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UberEATS - GST on Service and Delivery Fees

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Enthusiast

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Replies 10

I work with a cafe that has started delivering meals via UberEats, after reading through their contracts I have a few GST related queries. 

 

SERVICE FEE

UberEATS charges the cafe a service fee for each delivery and it is calculated as "the Retail Price of the Meal(s) sold by you via the UberEATS App (including any GST) ( the “Meal Payment”) multiplied by the above Service Fee percentage less any Discount as defined by Section 3(c) Delivery Services. The Service Fee shall be net of any GST."


The UberEATS entity is not an Australian business so I understand the basis of why the service fee they receive is net of any GST but isn't the Service Fee they charge earned in Australia therefore GST should be charged? Is it correct to charge an Australian business a percentage based on GST inclusive income?

I feel the service fee falls into the category "
Things other than goods or property":

A sale of something other than goods or property is connected with Australia if any of the following applies:

- the thing is done in Australia
- the seller makes the sale through a business they carry on in Australia
- the sale is of a right or option to purchase something that would be connected with Australia.
- the purchaser of the sale is an Australian consumer.


Example:
Sales of $110.00, $100.00 income, $10.00 GST
Service fee 20% $22.00, $22.00 expense, $0.00 GST
Net Sales $88.00 


DELIVERY FEE

When a customer orders via UberEATS they pay a delivery fee on top of meal costs, this fee is then paid to the driver. From the UberEATS contract "Delivery Partners, via the Uber Platform, will invoice you for the delivery services they provide to you. You authorizeUberEATS (i) collect a delivery charge from your customers on your behalf (the “Delivery Charge”) and (ii) remit the applicable Delivery Fee earned by a Delivery Partner on your behalf."

Essentially our cafe never actually sees the delivery partners invoices and the delivery charge is not outlined anywhere in the weekly payment summary but UberEATS does pass on the GST received from the customer for the delivery charge. So on top of every net delivery amount is a $0.45 charge. How am I supposed to account for this in my BAS? Do I have to gross up each GST amount for income then offset it with the respective expense?

Example (using above figures):
Net sales $88.00 
GST on Booking Fee $0.45
Payout to cafe $88.45

Total Sales $115.00 ($110.00 sales + $5.00 delivery fee)
GST on Sales $10.45 

Non-Capital Purchases $26.54 ($22.00 service fee + $4.54 delivery fee)
GST on Purchases $0.00

 

 
1 ACCEPTED SOLUTION

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Best answer

ATO Certified

Community Support

Replies 3

Hi @danielle,

 

Thanks for your patience whilst we sort specialist assistance about your query.

 

While we cannot comment on the taxation affairs of another entity, the entity that you pay the service fee to for the facilitation service (finding a delivery driver for you) may not be making a supply connected with the indirect tax zone (Australia). Therefore, their supply would not be subject to GST.

 

This means that you cannot claim a GST credit for the service fee.

 

In your second example, the price of your supply to the customer includes the meal price as well as the delivery fee, which will be passed on to the driver. Therefore, your GST liability is calculated on $115 ($110 sales + $5 delivery fee) = $10.45.

 

The reason that 45c is paid to you by the facilitator may be to ensure you are not our of pocket, as you have to pay GST on the delivery fee that is passed on to the driver. This amount is not a consideration for any supply made by you to the facilitator therefore you do not need to report it on you BAS.

 

We have general information about the sharing economy and GST at https://www.ato.gov.au/general/the-sharing-economy-and-tax/income-tax-and-gst-in-the-sharing-economy...

 

Hope this helps.

 

10 REPLIES 10

Devotee

Replies 6

Hi danielle

 

Thanks for the detailed information.

 

But what I read your question to be is:

I work for UBEReats (Ue).

Ue gives me an invoice for delivering food.

For example on my Ue receipt it shows a $5.00 delivery fee.

 

On my Business Activity Statement for GST do I report an income of $4.54  and GST collected of $0.45 to total $5.00?

 

Labels:

G1: $5.00

G9: $0.45

 

Total amount you owe the ATO $0.45

 

 

 

Please note this is my personal view; I’m an ATO employee who chooses to help out here in my own time.

Enthusiast

Replies 5

No, I am an accountant not a delivery driver.

UberEATS delivery people do not have to be registered for GST as it in not a taxi service, different from Uber drivers.

 

I want to know whether it is correct to gross up my income for the delivery charge and then subsequent delivery driver payment if I do not create/receive invoices for either.

 

My client, the cafe, receives a weekly payment summary from UberEATS similar to the below:

 

Sales inc GST  500.00 UberEATS Fee -100.00 Net Sales 400.00 GST on Delivery Fee 6.75 Miscellaneous 0.00 Total Payment 406.75

 

Given that UberEATS fee is GST Free, to remit the correct GST to the ATO I need to report the total sales amount rather than the net payment received.

The 6.75 I receive for GST on Delivery Fee is completely GST, we (the cafe) do not charge the Delivery Fee. This is something UberEATS does on top of our order and then remits payment to the driver on our behalf (as explained in my initial post).

