Content Creator Tax: Hobby, Side Hustle or Business?

Content creator tax comes down to one question: is what you do a hobby, a side hustle or a business? Ad money, brand deals, tips and free products can all count as income, and in October the ATO put out new guidance for content creators, along with a draft ruling on when an individual is carrying on a business (ATO: media release).

As at 7 November 2026: the draft ruling, TR 2026/D2, is open for comment until 27 November 2026, and it won't take effect until it's finalised. When it is, the ATO proposes it apply to past years as well as future ones (ATO: TR 2026/D2).

Prefer to listen? We covered this in Content Creators: Hobby, Side Hustle or Business?, episode 66 of the Aevum Accounting Podcast.

What counts as income

More than your bank balance. To the ATO, income isn't just what hits your bank account. It can include ad and platform payments, sponsorships and affiliate links, tips, donations and subscriptions, and free products, services or experiences you get in exchange for promotion.

How the ATO finds out. If fans tip or subscribe through a platform, the platform generally has to report those payments to the ATO (ATO: transactions reportable under the SERR). The ATO says it also finds undeclared income through data matching with platforms, its lifestyle assets program and tip-offs.

Three buckets: hobby, side hustle or business

Three possibilities. The ATO's guide says your content creation may be a business, an activity that earns you income without being a business, which is where a lot of side hustles land, or a genuine hobby (ATO: are you in the business of content creation?).

A genuine hobby. The ATO's example is someone posting dance videos now and then, for fun, for friends and family, with no plans to earn. A genuine hobby's takings generally aren't taxable, but you can't claim the costs either.

The middle bucket. In another example, a travel blogger who isn't in business takes a one-off $500 payment from a hotel to feature it. That $500 is still assessable income. Outside a genuine hobby, what you earn generally goes in your return and you can claim the eligible costs of earning it, but business registrations, like an ABN and GST, don't apply in the middle bucket.

When is it a business?

No single test. There's no magic dollar figure. The ATO weighs things like whether there's a commercial purpose, whether you're out to make a profit and realistically could, how regular and organised it is, and the size and scale, then goes on the overall impression. Signs include posting to a schedule, chasing brand deals, signing contracts, tracking your numbers, investing in gear, and having a team like an editor or talent manager.

Myths that don't hold. A small following or modest income doesn't automatically make it a hobby. A day job doesn't stop it being a business either: the ATO's own example is a mechanic whose how-to channel, run to a production schedule, is a business (ATO: are you in business?). You can be in business before you've turned a profit, as long as you've genuinely started and haven't just made plans, and enjoying it doesn't stop it being a business.

The javelin case. In 2005 the High Court found that a Queensland police officer's athletics was a business in the tax year in question, largely because sponsors were paying her to wear their gear and promote them. Swap the javelin for a camera and it's the same question.

When a hobby becomes a business

It can change. The draft ruling's example is a comedian whose video goes viral. He starts taking ad money, signs with a management company, upgrades his gear and hires an editor, and by then, in the ATO's view, he's in business. A gamer streaming for fun with the odd small donation has no realistic prospect of profit, but chasing ad revenue, selling merchandise and asking for donations can start to change that.

Reassess, don't assume. Starting to make money from a channel is when the ATO says you must reassess. It isn't an automatic switch. Even after you stop creating, the ad money your old videos keep earning is still assessable.

Freebies are income at market value

Free doesn't mean tax free. If you're gifted something because of your content, the ATO says it generally needs to be declared at its market value. In its example, a lifestyle creator who's in business is flown to a resort to make content for it, with no cash at all. With the flights at $8,000 and the accommodation and extras at $5,000, she'd generally need to include $13,000 as income, and any tax on it has to come from somewhere else. So write down what comes in, who sent it and what it's worth.

Deductions and losses

Apportion anything you use privately. If you're in business, you may be able to claim what you spend producing content, but anything you also use privately has to be apportioned. The ATO's example is makeup: used only in your tutorials, it's deductible, and if you use it in your own life too, you can claim some of the cost. The same goes for a phone.

Losses. If your channel is a business and costs more than it brings in, the loss only comes off your wages in the same year if you meet the non-commercial loss rules. Otherwise it's deferred and claimed in a later year. Our post on non-commercial losses goes through the tests.

ABN, GST and records

Registering. If your channel is a business, the ATO's guide says to register for an ABN. Once your turnover reaches $75,000 over 12 months, or is likely to, you have 21 days to register for GST (ATO: registering for GST). That's turnover, not profit, so it can creep up fast.

Where GST applies. Once you're registered, local brand deals and sponsorships generally carry GST, and you'll lodge business activity statements. Ad payments from overseas networks are generally GST free, but they still count towards the $75,000. And if the platform paying you is an Australian entity, the ATO's own example treats your sale to it as a taxable sale, so check who's actually paying you.

Records and instalments. Keep records of every business transaction for at least five years, and if you're worried about a big bill at the end of the year, the ATO's guide points to pay as you go instalments. The ATO's free course, Content, clicks, income and tax, takes about 45 minutes.

If you're not a client yet and you'd like someone to work out which bucket you're in, book a consultation with our team. Our small business accountants in Perth can help if it's a business. If you're already a client and your channel has started earning, bring it to your next catch-up and we'll go through it.

The information in this article is general in nature and does not take into account your personal circumstances. It does not constitute specific tax or financial advice. Everyone's situation is different, so we recommend speaking with a qualified professional at Aevum Accounting before acting on anything you have read here.