Gig work and ABN contracting — delivery/rideshare tax and spotting sham contracting
Covers tax, GST and super for delivery/rideshare gig work and ABN contractors, and explains how to spot sham contracting using the criteria that distinguish employees from contractors.
What gig work and ABN contracting are — and why the distinction matters
Platform gig work such as delivery and rideshare, and ABN contract work (independent contractor), have a different legal status from a wage-earning employee. Contractors generally do not receive employee protections such as minimum wage, paid leave and employer super contributions; in exchange, they must manage their own tax, super and insurance. So before you start, the starting point for everything is working out accurately which side the substance of your work falls on. The test is the substance of how you actually work, not the label or the wording of the contract.
Employee vs contractor — the multi-factor test
Under Fair Work criteria, employees and contractors are distinguished not by any single factor but by weighing multiple factors together (a multi-factor assessment). The key questions are: who controls when, how and where the work is done (control); whose equipment and vehicle are used (ownership of tools); who bears any loss (business risk); can the work be delegated to someone else (delegation); and is the work integrated into a particular business. If the company sets your schedule, you work with the company's equipment, and you cannot delegate the work to anyone else, the substance is likely that of an employee even if you hold an ABN. Since the 2024 law changes, the test looks at the whole substance of the relationship, not just the contract's wording — so if the assessment is difficult, you can contact the Fair Work Ombudsman for free.
Applying for an ABN and registering for GST — process and obligations
To work as a contractor, you first need an ABN (Australian Business Number). You can apply directly and completely free of charge through the Australian Government's ABR (abr.gov.au), and the sole trader structure is the usual choice for gig workers. Paid "agent" sites that rank high through search ads simply lodge the same free application for you and charge a fee, so there is no need to use them. Once your ABN is issued, you need to work out your GST registration obligations based on the type of work you do.
Rideshare means GST from the first dollar — how it differs from delivery
The ATO applies a special rule to rideshare (ride-sourcing — carrying passengers for a fare) that differs from ordinary businesses. Ordinary businesses only need to register for GST once annual turnover exceeds $75,000, but for ride-sourcing, GST registration is mandatory from the first dollar, regardless of the size of your income. That means you must register even if you only drive a few hours on weekends. By contrast, if you only deliver food or goods, this special rule does not apply and the general $75,000 threshold applies. Once registered for GST, you lodge a BAS each quarter and pay the GST on the fares you receive, but in return you can claim GST credits on work-related expenses.
- Apply for a sole trader ABN yourself for free at the ABR (abr.gov.au) — never pay a fee-charging agent site
- If you do rideshare, register for GST at the same time as your ABN — mandatory before you start, even with zero income
- Link ATO services to myGov so you can manage your income, BAS and PAYG instalments online
Sites like "ABN application $49" at the top of Google search results are not government agencies. The official application is abr.gov.au and nowhere else, and it is free. You can report suspicious sites to Scamwatch.
What you need before starting — visa conditions, TFN and record-keeping
Having an ABN alone does not mean you can start working straight away. If you hold a visa, first confirm that your visa's work conditions apply just as fully to gig work and self-employment. For example, a student visa's work-hour cap also counts work done on an ABN (check Home Affairs for the latest conditions). In addition, having a TFN (Tax File Number) for tax returns and a system for keeping income and expenses separate from day one will make lodging your return far easier later on.
- Check your visa work conditions — gig work and ABN work also count toward work-hour limits (check Home Affairs and VEVO)
- Hold a TFN + get an ABN — you need both: the TFN for personal tax returns, the ABN for business income
- Set up income and expense records — a separate work account, a vehicle logbook, and keep receipts (5 years under ATO rules)
Platforms (delivery and rideshare apps) usually will not activate your account without an ABN, and the ATO receives transaction data reported by the platforms. "It's cash, so I don't have to declare it" is not true — all gig income must be declared.
Types at a glance — where does my work fit?
Even within gig work, tax obligations and legal protections differ depending on the type of work. Check which category you fall into, and note that if you do two or more types at once, the stricter obligation (for example, ride-sourcing GST) takes precedence.
GST registration is mandatory as soon as you start, regardless of income (from the first dollar). You lodge a quarterly BAS, paying GST on fares while claiming GST credits on vehicle-related expenses. If you do both rideshare and delivery, check ATO guidance on whether the rule affects everything you do.
GST follows the general rule — the $75,000 annual turnover threshold. However, income tax obligations start from the first dollar, and you can deduct work expenses such as vehicle, bike and phone costs. Under the 2024 reforms, you may be covered by the FWC's employee-like minimum standards.
Traditional ABN contracting such as construction trades, cleaning and IT freelancing. If the contract is mainly for labour, the other party may have a super obligation to you, so check the ATO's classification guidance. Contract, insurance and workers compensation requirements vary by industry and state.
If the company sets your hours and how you work, you use the company's equipment, and you cannot delegate — yet you're asked to get an ABN — that is a sham contracting red flag. Employers can be penalised for breaching the Fair Work Act, and you can report it or get advice from the Fair Work Ombudsman for free.
5-point tax and finance checklist
ABN income has no withholding, so everything you receive is a pre-tax amount. Make these five habits routine and you won't be caught out at tax time, you won't miss deductions, and you'll be prepared for an audit.
