Side Hustle Tax in Australia: What You Actually Have to Declare
Earned money from Airbnb, Uber or freelancing? All side hustle income is taxable in Australia. The ATO rules, hobby vs business test, and what to claim.
By Timothy Hirou GaschereauPublished 10 min read
This article is general information only and does not constitute tax advice. This is part of a wider guide to crypto and alternative income on Snowball Invest. Thinking about starting one? Our side hustle ideas guide covers the options themselves.
Quick answer
Every dollar you earn from a side hustle is taxable in Australia, cash, Airbnb, Etsy, Uber, freelance work, all of it. There's no minimum threshold. The only exception is a genuine hobby, and the ATO decides hobby vs business using a multi-factor test, not a dollar figure. Declare it in your myTax return, claim legitimate deductions, and keep records for five years.
In this guide
- →The golden rule: all income is taxable, regardless of amount or payment method
- →The ATO's real hobby vs business test, and why there's no income threshold
- →Where to actually declare different types of side income in myTax
- →What deductions are available, and which aren't
- →The non-commercial loss rules if your side hustle runs at a loss
💰 The golden rule: all income is taxable
The ATO is clear: if you earn income, you must declare it. It doesn't matter if you're paid in cash, only made a few hundred dollars, run it from your couch, or never got a payment summary. The obligation to declare is on you, not on whoever paid you. This covers Airbnb and short-term rentals, Uber and rideshare including tips, Etsy and online selling, freelance work, gig economy jobs, regular Facebook Marketplace selling, and even crypto staking rewards and airdrops.
🧭 Hobby or business? The multi-factor test
🎯 The essential: There is no income threshold that makes something a hobby. Earning $500 doesn't make you safe, earning $50,000 doesn't automatically make you a business. The ATO looks at the nature of the activity.
A hobby is something done for personal enjoyment, where making money isn't the primary goal and there's no real expectation of profit. Hobby income isn't taxable, but hobby expenses aren't deductible either.
A business is assessed on a weight-of-evidence basis: do you intend to make a profit, do you operate in a commercial, business-like manner (records, a separate bank account), advertise to the general public, repeat the activity continuously, and operate at a scale sufficient to generate profit. No single factor decides it, the more that apply, the more likely it's a business. Once your turnover climbs, keep an eye on the $75,000 GST registration threshold too, it's a separate obligation from simply being classified as a business.
If the ATO reclassifies your hobby as a business, you'll owe tax on all past income, potentially with interest and penalties. When in doubt, declare it.
📝 Where to declare it
| Income type | Where in myTax |
|---|---|
| Sharing economy (Airbnb, Uber, Etsy, not run as a business) | "Other income" → sharing economy/marketplace income |
| Rental income from accommodation | "Rent" section, not "Other income" |
| Business income | "Business and professional items" schedule, an ABN is generally required |
| Crypto staking and airdrops | "Other income", capital gains from selling go separately under "Capital gains" |
🧾 What you can deduct
If you're running a business, you can claim expenses directly related to earning your income, platform fees and commissions, equipment and tools, vehicle expenses, home office costs, marketing, and the cost of managing your tax affairs. The expense must be incurred in earning your assessable income, personal expenses don't count, and mixed-use expenses like a phone used for both personal and business need to be apportioned to the business-use percentage only.
If you're classified as a hobby, nothing is deductible, one of the key reasons the hobby vs business distinction actually matters.
📉 Business losses: the non-commercial loss rules
If your side hustle makes a loss, you can't automatically offset it against your salary. To claim it in the current year (with taxable income under $250,000), you need to pass one of four tests: assessable income of at least $20,000, profitable in 3 of the last 5 years, real property used in the business worth at least $500,000, or other assets used worth at least $100,000. Fail all four and the loss is deferred to a future profitable year rather than lost.
🗂️ Record-keeping
Keep records for five years from when you lodge your return, bank statements, platform payment summaries, receipts for every expense claimed, and a logbook if claiming vehicle expenses. No receipt generally means no deduction.
🪪 Do You Need an ABN for Your Side Hustle?
The ATO's real test, and what happens if you don't have one when you should.
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❓ Frequently asked questions
Do I have to declare side hustle income if I'm already employed full-time?
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Yes. Your employer's PAYG withholding only covers your salary. You declare everything in your annual tax return, and the ATO calculates what you owe or are owed across all income sources combined.
Is there a minimum amount I can earn before I have to declare it?
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No. There's no minimum threshold. Even $50 from a side hustle is technically assessable income, though the tax-free threshold may mean you pay no tax overall if your total income is low.
Do I need an ABN for my side hustle?
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It depends on whether the ATO's multi-factor test classifies your activity as a business. If you're a hobby, you don't need one. Operating without one when you should creates real problems, covered in our dedicated ABN guide.
What if I get paid in cash, does the ATO still know?
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The ATO has data-matching programs pulling information from banks, platforms, and other government agencies. Cash income is still taxable, declaring it is always safer than hoping it goes unnoticed.
Can I claim my home internet as a deduction?
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Only the portion used for your side hustle. If you use it 10% of the time for freelance work, you can claim 10% of the cost, and you need to be able to justify that percentage if asked.
Does Airbnb report my income to the ATO?
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Yes. Sharing economy platforms are required to report income paid to Australian hosts and drivers directly to the ATO, which cross-checks it against your tax return.
📚 Recommended reading
The Barefoot Investor
Scott Pape
Australia's best-selling money book ever. A simple system for accounts, budgeting, debt and a real emergency fund in one.
Some links above are affiliate links. If you buy through them, Snowball Invest may earn a small commission at no extra cost to you. We only recommend books we'd suggest anyway.
Sources
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Timothy Hirou Gaschereau
Founder of Snowball Invest, not a financial adviser.
I write about what I'm learning myself, because nobody ever taught us how to take control of our own money. It's a skill, not a mystery, and it's never too late to learn it. The best day to start was yesterday, the second best is today.
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