You're making money on the side — maybe it’s tutoring, designing logos, selling candles, or driving Uber on weekends. It feels good. It’s flexible. And then you wonder… do I need to tell the ATO about this?
Short answer? Yes, probably.
Side hustle income in Australia isn’t "free money" — and if it’s hitting your bank account, there’s a good chance it’s taxable. Here’s how to know what you need to declare, what you can claim, and how to keep things stress-free at tax time.
Hobby vs Business: What’s the Difference?
The ATO says it clearly: not all income-generating activity is a business. Some of it’s just a hobby. So how do you tell?
You're likely running a business if:
- You intend to make a profit
- You operate in a business-like way (e.g. ABN, website, regular advertising)
- You repeat or regularise your activities
- You keep records or invoices
You’re likely doing a hobby if:
- It ’s done occasionally or for fun
- You don’t rely on it as income
- You don’t promote or advertise
- You don’t keep financial records
ATO tip: You can use the ATO’s online tool called "Am I in business?" to assess your situation.
Do I Need to Declare Side Hustle Income?
If your side hustle counts as a business or generates income beyond basic hobby levels, then yes — you must declare it. Even cash-in-hand or payments via PayPal or Stripe count.
Examples of taxable side hustle income:
- Freelance graphic design or copywriting
- Selling on Etsy or eBay
- Food delivery or ride-share driving
- Renting out a room or equipment
- Social media influencing (if you’re getting paid)
Failure to declare this income can result in penalties — and yes, the ATO can access data from gig economy platforms.
Registering for an ABN and Reporting Income
If your side hustle is a business, it’s a good idea (and often legally required) to get an ABN (Australian Business Number). It’s free and takes about 15 minutes to register at abr.gov.au.
Once you've got that set up, you can:
- Invoice clients legally
- Register for GST (if you earn over $75k annually)
- Claim deductions against your income
To report side hustle income:
- Use myTax through your myGov account
- Or go through your tax agent or accountant
List your income under "business or professional income," and include any deductions.
What Can I Claim as Deductions?
The good news? If your side hustle is classified as a business, you can often claim expenses related to earning that income. That might include:
- Business-use portion of your internet and phone bill
- Equipment like laptops, ring lights, cameras, tools
- Software subscriptions (Adobe, Canva, Xero, etc.)
- Home office costs (proportional use of electricity, rent)
- Travel costs (fuel, tolls, public transport)
Reminder: You need records — receipts, bank statements, mileage logs — to back it all up.
What About Cash Jobs?
Still getting paid in cash? You still have to declare it. The ATO considers undeclared cash income as tax evasion — and their data-matching programs are only getting smarter.
Quote from the ATO:
"If you are earning income from a side hustle, even if it's paid in cash or via digital platforms, you are required to declare it."
How Ezyiah Makes It Easier
Let’s be honest: no one starts a side hustle because they love tax paperwork. That’s where a tool like Ezyiah comes in:
- Tracks your income (even from multiple platforms)
- Categorises your expenses (so you never miss a claim)
- Sends reminders before BAS or tax time
- Helps you figure out if you’re a business or a hobby
- Works 24/7 — ideal for side-hustlers burning the midnight oil
You don’t need to be an expert. Ezyiah’s here to make tax admin less painful — and help you stay on the ATO’s good side.
Quick Side Hustle Tax Checklist
- Is your activity a hobby or a business? Check the ATO tool
- Earning income? You probably need to declare it
- Register for an ABN if you're running a business
- Track all income, even from PayPal, Stripe or cash
- Claim business-related expenses (with receipts!)
- Use tools like Ezyiah to stay organised year-round
Final Thought
Side hustles are a smart way to earn extra cash — but don’t let tax time catch you off guard. If in doubt, declare it. A bit of prep now saves stress (and fines) later.
With tools like Ezyiah helping track and sort your earnings behind the scenes, you can keep your focus where it should be — growing your side gig, not drowning in spreadsheets.
