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YouTube Earnings (Do I need to pay tax?)

Newbie

Views 483

Replies 1

Hello,

After doing some research into the matter, I am still quite confused around my YouTube earnings and whether or not they need to be declared at tax time or not. I have not done a tax return yet as I haven't needed to, but in the past 6 months I have earned about $10k and expect that to double by the end of the financial year. I consider YouTube to still be a hobby as I have an actual job as a sports instructor, but I don't know when the ATO considers it as a business and not a hobby. I don't do it with the intent to earn an income either and don't spend much time working on content. If I do need to declare, how would I go about doing this?

Thanks

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Newbie

Replies 0

Hi @Raffy,

 

To answer this question, the main thing you will need to work out is if your work comes under the heading of 'hobby' or 'business'. This is a self-assessment that you will need to make, however there are many helpful resources to help you make this determination.

 

The first useful resource is the Australian Government's 'hobby or business quiz'.

 

Generally speaking, there are a few key factors which may indicate a business is being run:

 

  • You've made a decision to start a business and have done something about it to operate in a businesslike manner, such as  
    • registered a business name, or
    • obtained an ABN.
  • You intend to make a profit – or genuinely believe you will make a profit from the activity – even if you are unlikely to do so in the short term.
  • You repeat similar types of activities.
  • The size or scale of your activity is consistent with other businesses in your industry.
  • Your activity is planned, organised and carried out in a businesslike manner. This may include      
    • keeping business records and account books
    • having a separate business bank account
    • operating from business premises
    • having licenses or qualifications
    • having a registered business name.

 

There is no single factor which determines whether you are in business or not - these are simply guidelines to help you to make an informed assessment.

 

If your activities fit the description of a hobby, there are no tax obligations.

 

If you determine your activities fit the description of a business, you will need to include any income (and other relevant labels) at the Business and Professional Items schedule in your tax return.

 

If you aren't in business yet, it is important to keep these factors in mind as your activities change or grow, so you'll know if your activities constitute a business in the future.

 

Here's the link to the ATO website's article on business vs hobby income. If you're still unsure, you can seek professional guidance or request a private ruling which can give you a definitive and binding answer.

 

Hope this helps!

 

Lawson

1 REPLY 1

Most helpful response

Newbie

Replies 0

Hi @Raffy,

 

To answer this question, the main thing you will need to work out is if your work comes under the heading of 'hobby' or 'business'. This is a self-assessment that you will need to make, however there are many helpful resources to help you make this determination.

 

The first useful resource is the Australian Government's 'hobby or business quiz'.

 

Generally speaking, there are a few key factors which may indicate a business is being run:

 

  • You've made a decision to start a business and have done something about it to operate in a businesslike manner, such as  
    • registered a business name, or
    • obtained an ABN.
  • You intend to make a profit – or genuinely believe you will make a profit from the activity – even if you are unlikely to do so in the short term.
  • You repeat similar types of activities.
  • The size or scale of your activity is consistent with other businesses in your industry.
  • Your activity is planned, organised and carried out in a businesslike manner. This may include      
    • keeping business records and account books
    • having a separate business bank account
    • operating from business premises
    • having licenses or qualifications
    • having a registered business name.

 

There is no single factor which determines whether you are in business or not - these are simply guidelines to help you to make an informed assessment.

 

If your activities fit the description of a hobby, there are no tax obligations.

 

If you determine your activities fit the description of a business, you will need to include any income (and other relevant labels) at the Business and Professional Items schedule in your tax return.

 

If you aren't in business yet, it is important to keep these factors in mind as your activities change or grow, so you'll know if your activities constitute a business in the future.

 

Here's the link to the ATO website's article on business vs hobby income. If you're still unsure, you can seek professional guidance or request a private ruling which can give you a definitive and binding answer.

 

Hope this helps!

 

Lawson