“Gig economy” platforms like Airtasker are allowing Australians to earn some extra cash by completing a staggering variety of odd jobs – everything from gardening to data entry and even standing in line for concert tickets! Here, we explain the tax issues that arise when you earn money performing these “gigs”.
It’s important to understand that these platforms are used by everyone from “moonlighters” making some extra money on the side, through to self-employed people running substantial businesses who use these platforms to get new clients. Certain tax issues like GST registration can therefore depend on the person’s particular circumstances.
First, the income you earn from these sites is assessable and you must declare the gross amount of income in your tax return (ie before subtracting platform fees). This means you need to keep records of your earnings – and receipts of all expenses as you’re entitled to claim relevant deductions, including platform fees and commissions, equipment and car expenses, among others. A tax adviser can help you work out what you’re entitled to claim.
If your annual turnover is $75,000 or more, you must register for GST. Below this threshold, registration is optional. Being registered for GST means that you must report and remit GST of 10% to the ATO. However, you can claim GST credits on the GST components of business expenses you incur, including the GST included in any platform fees.
If you must register for GST (or wish to do this voluntarily), you’ll need an ABN. But what if your turnover is below $75,000 and you don’t want GST registration? While you’re not legally required to have an ABN, there are downsides of not having one: in some cases, businesses who hire you may have to withhold tax at the top marginal rate from the payment if you don’t provide an ABN.
Anyone who carries on an “enterprise” may apply for an ABN. Most gig platform users, as independent contractors performing services to make money, arguably carry on an enterprise. If you’re only planning to use gig platforms very occasionally (or as part of a genuine “hobby” like photography or crafting, rather than to make a profit), talk to a tax adviser about your ABN needs.
Whether you’re using gig platforms occasionally or as part of a significant business, let us handle all your tax issues. We offer expert advice and assistance with deductions, ABNs and GST, freeing you up to spend more time pursuing your income-earning opportunities.