Side Hustle Tax Guide: Australian Freelancers & Gig Workers 2025
IntuitiveCalc Team
Financial Content Specialist
Whether you're driving for Uber, selling on Etsy, or freelancing on weekends, here's everything you need to know about tax.
Is My Side Hustle Taxable?
Yes. In Australia, all income is taxable – including side hustles, gig work, freelancing, and selling goods online. The ATO tracks platform payments (Uber, Airbnb, eBay) through data matching, so don't think small amounts fly under the radar.
ATO Data Matching
The ATO receives data from ride-share apps, accommodation platforms, freelance marketplaces, and payment systems like PayPal and Stripe. They know about your side income – report it correctly to avoid penalties.
Do I Need an ABN?
An Australian Business Number (ABN) is free and usually required for side hustles. You need one if:
- You're carrying on a business or enterprise
- Clients or platforms require invoices with ABN
- You want to register for GST (optional under $75k)
- You're a contractor (not an employee)
Sole Trader vs Company
Most side hustlers operate as a sole trader (simplest structure). You use your personal tax file number and report business income in your personal tax return. You only need a company structure if you're earning significant income and want liability protection.
Getting an ABN
Apply free at abr.gov.au. Takes about 10 minutes online. You'll get your ABN immediately in most cases. Never pay for ABN registration – it's always free from the government.
How Side Hustle Income is Taxed
Side hustle income is added to your employment income and taxed at your marginal rate. This often means your side income is taxed at your highest rate.
| Salary | Side Income | Tax Rate on Side Income | Tax on $10k Side Income |
|---|---|---|---|
| $40,000 | $10,000 | 19-32.5% | $2,275 |
| $80,000 | $10,000 | 32.5% | $3,250 |
| $120,000 | $10,000 | 32.5% | $3,250 |
| $150,000 | $10,000 | 37% | $3,700 |
Plus 2% Medicare Levy on total income.
Common Side Hustles & Tax Implications
Ride-Share & Delivery (Uber, DiDi, DoorDash, Menulog)
- ABN: Required
- GST: Required (ride-share must register regardless of income)
- Super: You're a contractor – no employer super, consider personal contributions
- Deductions: Fuel, car expenses, phone, tolls, cleaning supplies
Uber & GST
Ride-share drivers MUST register for GST from day one – there's no $75,000 threshold. Food delivery drivers only need to register if earning over $75,000/year.
Freelancing (Design, Writing, Consulting)
- ABN: Required for invoicing
- GST: Optional under $75k turnover
- Deductions: Computer, software, home office, internet, professional development
- Record keeping: Keep invoices, receipts, contracts
Selling Online (eBay, Etsy, Depop)
- Hobby vs Business: Key distinction – hobbies aren't taxable, businesses are
- Business indicators: Regular sales, intent to profit, business-like manner
- Deductions: Materials, packaging, postage, platform fees, equipment
Airbnb & Short-Term Rentals
- Income: Fully taxable as rental income
- Deductions: Proportionate expenses (cleaning, utilities, depreciation)
- CGT: May affect main residence exemption if renting part of your home
Content Creation (YouTube, Instagram, TikTok)
- Income sources: Ad revenue, sponsorships, affiliate marketing, merchandise
- ABN: Recommended once earning regularly
- Deductions: Camera equipment, lighting, editing software, props, travel for content
Tax Deductions for Side Hustlers
The golden rule: You can claim expenses that are directly related to earning your side hustle income. Keep receipts for everything.
Common Deductions
| Category | Examples | Notes |
|---|---|---|
| Home Office | Desk, chair, computer, electricity | Use fixed rate (67c/hr) or actual costs |
| Vehicle | Fuel, rego, insurance, depreciation | Logbook or cents per km (85c) |
| Phone & Internet | Business portion of bills | Keep a diary of usage for 4 weeks |
| Equipment | Tools, cameras, laptops | Under $300 instant deduction; over = depreciate |
| Software | Subscriptions, apps, cloud services | Fully deductible if for business |
| Professional | Courses, insurance, accounting fees | Must be related to current income |
Home Office Deduction Methods
For 2024-25, you have two options:
- Fixed rate (67c/hour): Covers electricity, internet, phone, stationery. Keep a record of hours worked. Still claim separate depreciation for assets.
- Actual costs: Calculate actual business proportion of expenses. More complex but potentially higher deductions.
GST Basics
GST (Goods and Services Tax) is a 10% tax on most goods and services. You add it to your prices and pay the collected GST to the ATO.
When to Register for GST
- Mandatory: If turnover exceeds $75,000/year (or $150k for NFPs)
- Mandatory for ride-share: From your first ride, regardless of income
- Optional: Below threshold – can register voluntarily to claim GST credits
GST Pros and Cons (Under $75k)
Reasons to Register
- Claim GST credits on purchases
- Appear more professional
- Already buying GST-heavy supplies
Reasons Not to Register
- Extra paperwork (BAS returns)
- Must charge 10% more or absorb it
- Few GST credits to claim
Reporting Requirements
Tax Return
Report business income in your individual tax return under "Business and professional items." You'll need:
- Total business income
- Itemized deductions
- Net business profit or loss
BAS (Business Activity Statement)
If registered for GST, you lodge BAS quarterly (or monthly for larger businesses). Report:
- GST collected on sales
- GST paid on purchases (credits)
- Net GST to pay or refund
- PAYG instalments (if applicable)
Superannuation for Side Hustlers
As a sole trader, no one is paying super for you. Consider making personal contributions for:
- Tax deduction (concessional contributions up to $30,000/year cap)
- Building retirement savings
- Accessing government co-contribution (low-income earners)
Super Strategy
If you earn $5,000 side income and are in the 32.5% bracket, contributing $2,000 to super saves $350 in tax (32.5% vs 15% super tax). Plus, it builds your retirement savings!
Record Keeping
The ATO requires you to keep records for 5 years. Essential records include:
- All invoices issued and received
- Receipts for all business purchases
- Bank statements showing income and expenses
- Vehicle logbook (if claiming car expenses)
- Home office usage diary
Apps for Record Keeping
- Xero, MYOB, QuickBooks: Full accounting software
- Rounded, Wave: Free options for freelancers
- ATO app: Scan and store receipts (myDeductions)
Avoiding Common Mistakes
1. Not Setting Aside Tax
Put 25-30% of side income aside for tax. Many side hustlers get a nasty surprise at tax time. Open a separate savings account for tax.
2. Mixing Personal and Business Expenses
Use a separate bank account for business income and expenses. Makes record keeping much easier and looks more legitimate to the ATO.
3. Not Reporting Small Amounts
There's no threshold below which income is tax-free. Even $500 from Airtasker or selling on Facebook Marketplace should be declared.
4. Claiming Personal Expenses
Only claim the business portion of mixed expenses. If your phone is 30% business use, only claim 30% of the bill.