Community Support

Replies 4

Hi @danielle,

 

Thanks for your question!

 

We're working with a specialist area to answer your question and we are planning on getting back to you as soon as possible.

 

Thanks.

Best answer

ATO Certified

Community Support

Replies 3

Hi @danielle,

 

Thanks for your patience whilst we sort specialist assistance about your query.

 

While we cannot comment on the taxation affairs of another entity, the entity that you pay the service fee to for the facilitation service (finding a delivery driver for you) may not be making a supply connected with the indirect tax zone (Australia). Therefore, their supply would not be subject to GST.

 

This means that you cannot claim a GST credit for the service fee.

 

In your second example, the price of your supply to the customer includes the meal price as well as the delivery fee, which will be passed on to the driver. Therefore, your GST liability is calculated on $115 ($110 sales + $5 delivery fee) = $10.45.

 

The reason that 45c is paid to you by the facilitator may be to ensure you are not our of pocket, as you have to pay GST on the delivery fee that is passed on to the driver. This amount is not a consideration for any supply made by you to the facilitator therefore you do not need to report it on you BAS.

 

We have general information about the sharing economy and GST at https://www.ato.gov.au/general/the-sharing-economy-and-tax/income-tax-and-gst-in-the-sharing-economy...

 

Hope this helps.

 

Newbie

Replies 2

Hi Danielle,

Is that actually a question that you published or is that the way we suppose to enter the figures from the UBER EATS statement?

I have been thinking about on how to enter them. 

From your point of view we have a sale which is GST applicable, we also have been charged fees, no GST applicable. 

Next we have GST money returned to us? as a sale? with GST applicable?

How do you do that entry via Bank Feed? We can't just set up a rule can we?

Your input is much appreciated.

thank you

Heike

Enthusiast

Replies 0

Hi Jodie,

 

Thanks for your response.

 

It is not clear if we are paying GST to the delivery driver as Uber does provide those details. The cafe is also not charging the delivery cost per se, UberEATS charges it to the customer. Uber provides a daily sales total and this is made up of menu items only, any fees UberEATS oncharges are not included nor listed.

My second example was a breakdown asking whether that is how to calculate the GST if we were to take the delivery fee into account even though we never see these figures.

 

The transaction flows as follows:

- Customer places order with cafe, order total of $20.00

- UberEATS then charges a $5.00 delivery (booking) fee to customer

- Total paid by customer, $25.00 inc GST

- Cafe income $20.00 inc GST

- Service fee deducted $2.00

- GST on delivery (booking) fee added $0.45
- Cafe receives $18.45

 

The only information I am provided by Uber is:
Total Sales inc GST $1,100

UberEats Fee -$250.00

Net Sales $850.00

GST on Booking Fee $4.50

Total Payment $854.50

 

I am journalling the payment as:

Dr Bank $854.50
Dr Service Fee $250.00 (GST Free)
Cr Sales $1,000.00

Cr GST $100.00

Cr GST $4.50

 

Uber provides the following information with the payment email:

What is the "GST on Booking Fee"? The booking fee of $5.00 is GST inclusive and is charged on your behalf. You will start receiving the GST component of the booking fee (est. $0.45/order) each week in your payment. To help you with your GST reporting obligations, this is listed as an extra line item in your weekly payment summary.

 

Apologies for the confusion between Delivery Fee and Booking Fee. In the UberEATS agreements there is no mention of a Booking Fee, only Delivery Fee. But then in the payment information there is only mention of the Booking Fee. I am assuming they are the same. 

Enthusiast

Replies 1

Hi By Heike,

 

If you are using Xero, the easiest way to enter the transaction is:

 

From the bank reconcilation, click add details on the transaction then enter the following lines:

 

Total Received $854.50

 

Description Qty Unit Price Account Tax Rate Amount AUD

Sales 1 1,100.00 200 Sales GST on Income1,100.00

Service Fee 1 -250.00 320 Uber Service Fee GST Free Expense -250.00

Booking Fee 1 49.50 320 Uber Service Fee GST on Expenses 49.50

Booking Fee 1 -45.00 320 Uber Service Fee GST Free Expense -45.00

 

Then press save transaction. This way you are recording the correct amount of GST received and for analytical purposes your gross sales figures will be correct before taking direct costs into account.

 

Sorry hope you can read that. This stupid forum is so basic is doesn't allow you to create or paste in a table.

 

Hope it helps : )

 

 

Newbie

Replies 0

Hi Danielle, Yes this helps and more so....

Most people would just tick the box in reconciliation page and put it all towards income.

Also using a foreign company you get no GST benefit on the expense.

 

Thank you for your help with this - much appreciated. Heike

I'm new

Replies 1

Hi,

 

Does this mean that business owner has to declare a GST Free non capital expense of $4.54 and then claim same amount in their tax return as well as Sales has been increased by $5 including GST (or $4.54 Excl GST). Considering including the extra $5 is not revenue for the business, this is to even out the net affect?

 

Regards

Neeraj

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