business. Also claim that R500 for the iPhone from SARS!

Thanks mate. I plan to buy a R200 phone to use exclusively for Uber, or perhaps get the cheapest topup contract. that way I don't have to separate my private and business calls.

 

[Alton Turner Blackwood]

Thanks mate. I plan to buy a R200 phone to use exclusively for Uber, or perhaps get the cheapest topup contract. that way I don't have to separate my private and business calls.

Actually.

If you get a contract it will be easier to manage as everything will be on your monthly bill.

Remember, the phone and calls will for all intents and purposes be free - you pay the service provider and deduct that money from your total tax

I will never recommend a contract phone under normal circuimstances

 

[Pho3nix]

@iacvlvs - Thanks for your comprehensive reply, very helpful, really appreciate.

@ToxicBunny - I did Pdp a couple of months ago. As for the income, see picture below. I only started working on Monday 15th of December. I did a total of about 30 (the other trips shown on the pic are cancelled by riders) trips or so.
I didn't keep track of mileage and fuel, but my guestimates gives me just under 1000KM and about R2000 of fuel. I loaded about R120 airtime, but I also use it for personal calls, And calls with riders usual don't last over a minute.
Uber takes 20% of what i make, they also deduct R500 for the Iphone, not sure if this is a weekly fee or onceoff, I will find out.
View attachment 177227
View attachment 177229

Wait a second.. Your telling me you made R5k in a week :erm:

 

[Sinbad]

I wonder how safe it is for a woman to be a driver in this system?

 

[RanzB]

Wait a second.. Your telling me you made R5k in a week :erm:

Minus R2k for petrol, less whatever Uber takes.

 

[Sinbad]

Minus R2k for petrol, less whatever Uber takes.

That's after the uber take.

 

[Pho3nix]

Minus R2k for petrol, less whatever Uber takes.

That's still an odd R3k on a good week. Drivers I've spoken too have mentioned during the week it's slow but weekends are decent.

So R3k * 4 = R12k.
If you bought a car to do this, wouldn't a portion of the fee's also be tax deductible?

So R12k-R5k(car) = R7k extra a month, remembering that you will have to pay some tax on this come tax season?

Please excuse the maths inefficiencies. Brain is on babalas break

 

[RanzB]

That's still an odd R3k on a good week. Drivers I've spoken too have mentioned during the week it's slow but weekends are decent.

So R3k * 4 = R12k.
If you bought a car to do this, wouldn't a portion of the fee's also be tax deductible?

So R12k-R5k(car) = R7k extra a month, remembering that you will have to pay some tax on this come tax season?

Please excuse the maths inefficiencies. Brain is on babalas break

I never really understood it to be honest. When it started I just sort of assumed that the cars belonged to Uber. When I was told that the cars belong to the drivers I was a bit flabbergasted. You bought a luxury car but have to be a taxi driver? Seems an odd life choice.

 

[Pho3nix]

I never really understood it to be honest. When it started I just sort of assumed that the cars belonged to Uber. When I was told that the cars belong to the drivers I was a bit flabbergasted. You bought a luxury car but have to be a taxi driver? Seems an odd life choice.

A couple of the gentlemen I have spoken to have mentioned that they are on pension and it keeps them busy
The other few are actual professional drivers that do Uber while their clients are at work for extra bucks.
Then there are the peeps that just want some spare cash and enjoy driving.

Might be more types but these are the few I've met.

 

[Sinbad]

I never really understood it to be honest. When it started I just sort of assumed that the cars belonged to Uber. When I was told that the cars belong to the drivers I was a bit flabbergasted. You bought a luxury car but have to be a taxi driver? Seems an odd life choice.

Uber isn't a taxi business. They're an IT shop that facilitates taxi owners getting in contact with fares. Basically each "partner" is their own small business.
I chatted with my uberBLACK driver the other day - he actually owns a fleet of Corollas and employs people to drive them for Uber. He uses his Audi when there's lots of demand, or some of his regular drivers are off sick. The guy's a CA, worked for AngloGold for 10 years and got bored with accounting. Doing his MBA through GIBS...

 

[Pho3nix]

Uber isn't a taxi business. They're an IT shop that facilitates taxi owners getting in contact with fares. Basically each "partner" is their own small business.
I chatted with my uberBLACK driver the other day - he actually owns a fleet of Corollas and employs people to drive them for Uber. He uses his Audi when there's lots of demand, or some of his regular drivers are off sick. The guy's a CA, worked for AngloGold for 10 years and got bored with accounting. Doing his MBA through GIBS...

Sounds like a semi-decent business model. For both Uber and their partners.