Hobby or business?



This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

It is important to determine whether you are carrying on a business or pursuing a hobby, sport or recreational activity that does not produce income.

In general, you are considered to carry on a business if the activity:

  • has started
  • has a significant commercial purpose or character
  • has a purpose of profit as well as a prospect of profit
  • is carried out in a manner that is characteristic of the industry
  • is repeated, regular or continuous
  • cannot be more accurately described as a hobby, recreation or sporting activity.

For more information, see Working out if you are operating a business in Tax basics for small business (NAT 1908). If you are a primary producer, see Taxation Ruling TR 97/11 - Income tax: am I carrying on a business of primary production?

Last modified: 25 Oct 2011QC 27987