A complete tax guide for content creators

Before we go further on tax responsibilities for content creators, we need to distinguish between a business and a hobby. This is because how you treat your activities will make a big difference in terms of whether you’ll be taxed and what obligations you must meet. ​

Let’s put this simply - expenses from your hobby are not tax deductible. However, if you are running a business (e.g. working as a YouTuber full-time), your income must be declared in your tax return. Your ‘income’ could be money you received from partnerships, appearance fees, gifts from fans and more. ​

The distinction between carrying a business and having a hobby is determined by several factors: ​

Read more:  Is your hobby a business?​

A lot of people have started creating content on various platforms to generate extra income. You need to pay taxes to the ATO if your ‘side hustle’ is determined as a business. In other words, you must declare all your income on your tax return and pay the right amount of tax on it. You may also be eligible to claim back business expenses. ​

The ATO has made it clear that money received for advertising, appearance fees, goods you receive, cryptocurrency, or gifts from fans will be taxed. A free holiday trip from a travel agency as a travel blogger or a free handbag a company send you to promote may sound enticing, but you’ll need to declare the market value of these ‘free products’ to the ATO and pay tax on it. In reality, this may create a cashflow problem when you pay tax to the ATO for ‘free products’.​

Whether to report all gifts and products as assessable income is not always straightforward. If you create content as a hobby instead of for money-making purposes, and a company sends you an unsolicited gift, things become less clear - it will depend on the specific scenario.​

For content creators, the timing of when you receive your income is also important. According to tax regulations, income is deemed to have been earned "as soon as it is applied or dealt with in any way on your behalf or as you direct." As an example, for OnlyFans content creators, income is considered earned when it is credited to their OnyFans account, not when it is transferred to their personal or business account.​

Therefore, keeping income in their platform account will not prevent them from paying taxes on it to the ATO. Additionally, starting from 1 July 2023, a new reporting system will mandate electronic distribution platforms to report their transactions to the ATO. This regime initially applies to ride-sharing and short-term accommodation platforms and then extends to all other platforms, including OnlyFans, starting the 1st of July 2024.​

Read more on ATO's website: is your content creating you income?​

If you create content as a hobby, it’s likely you won’t need to apply for an ABN. However, if your content creation activities are considered a business, then you need to get one. Applying for an ABN can be easily done online by following the instructions from the ATO.​

In Australia, the GST registration threshold is $75,000. If your annual turnover is more than $75,000, you’ll need to become GST registered. This works the same for content creators. ​

For example, if a Youtuber’s income is $75,000 for the 2022/23 financial year, they need to register for GST as soon as they meet this threshold, file BAS returns and pay the GST amount (10%) to the ATO. However, you don’t need to pay GST to the ATO if the content is consumed by foreign resident customers (GST-free), although they still normally need to be taken into account in determining whether the supplier needs to register for GST. ​

*You may still claim back GST credits for the GST-free income from foreign resident customers. ​

If you are not sure whether you need to pay GST or not, you should seek advice from an accountant (like Beany) - they can help you understand your tax obligations. ​

Read more: Are OnlyFans Creators Taxed The Same As YouTubers with regards to GST? | ATO Community​

To claim expenses, you need to have a business rather than a hobby - this means regularly making money from your content as a content creator. One thing to note is that you can only claim a deduction for certain expenses that are directly related to income-generating activities. This may include: ​

However, you can’t normally claim expenses that have a ‘private’ nature, and you need to apportion your business and private expenses. For example, if you have a home-based business and claim occupancy costs, you need to apportion these based on floor area and the time your floor is used for your business. Let’s say you’re a finance Youtuber - you won’t be able to claim gym memberships. The ATO considers these ‘everyday’ expenses as personal as opposed to business expenses.​

Read more on ATO’s occupation specific guides for what you can claim or have a chat with one of our team members. ​

You can file your income tax return yourself, however, hiring an accountant can be a wise idea. An experienced accountant knows the latest tax rules, helps you understand the nature of income you earned, minimise tax responsibilities, lodges your tax return, and you could potentially extend your lodgement deadline*.​

*If you're not registered with a tax agent, you need to file your returns between the 1st of July to the 31st of October every year. If you’re registered with a tax agent (such as Beany) before the 31st of October, you may be eligible for an extension - your deadline could be the 15th of May the following year. ​

Keeping good records is the number one tip from an accountant. Records to keep include tax invoices, bank statements, receipts, and contracts, this way, you’ll have the necessary documents when you need them. In Australia, the ATO requires you to keep records for at least 5 years in case of an audit. ​

As a content creator, hiring an accountant might not be a priority. However, an experienced accountant comes in handy when dealing with your accounting and tax needs such as staying compliant, tax preparation, tax filing, and minimising your tax liabilities. So you can focus on what you do best - creating content that rocks!​

We understand accounting and tax can be overwhelming - and are here to take the weight off your shoulders. Beany's certified accountants and friendly team can help you manage your accounting and tax needs. We carefully interpret and apply tax rules to enable you to stay compliant and pay the least amount of tax legally possible.​​

Our expertise comes without the jargon and is designed to help you save both time and money. To find out more about how we can help, book a call with one of our team members or get started for free today. ​