Deliveroo partners with Australian app to ease tax headache for its 8,000 riders
Deliveroo has partnered with Solo & Smart, an app that helps contract workers manage their end-of-year taxes by setting up regular savings throughout the year.
Meal delivery giant Deliveroo will make tax time a whole lot easier for its 8,000 local riders thanks to its new partnership with fintech app Solo & Smart. The app is designed for contract workers, sole traders, freelancers and anyone else who is considered to be self-employed. Due to the growing popularity of the gig economy (think driving for Uber, completing tasks on Airtasker) there's a growing number of Australians that fall into this group.
Because Deliveroo riders aren't considered to be employees, but rather are more like independent contractors, Deliveroo isn't obliged to withhold any tax from their earnings throughout the year. Instead, come tax time riders are themselves responsible for ensuring they're paying the appropriate amount of tax on any money made riding for the delivery service. If you're not organised throughout the year, this can create quite an administrative burden come July.
Through the new partnership with Sole & Smart, Deliveroo riders can elect to save a percentage of their earnings to better manage their taxes at the end of the year. By having a portion of their income saved in small pieces throughout the entire year, not only will tax time be a lot easier but they won't have to face one giant tax bill.
The system mimics the way ordinary full-time workers are paid, with a percentage of their pay withheld for tax in line with their marginal tax rate. Except unlike full time employees where the tax is withheld by the Australian Tax Office (ATO) itself, the app simply holds the money on behalf of the user similar to a standard bank account.
Importantly, the app allows self-employed Australians to save a portion of their income from numerous different income sources. For example, if a Deliveroo rider also earns money from Airtasker from time to time, the app will save a portion of their income from both sources.
The app is free to download and set up, but to use the automatic tax savings tool there's a fee of 2.2% after you've been paid. However, it does offer a number of other tools for self-employed Australians like invoice generating and receipt tracking.
If you're self-employed and like the idea of automatically saving some of your pay for tax throughout the year, another option could be to set up a regular payment from your transaction account into a separate, linked savings account which can be done via your mobile or Internet banking without any fees or charges. If you're after a bit more help, a tax agent can help you lodge your tax return correctly and claim any deductions you might be entitled to.