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Edited version of your private ruling
Authorisation Number: 1012492235453
Ruling
Subject: Babysitting payments
Question
Are the payments received from babysitting assessable income?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts
You babysit children.
The parents of the children are friends.
You receive an hourly payment for your services which is an agreed amount. You also charge this amount when you babysit any other children. .
You do not have any relevant qualifications.
You babysit a few hours each week.
You travel by car to the children's house. You are not paid for this travel or other expenses.
Your duties include feeding the children, watching some TV, reading with the children and putting the children to sleep.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5.
Detailed reasoning
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.
Ordinary income has generally been held to include three categories, namely, income form rendering personal services, income from property and income from carrying on a business.
Other characteristics of income that have evolved from case law include receipts that::
· are earned,
· are expected,
· are relied upon, and
· have an element of periodicity, recurrence or regularity.
The money received from your babysitting have the above characteristics and is regarded as ordinary income. You receive money for your babysitting services. The arrangement is more than a private and domestic arrangement.
Therefore, the money received is assessable under section 6-5 of the ITAA 1997.