The rise of the gig economy has created more opportunities than ever for Australians to earn extra income. Platforms like Uber, Airbnb, YouTube, Etsy and various crypto exchanges make it easy to start a side hustle – but they also make it easier for the Australian Taxation Office (ATO) to see what you earn.
To break down the latest ATO rules and understand why many digital platform earnings are no longer considered untraceable casual income, I sat down with Cassie Brack, a Tax Advisor at LDB. Cassie clarified the critical distinction between a tax-free hobby and a taxable business and detailed how the ATO now uses expanded data-matching to view your income.
Here is what Cassie had to say about navigating the new landscape:
The ATO’s expanded view
Priya: The article mentions that expanded data-matching means the ATO is receiving real-time income reports directly from many digital platforms. What does the ATO now see, and why is this a significant change for side hustlers?
Cassie: Thanks to expanded data‑matching and reporting powers, the ATO now receives real‑time income reports directly from many digital platforms. That means even small or irregular payments may already be visible to the ATO and may need to be declared for tax purposes.
The ATO has significantly expanded its data‑matching capabilities in 2025 so it no longer relies solely on voluntary disclosure. This data is now provided by:
- Ride-share & delivery services such as Uber, UberEats, DoorDash and Menulog
- Content creation platforms including Patreon, OnlyFans, Twitch and YouTube
- E-commerce marketplaces like eBay, Amazon and Etsy
- Short-stay accommodation providers such as Airbnb and Stayz
- Cryptocurrency exchanges
- Banking institutions
Understanding how these rules work can help you stay compliant and avoid unexpected tax bills. This data is matched automatically against your tax return. If the income you declare doesn’t align with what the ATO has received, you may face an amended assessment, a tax bill for the difference, and even interest and penalties for under-reporting.
Hobby vs. business: The critical distinction
Priya: A common misconception is that a small or casual side activity is “just a hobby” and therefore tax-free. How does the ATO distinguish between a tax-free hobby and a taxable business?
Cassie: That is a common misconception. The ATO doesn’t recognise “side hustles” as a separate category – your activity is either a hobby or a business for tax purposes.
Digital platform activities often look like businesses because they involve regular payments, systemised workflows and public advertising. The ATO is likely to consider you to be running a business if:
- You intend to make a profit (even if you haven’t yet)
- You perform the activity repeatedly or continuously
- You keep records, hold an ABN or operate under a business name
- You advertise or actively seek customers
If these factors apply, your income is unlikely to be treated as tax-free hobby income.
Essential steps for business-like side hustles
Priya: For individuals whose side hustle looks like a business in the ATO’s eyes, what are the five essential steps they should take to stay compliant?
Cassie: If you think your activity may fall into business territory, staying organised is essential:
- Keep detailed records: You must keep ATO-compliant tax records for five years, including sales, statements from digital platforms and receipts for deductible expenses.
- Declare all income: Since platforms are reporting directly to the ATO, under-reporting (even of small amounts) is easily detected.
- Claim allowable deductions: If you’re running a business, you may be able to deduct Platform fees, Equipment and supplies, Home office costs, and Business-related subscriptions.
- Manage cash flow: If your tax liability exceeds $1,000, the ATO may place you into the PAYG instalment system, requiring quarterly tax pre-payments.
- Understand ABN and GST implications: If you are carrying on an enterprise, you may need an ABN, and in some cases, will also need to register for GST – especially if your turnover approaches the $75,000 threshold.
Common questions Cassie answers
To wrap up our discussion, I asked Cassie to address a few common questions side hustlers frequently ask about ATO reporting:
| Question |
Cassie’s answer |
| Does the ATO know about income from digital platforms? |
Yes. Most large platforms operating in Australia now report your earnings directly to the ATO through mandatory data-sharing protocols. |
| Do I need to pay tax on small side-hustle income? |
In many cases, yes. If the activity resembles a business, the income is taxable even if earnings are modest, depending on your overall income and circumstances. |
| Can I claim deductions for my side hustle? |
If the ATO considers you to be running a business, you may claim legitimate business expenses, reducing your taxable income. |
| Do I need an ABN or GST registration? |
If you are regularly operating with the intention to generate profit, you may require an ABN. GST registration is required once your annual turnover reaches $75,000. |
Final thoughts
Priya: Thank you, Cassie. Any final thoughts for our readers?
Cassie: With stronger data‑matching rules in place, it’s important to understand your obligations before tax time. If you earn income through digital platforms and aren’t sure how to navigate the new standards, LDB’s tax advisors can help you stay compliant while maximising legitimate deductions.
Our accountants and tax advisors, based in Blackburn in Melbourne’s City of Whitehorse, can review your side‑hustle activity, explain your tax position and help ensure you’re meeting your ATO obligations with confidence.
Call us on (03) 9875 2900 or get in touch online to discuss your situation. You can also follow LDB on LinkedIn for updates on tax, superannuation and business advice.
