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  • Income and deductions for providing services

    Income you earn from providing your services through a digital platform is assessable income and needs to be reported in your tax return.

    This applies even if this income is to supplement your income from a job or business activities. It does not matter whether you are carrying on a business or engaged as an employee or independent contractor. The money you earn from providing services of any kind for a fee needs to be declared in your tax return. You can claim deductions for expenses that directly relate to your services income.

    How you report your income and the deductions you can claim will depend on your relationship with the platform and other parties to the arrangement.

    You will need to keep records such as:

    • statements from platforms that show your income
    • receipts of any expenses you want to claim deductions for.

    On this page:

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    Lodging your return

    How you lodge your return will depend on your relationship with the platform and other parties to the arrangement.

    If you are in business

    If you're providing services as a business, you will need to include this income as business income in your tax return. The structure of your business will determine which return this income is reported in. When earning income for services as a business, you need to consider whether personal services income (PSI) applies to you.

    Income you earn mainly from your personal skills, efforts or expertise is classified as PSI. If the income is PSI, you will need to work out if special tax rules (the PSI rules) apply. If the PSI rules apply, they will affect how you report your income to us and the deductions you can claim.

    You can use the PSI tool to work out whether PSI was received and if the PSI rules apply.

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    If you are not in business

    If you're providing services through a digital platform and you're not in business, you need to include this income in your individual tax return. You can do this online through myTax or a registered tax agent.

    If you:

    • received a payment summary as an employee detailing your pay and any tax withheld, report this income under salary and wages and any deductions directly related to this income as work related expenses
    • earned income for your services through a digital platform not as an employee, report this income as Other income and any deductions directly related to this income as Other deductions – make sure to include the platform name as the description for both income and deductions.

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    Claiming deductions

    To claim a deduction related to the income you earn:

    • you must have spent the money yourself and have not been reimbursed
    • it must relate directly to the income earned from providing your services
    • you must have records to prove it.

    You may have expenses that relate to both private and income-producing use. If this is the case, you can only claim the portion related to the income-producing use. You may be able to claim service fees or commission charged by a digital platform as a 100% deduction.

    Some common examples of expenses from offering your services include:

    • travel expenses
    • repairs, maintenance and replacement of assets
    • home office expenses.

    If you're registered for GST and claimed GST credits on your expenses, you can only claim the remaining amount (expense minus the GST) as a tax deduction.

    If your income is PSI, the deductions you can claim may be limited.

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    Offsetting business losses

    When carrying on a business, there are restrictions on your ability to use a yearly loss from your business against other income. If you have deductions greater than your income for a tax year, you will need to consider the non-commercial loss rules.

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    Last modified: 12 Jun 2019QC 59298