Side Hustle Income in Australia: Simple Records for Etsy, Markets and Freelance Work
More Australians than ever are earning a bit extra: selling on Etsy or at markets, freelancing, tutoring, pet sitting, making cakes, or reselling. It's a great way to ease the cost of living pressure. It also brings a question many people put off: what do I need to keep for tax?
This is general information only, not tax advice. Check ato.gov.au or a registered tax agent for your situation.
Hobby or business?
The ATO looks at a range of factors to decide whether an activity is a hobby or a business. They include whether you intend to make a profit, whether you do it regularly and repeatedly, whether it's planned and organised like a business, and the size and scale of the activity. No single factor decides it. The ATO website has a guide to help you work out which applies to you.
Why it matters: if it's a business, the income generally needs to be declared, and you may be able to claim business expenses. If it's genuinely a hobby, the rules are different. If you're not sure, ask a registered tax agent rather than guessing.
Income from online platforms
If you sell or provide services through online platforms, the ATO may receive information about your sales from some platforms through data-matching and reporting arrangements. That's a good reason to keep your own accurate records that match what the platforms show.
Get an ABN if you're running a business
If you're carrying on a business, you can apply for an Australian Business Number (ABN) for free through the Australian Business Register. Be careful of websites that charge a fee for this; the official application is free.
GST: when it applies
You must register for GST when your business turnover reaches the GST threshold. Below that, registering is optional. If you register, you'll generally need to charge GST on sales and lodge business activity statements. Our BAS guide for sole traders covers the basics.
What records to keep
For a small side business, keep:
- **Every sale:** date, what was sold, amount received, platform or customer
- **Platform fees and payouts:** download platform reports regularly
- **Every expense:** date, supplier, what it was for, amount, receipt
- **Assets:** equipment you bought, like a printer, sewing machine or laptop, with the date and cost
- **Home-based business records:** if you work from home, notes on how much of your home and time is used for the business
- **Bank statements** for your business account
The ATO generally expects records to be kept for five years.
Separate your money
The single most useful step is a separate bank account and card for the side hustle. Every sale goes in, every business expense comes out. When tax time comes, your bank statement already does half the work. It also shows you clearly whether the side hustle is actually making money after costs.
Common expenses side hustlers check
- Materials and stock
- Packaging and postage
- Platform and payment processing fees
- Advertising
- Software and subscriptions used for the business
- Equipment, which may be claimed differently depending on cost
- A portion of phone and internet used for the business
Only claim the business portion of anything you also use personally, and keep the receipt.
A 15-minute weekly routine
- Download or note this week's sales from each platform.
- Snap photos of any receipts and file them in one folder.
- Enter income and expenses into your spreadsheet.
- Move a percentage of profit into a separate tax savings account.
Do that weekly and the end of the financial year becomes a quick job.
Setting aside money for tax
Side hustle income doesn't usually have tax taken out automatically. Your income from your side hustle is added to your other income and taxed at your marginal rate. A common approach is to move a percentage of every payment into a separate account. The right percentage depends on your total income; a registered tax agent can help you set it. If your business income grows, the ATO may put you into PAYG instalments so you pay during the year.
Know your numbers
Records aren't only for tax. They tell you which products sell, which months are busy, and whether your prices cover your time and costs. Look at your sales by product once a quarter and focus on what works.
Mums running a business from home
Many Aussie side hustles are run from the kitchen table around kids and part-time work. Keep it light: a phone folder for receipts, one business bank account, and one weekly 15-minute session. Consistency matters far more than fancy software.
Getting help
The ATO has free small business resources and webinars, and business.gov.au has guides for starting out. If your side hustle is growing, a registered tax agent or BAS agent can save you time and stress.
Mistakes to avoid
- Mixing business and personal spending in one account
- Leaving receipts until June
- Forgetting cash sales at markets
- Claiming personal items as business expenses
- Paying a third-party site for an ABN that's free from the official register
Tools that help
The Sole Trader Income & Expense Spreadsheet is a simple sheet for sales and costs by month. The Australian Tax Time Bundle adds GST and BAS record trackers, and the Sole Trader Tax & BAS Dashboard app shows totals and key dates. See also the sole trader tax tracker guide.
Pricing so it's worth your time
Many side hustlers underprice because they only count materials. When you set prices, include materials, packaging, platform and payment fees, postage you don't charge for, and a fair amount for your time. If a product barely covers its costs after fees, it may be costing you money once your hours are counted. Your records make this easy to check.
Your records also make it easier if you ever need to show income, for example when applying for a loan or a rental, because lenders and agents often ask self-employed people for evidence of earnings.
Keep records sorted all year
See the Australian Tax Time Bundle, the Sole Trader Income & Expense Spreadsheet, or the Sole Trader Tax & BAS Dashboard app.
FAQ
Do I need to declare side hustle income in Australia?
If your activity is a business, the income generally needs to be declared. The ATO has a guide to help you work out whether it's a hobby or a business.
Is an ABN free?
Yes. Applying for an ABN through the official Australian Business Register is free. Be wary of sites that charge a fee.
What records should I keep for my Etsy shop?
Keep every sale, platform fees and payouts, expense receipts, equipment purchases and bank statements. Records are generally kept for five years.
How much should I set aside for tax from side income?
It depends on your total income and marginal rate. A registered tax agent can help you choose a percentage to move into a separate account.
General information only, not financial or tax advice. Check ato.gov.au or a registered tax agent for your situation.
Try it in an app
Side Hustle Income & Tax Tracker (AU) (A$29, one-off): Track side-hustle income and expenses by Australian financial year, set money aside for tax, and watch the GST turnover threshold.