Side Hustle Tax: Do You Need to Pay Tax on Gig Income?
Earning extra income from freelancing, ridesharing, delivery apps, or contract work? The ATO treats this as assessable income. You must declare your side hustle earnings and can claim related deductions. This estimator helps you understand how gig income affects your tax bill under the 2025-26 Stage 3 tax brackets.
FAQ
Q1: Do I need to declare side hustle income if I get paid cash?
Yes. All income is taxable. The ATO matches bank accounts and gig platforms. Undeclared income can result in penalties. Keep records, issue invoices, and lodge a tax return including a business schedule.
Q2: What deductions can I claim for my side hustle?
Expenses directly related to earning income: home office (electricity, internet proportion), mobile phone usage, vehicle expenses (logbook or cents/km), equipment (laptop, tools), software subscriptions, training related to work, platform fees. Keep receipts for 5 years.
Q3: Do I need to pay GST on my side hustle?
If your annual turnover is $75,000 or more, you must register for GST, charge 10%, and lodge BAS. Under $75k, you may choose voluntary registration. Many freelancers start under the threshold and register once they exceed it.
Q4: Will my side hustle push me into a higher tax bracket?
Australia's tax system is progressive: only income within each bracket is taxed at that rate. Earning extra $1,000 only adds the marginal rate (19%, 30%, or 45%) on that amount. Use this calculator to see your marginal rate on side hustle income.
Instalments: If tax owing exceeds $1,000, the ATO may require quarterly PAYG instalments.