Multiple Income Streams and Tax in Australia

Earning money from a side hustle, freelance work, or gig economy job? The ATO wants to know about every dollar. Here is everything you need to understand about how multiple income streams affect your tax in Australia.

Do I Need to Declare Side Hustle Income?

Yes. Every cent of income you earn in Australia must be reported on your tax return. This includes:

• Freelancing and contract work
• Gig economy platforms (Uber, DoorDash, Airtasker, Fiverr)
• Selling goods online (Etsy, eBay, Amazon)
• Rental income from property or a spare room
• Investment income (dividends, interest, crypto gains)
• Cash-in-hand jobs

2025-26 Tax Brackets (ATO)

All your income gets combined into one total. Tax is calculated on your total taxable income using these brackets:

On top of income tax, you pay the Medicare levy of 2% on your total taxable income (with some low-income exemptions).

How Multiple Income Streams Stack

If you earn $60,000 from your day job and $20,000 from freelancing, your total taxable income is $80,000. You do not get a separate tax-free threshold for each income stream - it all goes into one bucket.

This is why many side hustlers get a surprise tax bill. Your employer is deducting PAYG based on $60,000, but you actually owe tax on $80,000. The difference comes due at tax time.

GST Registration

If your total business turnover (not profit) exceeds $75,000 per year, you must register for GST. This applies to the total of all your business activities combined.

Once registered, you charge 10% GST on your services and can claim GST credits on business expenses. You lodge BAS (Business Activity Statements) either monthly or quarterly.

ABN - Do You Need One?

If you are running a business or working as a sole trader (including most freelance and gig work), you need an ABN (Australian Business Number). It is free to register at abr.gov.au.

Without an ABN, businesses that pay you are required to withhold 47% of your payment for tax.

Common Deductions for Side Hustlers

You can claim deductions for expenses directly related to earning your side hustle income:

• Home office: A portion of your internet, electricity, and phone costs
• Equipment: Laptops, cameras, tools, software subscriptions
• Vehicle: If you use your car for gig work (logbook method or cents-per-km)
• Professional development: Courses and training related to your work
• Insurance: Professional indemnity, public liability
• Accounting fees: The cost of preparing your tax return

Superannuation

If you are a sole trader or freelancer, you are not legally required to pay yourself super. But it is strongly recommended. You can claim a tax deduction for personal super contributions up to $30,000 per year (concessional cap).

Our tracker uses the current super guarantee rate of 11.5% when calculating what you should set aside each week. This helps you build retirement savings even without an employer doing it for you.

PAYG Instalments

If you owe more than $1,000 in tax at the end of the year, the ATO will likely put you on PAYG instalments for the following year. This means you pay estimated tax quarterly instead of one big bill at tax time.

This is actually helpful - it forces you to pay as you go rather than scrambling to find a lump sum in October.

Record Keeping Tips

1. Keep a separate bank account for your side hustle income
2. Transfer your "set aside" amount to a high-interest savings account each week
3. Save all receipts digitally (photos or scans)
4. Use our tracker to monitor your income streams in one place
5. Review your estimated tax quarterly and adjust if income changes

Disclaimer: This guide is for general information only and is not financial or tax advice. Consult a registered tax agent for advice specific to your situation. Tax rates are based on ATO 2025-26 individual rates.