Australian Taxation Office announces crackdown on social media influencers’ income, including their perks
The tax office has declared social media influencers must be treated like a business — and declare perks beyond just the money they make.
Social media influencers are facing a tax office crackdown for the first time with gifts and sponsorships to be counted as income.
The Australian Taxation Office’s assistant commissioner Anita Challen said content creators who made videos for their legions of followers on Instagram and TikTok needed to consider themselves to be running a business.
“If you’re creating content and getting paid, whether in cash, products or experiences, you’re probably in business for tax purposes,’ Ms Challen said.
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By continuing you agree to our Terms and Privacy Policy.“We see creators grow audiences fast, but their record keeping and tax understanding doesn’t always keep up. That’s what we’re trying to change.
“Free doesn’t mean tax‑free. If it’s part of how you earn, it needs to be recorded.”
That change would mean getting an Australian business number and registering to pay the GST if they earned more than $75,000 a year.
This could also include submitting a quarterly business activity statement.
“Depending on your circumstances, it can also mean getting across new obligations, such as registering for GST if you meet certain criteria,” Ms Challen said.
The tax office said income beyond bank funds would include advertising and platform payments, sponsorships, tips, donations and subscriptions and free products, services or experiences received in exchange for promotion.
CPA Australia’s tax lead Jenny Wong, speaking on behalf of Certified Practising Accountants, said the line between side hustle and businesses was becoming blurry and advised content creators to declare gifts in their tax return.
“This is the first time the ATO has clearly defined how an individual can tell a hobby from a business,” she told The Nightly.
“The tax system needs to keep pace with the way people actually earn income today.
“The challenge for content creators and influencers is that the line between a hobby, a side hustle and a business can move surprisingly quickly.
“Someone might start posting content for enjoyment and later find themselves receiving advertising revenue, sponsorships or other commercial opportunities. That is the point at which they need to stop and consider the tax consequences.”
Taylor Reilly, a content creator who talent manages popular social media identities, prankster Adam Milardovic and foodie Thomas Sharpe, said he was disappointed the Australian Government was focused more on compliance than encouraging more online entrepreneurs.
“Creators should declare their income like any other business, no argument there,” he told The Nightly.
“We help our talent fund accountants and bookkeepers who know the creator space.
“My frustration is that the government conversation about the creator economy here is mostly about compliance, not growth.”
Mr Reilly said Australian content creators typically made far less than those making a living from it in the United States.
“Working across Australia and the US, I see how huge the gap is,” he said.
“In my experience, Australian creators are paid significantly less than the US and European creators for the same work, and platform revenue here is already light.
“That’s why so many talented creators struggle to make it a full-time living.”
He described the notion of content creators getting lots of freebies as a myth.
“In my experience, most brands in Australia aren’t handing creators thousands of dollars in freebies,” Mr Reilly said.
“Usually it’s a PR loan that goes back after the shoot.”
