Side Hustle or Hobby? When You Pay Tax on Depop, Airtasker & Marketplace Income
Selling on Depop or picking up Airtasker jobs? How the ATO decides whether your side hustle is a tax-free hobby or a taxable business — and what the Sharing Economy Reporting Regime means for 2025–26.
With the cost of living biting, thousands of Australians have picked up a side hustle — selling vintage clothes on Depop, doing weekend jobs on Airtasker, delivering for UberEats, or running a market stall. If that is you, there is one thing worth understanding before you lodge: does the ATO treat what you are doing as a hobby or a business? The two are taxed very differently — and the line between them is not a dollar amount.
There is no “side hustle” exemption
A common belief is that if you only make a small amount, it is automatically tax-free. That is not how it works. Australia's tax system has no set dollar threshold below which side income is ignored, and the ATO does not treat “side hustle” as its own category. For tax purposes your activity is either a hobby or a business — and that is decided by looking at the whole picture of what you are doing, not by how much you made. So the real question is not “did I earn under some magic number?” It is “am I carrying on a business?”
Signs it is a hobby
No single factor decides it, but an activity leans towards being a hobby when:
- You are selling your own personal items: clearing out your wardrobe on Depop — selling clothes you originally bought to wear yourself — is generally not assessable income. You bought them to use, not to trade.
- There is no profit-making intention: you do it for enjoyment, or just to recover some of the cost of a personal interest, rather than to make money.
- It is occasional and unstructured: you do it sporadically, with no ABN, no business name, no separate bank account, and no real system behind it.
If your activity is genuinely a hobby, you do not declare the income — but the trade-off is that you also cannot claim any of the costs as deductions.
Signs it is a business
The activity leans towards being a business when:
- You are buying to resell: this is the big one. Sourcing items — hitting op-shops or wholesalers to buy stock specifically to flip online for a profit — is a strong indicator you are in business, not clearing out your closet.
- It is repeated and continuous: regularly picking up Airtasker jobs every weekend, or making consistent sales, points to a business rather than a one-off.
- You operate commercially: you price to make a profit, you advertise or market, you keep records, or you have registered an ABN or business name.
The ATO weighs these factors together — you do not need to tick every box. It is about the overall character of the activity. If it looks and runs like a business, it is likely to be treated as one, even if it is small and part-time.
What changed: the ATO can now see it
The reason this matters in 2025–26 is the Sharing Economy Reporting Regime (SERR). Under it, digital platforms are legally required to report the income their users earn directly to the ATO. It started with ride-share and accommodation platforms and has expanded to cover a much broader range — food delivery, task and gig platforms, online marketplaces, and content platforms. In practice, income you earn through these platforms may already be visible to the ATO and can be matched against what you report. “Under the radar” is a much smaller space than it used to be.
Being classified as a business is not all downside. Once you are carrying on a business, you can claim the expenses that go with earning that income — platform and selling fees, postage and packaging, supplies and materials, and the work-related portion of costs like your phone or home office. Those deductions reduce the income you are taxed on, so declaring properly and claiming what you are entitled to often softens the blow considerably.
One more thing: the $75,000 GST line
If your side hustle grows to the point where your turnover reaches $75,000 in a 12-month period, a separate obligation kicks in: you generally need to register for GST. That is the same threshold that applies to any business, and it is worth keeping an eye on if your side income is climbing.
Bottom line
The hobby-versus-business question comes down to the whole picture — your intention, how often you do it, whether you are sourcing to sell, and how commercially you run it — not a single dollar figure. If you are genuinely selling off your own belongings now and then, that is usually a hobby. If you are buying to flip, doing it regularly, and running it to make money, it is likely a business you need to declare — and one where you can claim your costs.
Not sure which side of the line you are on? Ask Taxplain about your side-hustle income and deductions — you'll get a plain-English answer based on public ATO guidance, in seconds.
Frequently Asked Questions
Do I have to pay tax on my Depop or eBay sales?
It depends on whether you are running a hobby or a business. Selling off your own personal used items — like clearing out your wardrobe — is generally not taxable income. But if you are buying items specifically to resell them for a profit, or selling regularly and commercially, that is likely a business and the income must be declared. There is no fixed dollar amount that makes it tax-free; it comes down to the overall nature of the activity.
How does the ATO decide if my side hustle is a business?
The ATO looks at the whole picture rather than a single test: whether you intend to make a profit, whether you repeat the activity regularly, whether you buy stock to resell, and whether you operate commercially (pricing for profit, advertising, keeping records, holding an ABN). No single factor is decisive — it is the overall character of the activity that matters.
Is a small amount of side hustle income tax-free?
Not automatically. Australia has no dollar threshold below which side income is exempt. If your activity amounts to carrying on a business, the income is assessable regardless of how small it is. If it is a genuine hobby, the income is not declared — but you also cannot claim any expenses against it.
What is the Sharing Economy Reporting Regime (SERR)?
The SERR requires digital platforms to report the income their users earn directly to the ATO. It began with ride-share and short-stay accommodation platforms and has expanded to cover food delivery, task and gig platforms, online marketplaces, and content platforms. It means income earned through these platforms may already be visible to the ATO and can be matched against your tax return.
Can I claim deductions on my side hustle?
Only if your activity is a business, not a hobby. If you are carrying on a business, you can claim the expenses of earning that income — platform and selling fees, postage, supplies, and the work-related portion of costs like your phone or home office. If your activity is a hobby, you do not declare the income and cannot claim any expenses.