Side Hustle & Gig Economy Tax in Australia 2025-26

Is side hustle and gig economy income taxable?

Yes. If you earn money from a side activity — ride-share, food or parcel delivery, freelance and contract work, online marketplace sales, content creation, tutoring, or renting out a room or your car — that money is assessable income. It goes on your tax return alongside your salary, and it does not matter whether it was paid by bank transfer, through an app, or in cash.

The only common exception is a genuine hobby: something you do for enjoyment, not run in a business-like way to make a profit. If your activity has tipped over into a business, the income is taxable (and your expenses become deductible).

The ATO already knows: platform reporting

Since the Sharing Economy Reporting Regime came in, digital platforms must report the income they pay you directly to the ATO. This covers ride-sourcing, short-term accommodation (Airbnb, Stayz), asset and equipment hire, and other services booked through apps. Platforms report twice a year, and the ATO data-matches those figures against your tax return.

In plain terms: undeclared Uber, delivery or Airbnb income is very likely to be flagged. Declaring it correctly is both the law and the way to avoid a review, interest and penalties.

How much tax will you pay?

Your side hustle is taxed on its profit — what you earned minus what it cost you to earn it. That profit is added on top of your other income and taxed at your marginal rate. There is no separate “side income” rate.

The catch is that no tax is withheld from gig payments the way it is from a salary. The full amount lands in your account, so the tax is not settled until you lodge. If your main job already has you in the 30% bracket, plan for roughly 30c of every profit dollar to go to tax — more if you are higher up the scale.

Practical tip: open a separate savings account and move 20–30% of each payment into it as you go. Come tax time, the bill is already covered.

Do you need an ABN or GST?

ABN

If you are carrying on a business — operating regularly and in a business-like way to make a profit — you should have an ABN (it is free from the Australian Business Register). Ride-sourcing drivers are required to have one. An ABN does not change your tax rate; your net profit is still taxed at your ordinary marginal rates.

GST

GST generally only applies once your business turnover reaches $75,000 a year. There is one important exception: ride-sourcing (carrying paying passengers, e.g. Uber, DiDi, Ola). Drivers must register for GST from the first dollar, no matter how little they earn. Food and parcel delivery on its own is not caught by that special rule and follows the normal $75,000 threshold.

What you can claim

Deductions are where gig workers save real money. You can claim the work-related portion of the costs of earning your income, including:

• Car costs — either cents per kilometre (88c/km, up to 5,000 km) or the logbook method for fuel, rego, insurance, servicing and depreciation
• Phone and data used for the platform app
• Platform commissions and service fees taken by the app
• Equipment — delivery bags, bike or scooter costs, tools, a laptop
• Other running costs — tolls, parking, cleaning, supplies, insurance

You must apportion anything used privately as well (you cannot claim 100% of a phone you also use personally), and you must keep records and receipts. A logbook and an expense spreadsheet pay for themselves at tax time.

PAYG instalments: paying as you go

Once your side income becomes substantial, the ATO may move you onto PAYG instalments — prepaying your expected tax in quarterly amounts rather than one lump sum at the end. This is not an extra tax; it simply spreads the liability across the year and avoids a single large bill. The ATO will let you know if you are entered into the system.

Keep it clean: records and separation

Treat the side hustle like a small business even if it is tiny. Keep income and expenses in a separate account, save every receipt, log your kilometres, and reconcile against the platform's annual statement. Good records turn a stressful tax time into a five-minute job — and protect you if the ATO ever asks.