Side hustles and gig work: do you need to declare it?
Selling online, freelancing, delivery driving or renting out a room? When side income is taxable, when you need an ABN, and what you can claim.
More Australians are earning extra money on the side through Airtasker, Etsy, eBay, food delivery, freelancing or renting out a car space. Here's how the tax rules usually work.
Hobby or business?
If you're doing something regularly, trying to make a profit, and it's run in a business-like way, it's likely a business and the income is taxable. A genuine hobby, such as occasionally selling things you've made for friends, usually isn't. Selling your own used personal items (like old clothes) is generally not taxable either.
What you need to do if it's a business
- Get an ABN (our fee from $100 + GST).
- Include the income in your tax return, together with your salary or wages.
- Register for GST if your business turnover reaches $75,000, or from day one if you do ride-sourcing. See the $75,000 GST rule.
- Keep records of income and expenses for five years.
The ATO can see platform income
Many online platforms, including ride-sourcing and short-term accommodation platforms, report their users' income directly to the ATO. If it's missing from your return, expect a letter.
Expenses you can claim
- Stock or materials you buy to sell
- Platform fees, advertising and website costs
- Equipment and tools (see the instant asset write-off)
- The business share of your phone, internet and car
Put money aside
No tax is taken out of side income automatically. Putting aside around a quarter to a third of your profit can prevent a tax bill surprise. We can work out a more accurate amount for you.
Tell us about your side hustle and we'll explain exactly what you need to do.
This article is general information only and does not take your personal circumstances into account. It is not financial or tax advice. Tax rules change, so please contact us before acting on it. Information current as at the date above.