The ATO has become increasingly sophisticated at identifying undeclared income, with data-matching across platforms including Uber, Airbnb, eBay, and Etsy. Understanding your obligations is important — and the deductions available to side hustlers often reduce the tax significantly.
The key thresholds you need to know
| Threshold | Amount | What it means |
|---|---|---|
| Tax-free threshold | $18,200/year (combined income) | Below this, no income tax |
| GST registration | $75,000 turnover/year | Must register for GST above this |
| Hobby vs business | No fixed threshold | ATO considers profit intent, regularity, and commercial character |
Hobby vs business: the ATO's test
If your side activity is genuinely a hobby (no profit motive, irregular, not commercial), income is generally not taxable and expenses aren't deductible. Once it looks like a business — regular activity, profit motive, systematic approach — it's taxable. The ATO looks at multiple factors, not just profit.
What you can deduct from side hustle income
- Equipment and tools used for the side hustle
- A portion of home internet and phone if used for the business
- Vehicle expenses for business-related travel (not commuting)
- Marketing costs, platform fees, subscription software
- A proportion of home as office if exclusively used for business
- Professional development directly related to the activity
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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