- Immediately set aside a portion of your income in a separate tax account — the right percentage varies with your income and deductions, so confirm it with a registered tax agent; the ATO may also bring you into PAYG instalments (quarterly prepayments)
- Keep a vehicle logbook — the logbook method uses a representative continuous 12-week record to work out your work-use percentage; compare it with the cents per km method and choose whichever works out better for you (check the ATO for current rates)
- Keep evidence of work expenses — retain receipts for the work portion of phone and data bills, equipment such as insulated bags and helmets, and platform fees, for 5 years
- If registered for GST, meet your quarterly BAS deadlines — late lodgment can attract penalties, so turn on myGov notifications and manage your quarterly schedule
- Self-fund super + review your insurance — make your own super contributions (deductions may be available), and because workers compensation coverage varies by state, consider injury and income protection insurance (compare based on your own needs, not any particular product)
5 common mistakes and things to watch out for
These are the mistakes gig work beginners make over and over. Most can be avoided by checking just a few things at the start — and be especially careful with sham contracting, where it's easy to be swayed by "that's just how it's done".
- Paying a fee-charging ABN agent site — the official ABR (abr.gov.au) application is free. Report agent or lookalike sites imitating government websites to Scamwatch.
- Skipping GST registration for rideshare — "I haven't hit $75,000 yet" does not work for ride-sourcing. It is mandatory from the first dollar, and GST for the unregistered period can be charged retrospectively.
- Spending everything without setting tax aside — no withholding does not mean "no tax"; it means "you pay it yourself later". This is the most common mistake that ends in a large bill at your first tax return.
- Accepting "you're on an ABN, so there's no minimum wage or super" — if the substance of the work is that of an employee, that statement itself is sham contracting. An employer demanding an ABN to avoid employee obligations may be breaching the Fair Work Act, so check with the Fair Work Ombudsman.
- Not keeping records — claiming vehicle deductions from estimates without a logbook, or throwing away receipts, can lead to your deductions being denied if the ATO reviews them. The rule is to keep records for 5 years.
Useful official links
- Fair Work Ombudsman(opens in a new window)
The workplace regulator that explains the criteria for distinguishing employees from contractors and what sham contracting is, and provides free advice and a reporting channel.
- Australian Taxation Office (ATO)(opens in a new window)
The official source for tax matters across the board, including the ride-sourcing GST rules, reporting gig economy income, expense deductions and super obligations.
- Australian Business Register (ABR)(opens in a new window)
The Australian Government's official business register, where you can apply for, update and look up an ABN yourself for free. No paid agent outside this site is needed.
- Fair Work Commission (FWC)(opens in a new window)
The body that administers the "employee-like" minimum standards regime for platform workers introduced by the 2024 reforms. Check here for implementation details.
- business.gov.au(opens in a new window)
The Australian Government's one-stop business portal covering independent contractors' contracts, rights and responsibilities, and the basics of running a business.
Frequently Asked Questions
Does it cost money to apply for an ABN?▾
It's free. If you apply directly through the Australian Government's ABR (Australian Business Register, abr.gov.au), it costs nothing at all. Beware of paid agent sites that appear at the top of search results — they charge a fee to lodge the same application on your behalf. If your eligibility is clear, your number is usually issued immediately.
If I drive for a rideshare service like Uber, when do I need to register for GST?▾
As soon as you start rideshare (ride-sourcing) — in other words, GST registration is mandatory before you earn your first dollar. The ATO makes clear that the $75,000 annual turnover threshold that applies to ordinary businesses does not apply to ride-sourcing. Once registered, you must lodge a BAS (Business Activity Statement) every quarter.
Do I need to register for GST if I only do food delivery?▾
If you only do food delivery, the ride-sourcing special rule does not apply and the general $75,000 annual turnover threshold applies. That means if your expected turnover is below that, you are not required to register for GST. However, if you do both delivery and rideshare, you must register immediately under the ride-sourcing rules — so check your particular combination against ATO guidance.
My employer says "go get an ABN and then come work" — is that okay?▾
If the way you actually work is the same as an employee's, but the arrangement is dressed up as an ABN contract to avoid obligations such as minimum wage, super and paid leave, it may be sham contracting in breach of the Fair Work Act. If the company controls your hours and how you work, the equipment belongs to the company, and you cannot delegate the work to someone else, the substance is likely that of an employee. You can get free advice or make a report to the Fair Work Ombudsman (13 13 94).
Can ABN contractors receive super?▾
In principle, contractors must contribute to super themselves. However, if the contract is wholly or principally for labour, the other party (the hirer) may be obliged to pay super even though you are a contractor. Check whether your contract falls into this category using the employee/contractor guidance on the ATO website, and consult a registered tax agent if you are unsure.
If I have an accident while delivering or driving, am I covered by workers compensation?▾
Whether workers compensation covers contractors differs from state to state, and in many cases platform gig workers are not automatically protected. Some platforms offer their own injury insurance, but the coverage can be limited, so check the terms yourself and consider taking out personal injury or income protection insurance. For details, see your state's workers compensation authority and this site's workplace injury guide.
How much should I set aside for tax in advance?▾
Unlike wages, ABN income has no withholding, so you receive amounts with no tax taken out. If you don't set aside a portion of your income in a separate account as you go, you may face a large bill all at once at tax time. The right percentage varies from person to person depending on total income and deductions, so discuss it with a registered tax agent — and be aware that once your income passes a certain level, the ATO may bring you into PAYG instalments, its quarterly prepayment system.