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Side hustle tax basics in Australia: what to report (educational)

By FastBuySale Newsroom · 9 Nov 2026 · 19m ago

Why side hustles create tax questions

Many Australians earn extra money outside their main job: selling crafts, tutoring, driving for a platform, renting out a car space, freelancing or creating content. Because no tax is withheld from most side income, it is easy to forget that it may need to be declared. The ATO also receives data from banks and digital platforms, so undeclared income is more likely than ever to be noticed.

This educational guide explains what to report, with examples, using ATO guidance. It is not tax advice. Your situation depends on the facts, and a registered tax agent can help with anything complex. It makes no promise about income.

Hobby or business: the first question

The ATO does not tax genuine hobbies, but it looks at the facts rather than what you call the activity. Indicators that you are running a business include:

You intend to make a profit, or have a reasonable prospect of profit.

The activity is repeated and regular.

You operate in a business-like way, such as keeping records, advertising, having a business plan or a dedicated workspace.

The size or scale of the activity is similar to other businesses in the same industry.

Example: Leah makes candles for friends and occasionally sells a few at a school fair, roughly covering the cost of materials. That looks like a hobby. Jack makes candles every week, sells them through an online store and at markets, tracks his costs and plans to expand. That looks like a business, so his profit is assessable income.

Side income that is generally taxable

Business income from goods or services you sell regularly, including online sales of items you make or buy to resell.

Payments for services, such as freelancing, tutoring, pet sitting or odd jobs.

Ride-sourcing, food delivery and other platform work.

Rent from letting a room, a whole property, a car space or equipment, including short-term accommodation.

Content creation income such as sponsorships, platform payouts and free products received as payment.

Interest, dividends and capital gains, including gains on crypto assets.

Side income that is generally not taxable

Proceeds from occasionally selling your own used personal items, such as clothes or furniture, for less than you paid are generally not income. Gifts and genuine hobby proceeds are generally not assessable. Note that capital gains tax can apply to personal use assets bought for more than 10,000 dollars and to collectables, such as art or jewellery, bought for more than 500 dollars.

When you need an ABN

You need an Australian Business Number if you are carrying on an enterprise. Applying is free through the Australian Business Register. If you are not carrying on an enterprise, you should not apply for one, and you must not use an ABN for activities that are really employment.

When you need to register for GST

You must register for GST once your GST turnover from business activities is 75,000 dollars or more a year. Ride-sourcing is different: drivers must register from their first trip, regardless of turnover. Below the threshold, other side businesses can choose to register, which lets them claim GST credits but requires them to charge GST and lodge activity statements.

How tax is worked out

Side income is added to your other income, such as wages, and taxed at your marginal rate. The tax-free threshold of 18,200 dollars applies to your total taxable income once, not separately to each source, and the Medicare levy generally applies as well. Because your main employer already withholds tax as if your wages were your only income, adding side income usually means you owe extra at tax time.

Worked example: Mia earns 70,000 dollars a year in a salaried job and makes 8,000 dollars profit from weekend photography after expenses. Her taxable income is 78,000 dollars, so the 8,000 dollars is taxed at her marginal rate plus the Medicare levy. If she spends nothing of it until tax time, she should set aside roughly a third of the profit to be safe, depending on her deductions.

Deductions you can claim

For a business, you can generally claim expenses incurred in earning the income, such as materials, stock, platform fees, advertising, software, the business share of phone and internet, travel between business locations and the business portion of car expenses. Assets such as cameras and computers are usually depreciated, although simplified rules and instant asset write-off thresholds may apply to small businesses; check the current rules for the year you buy. You need records to support every claim.

You cannot claim private expenses, the cost of hobby activities or expenses that relate to income you do not declare.

Losses and the non-commercial loss rules

If your side business makes a loss, you generally cannot offset it against your salary unless you pass the non-commercial loss rules. You need an adjusted taxable income below 250,000 dollars and generally must pass one of four tests: assessable business income of at least 20,000 dollars, a profit in three of the past five years, real property used in the business worth at least 500,000 dollars, or other business assets worth at least 100,000 dollars. If you do not pass, the loss is deferred and carried forward to offset future profits from the same activity.

Platform reporting and data-matching

Under the sharing economy reporting regime, electronic distribution platforms report transactions to the ATO. Ride-sourcing and short-term accommodation have been reported since 1 July 2023, and most other platform transactions since 1 July 2024. The ATO also runs data-matching programs that use information from banks, marketplaces and other third parties. Declaring your side income accurately avoids penalties and interest.

PAYG instalments

If your business and investment income grows, the ATO may enter you into pay as you go instalments, which spread your expected tax across the year instead of leaving a large bill at tax time. You can vary instalments if your income changes.

Lodging your return with side income

Most people declare side business income in the business and professional items section of their individual tax return, which asks for income, expenses and the net result. If you use a registered tax agent, they lodge on your behalf and may have a later deadline than the usual 31 October date for self-lodgers. Rental income from a room or property goes in the rental section, and capital gains, including on crypto, have their own section. Prefilled information in your online return may already show some platform or bank data, but you are responsible for checking that it is complete and correct.

Records to keep

Keep records of income, expenses, receipts, invoices, bank statements, logbooks and platform statements for five years from when you lodge your return. Simple spreadsheets or bookkeeping apps work well. A separate bank account for the side hustle makes records far easier.

Printable checklist

Activity: hobby or business, judged on the ATO's factors?

Income: every taxable stream identified, including platforms, rent and content?

ABN: needed because I am carrying on an enterprise?

GST: turnover approaching 75,000 dollars, or ride-sourcing, which needs registration from the first trip?

Deductions: only business expenses, with records?

Losses: do I pass the non-commercial loss rules?

Tax set aside: money saved for the extra tax at my marginal rate plus the Medicare levy?

Records: kept for five years?

Common misunderstandings

"Side income under the tax-free threshold is tax-free." The threshold applies to total income, so if you already earn wages above it, side income is taxed at your marginal rate.

"Cash jobs do not need to be declared." All assessable income must be declared, however it is paid.

"If the platform did not send me a form, the ATO does not know." Platforms report transactions to the ATO directly.

The bottom line

Side hustle income in Australia is taxable if the activity is a business or the income is otherwise assessable, and it is added to your other income. Get an ABN if you are carrying on an enterprise, watch the GST thresholds and keep good records. Use ATO guidance as your official reference and consider a registered tax agent for complex situations. This article is educational only and not tax advice.

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