What Can You Deduct as an Uber Driver in Canada

If you're driving for a rideshare service like Uber, Lyft, or Uride, or delivering food through apps such as UberEats, DoorDash, or SkipTheDishes, you’re likely wondering what tax deductions you can claim to reduce your taxable income. The good news is that as an independent contractor, you can claim several expenses related to your work. Understanding these deductions is essential for maximizing your earnings and staying compliant with the Canada Revenue Agency (CRA).

Here’s a breakdown of common expenses you can deduct as an Uber driver in Canada, along with expert tips to ensure you’re prepared for tax season.

1. Vehicle Expenses

Since your vehicle is the core of your business, you can claim a portion of the expenses related to operating it. However, you’ll need to keep a detailed logbook to track your business-related driving versus personal use.

Here are some vehicle-related expenses you can deduct:

• Fuel costs: Every tank of gas you use for ridesharing or deliveries is partially deductible.
• Maintenance and repairs: Oil changes, tire replacements, and other repairs are deductible based on your business-use percentage.
• Vehicle insurance: If you’ve purchased rideshare-specific insurance, those premiums can be partially deducted.
• Lease payments or vehicle loan interest: If you lease or finance your vehicle, a portion of these payments is deductible.
• Depreciation: If you own your vehicle, you can claim depreciation under the Capital Cost Allowance (CCA), which spreads the cost over several years.

2. Service Fees & Commissions

Apps like Uber, Uber Eats and DoorDash often take a percentage of your earnings as service fees or commissions. These fees are considered a business expense and are fully deductible. Be sure to track this information, as it’s typically included in your earnings statements provided by the platform.

3. Smartphone & Data Plan

Your smartphone is your lifeline as a rideshare or delivery driver in Canada. Expenses related to your phone, such as:

• Monthly data plan costs
• Phone purchase (or depreciation over time)
• Repairs or maintenance

You can claim the portion of these expenses used for business purposes. Make sure to estimate this percentage accurately.

4. Parking & Tolls

Any parking fees or tolls you pay while working are deductible. However, parking tickets or traffic violations are not eligible, so be careful to avoid those!

5. Car Cleaning & Supplies

As your vehicle is also your workspace, keeping it clean is essential. You can deduct:

• Car washes
• Vacuuming or detailing services
• Interior cleaning supplies (e.g., wipes, air fresheners, etc.)

6. Food & Drink for Customers

While not mandatory, many drivers provide water bottles, snacks, or candies to passengers. These small hospitality expenses can be deducted as long as they are exclusively for business purposes.

7. Delivery Bags or Equipment

Delivery drivers may need insulated bags or specialized containers to keep food fresh. These are business-related expenses and fully deductible. If you purchase other tools or equipment for your deliveries, such as bike repairs (for cyclists), you can claim those too.

8. Business Licenses

Some provinces or municipalities require rideshare drivers or delivery drivers to obtain a business license. The cost of these licenses is deductible.

9. Accounting & Tax Services

If you hire an accountant or use software to help with your taxes, these costs can also be deducted as a business expense. Investing in professional help can save you time and ensure compliance with the CRA.

How to Stay Organized for Taxes

Staying organized is key to maximizing your tax deductions. Here are some tips:

• Keep a mileage log: Use apps or a notebook to track your business kilometers. This will help you calculate the percentage of vehicle expenses you can claim.
• Save all expense receipts: Whether it’s for gas, car washes, or phone bills, keep physical or digital copies of every receipt. You can use Zoombooks for that purpose.
• Set aside money for taxes: As an independent contractor, taxes aren’t automatically deducted from your earnings. Set aside a portion of your income (typically 25-30%) for tax payments.

Final Thoughts

Driving for rideshare and delivery services in Canada offers flexibility and earning potential, but it also comes with responsibilities, including filing taxes. By understanding your deductible expenses and staying organized, you can significantly reduce your tax burden and keep more of your hard-earned money. Whether you're an Uber driver, Uber Eats, DoorDash courier, or working for other platforms, knowing what you can deduct is crucial.

If you’re unsure about your specific situation, it’s always a good idea to consult with a tax professional who understands the unique challenges and opportunities faced by rideshare and delivery drivers.