The quick answer
There is no single test and no set dollar figure. The ATO looks at how you operate, not only how much you sell.
If it’s a business, what you earn goes in your tax return, and you need records to back it up.
A genuine hobby is treated differently. But calling it a hobby doesn’t make it one.
The harder part: knowing which side of the line you are on, and when you crossed it.
There is no single test. That’s the hard part.
The ATO doesn’t use a sales figure to decide whether you are in business. It asks a set of questions about how you operate: whether you intend to make a profit, whether you sell again and again, and whether you go about it in a business-like way.
The more of those you answer yes to, the more likely it is a business. And even selling once doesn’t rule it out:
“A one-off transaction can also be a business”Australian Taxation Office, Are you in business?
So “I only sell a few things” isn’t an answer on its own. What matters is the whole picture.
Two sellers, same sales, different answers
Two people sell about the same amount online in a year. For one it’s a hobby. For the other it’s a business, with income to declare.
The difference isn’t the amount. It comes down to why each one sells, how often, and how they go about it.
Six questions that decide which one you are
QUESTION 1
Are you trying to make a profit?
Buying things to resell is very different from clearing out the garage.
QUESTION 2
Do you keep doing it?
Regular, repeated sales point one way. But a one-off can still count.
QUESTION 3
Does it look like a business?
A store name, ads, a separate bank account or an ABN all add to the picture.
QUESTION 4
When did it change?
Plenty of businesses start as hobbies. The date it changed matters for your tax.
QUESTION 5
Do you need an ABN?
You can’t have one for a hobby, yet marketplaces and suppliers may ask for it.
QUESTION 6
What if you make a loss?
A business loss can’t always be used the way sellers expect.
There is no single answer to any of these. Each one depends on your own situation. Working them out is what we do every day.
What getting it wrong can cost
Income that should have been declared, found later. The ATO collects data on sellers from online marketplaces and matches it against tax returns.
Penalties and interest on tax that wasn’t paid when it was due.
Expenses you never claimed, because you didn’t treat it as a business when it was one.
Registering late. An ABN, and GST once your turnover reaches $75,000.
Does this sound like you?
I started selling a few things and it grew.
I buy stock to resell.
I sell on a marketplace, on social media or through my own store.
I’ve never put my online sales in my tax return.
I don’t have an ABN.
I’m not sure when it stopped being a hobby.
I’d rather be selling than doing paperwork.
If even one of these is you, it’s worth a quick conversation. Sorting it out early is almost always easier than fixing it after the ATO gets in touch.
Common questions
Is there an amount I can earn before it counts?
No. There is no set dollar amount that makes something a hobby or a business. It depends on how you operate.
I’ve been selling for a while and never declared it. What now?
It can be fixed, and it’s better to come forward than to wait. Tell us what you’ve been selling and we’ll tell you where you stand.
Do I need an ABN to sell online?
If you are in business, you can register for one and you will usually need it. If it’s a genuine hobby, you aren’t entitled to one. We work out which applies to you.
How much does it cost?
It depends on your situation, so we give you the fee before any work starts. Asking for a quote costs nothing.
