ATO Cracks Down on Side Hustles: What You Need to Know for 2025
If you’ve got a side hustle, whether it’s online sales, gig work, freelancing, or content creation, the ATO is paying attention. In fact, starting from the 2025 financial year, side hustle income is no longer just “self-declared”, it’s being reported directly to the ATO.
What’s Changed?
Previously, side hustle income relied on the honour system, where individuals were responsible for reporting it accurately in their tax return. But from 1 July 2024, new laws under the Sharing Economy Reporting Regime (SERR) mean that digital platforms like Uber, Airtasker, Airbnb, Etsy, and OnlyFans are required to report your income directly to the ATO. That means they already know what you've earned and they'll be checking it against what you lodge.
What Does This Mean for You?
If you're earning money outside your regular job, even just occasionally, it must be declared as taxable income. The ATO is using data matching to catch underreporting, so it's more important to get it right.
● All side hustle income must be reported in your tax return.
● Mismatches between ATO records and what you lodge may trigger a review or audit
● If your side hustle grows, you may need to register for an ABN and consider GST if you earn over $75,000.
Can You Claim Any Expenses?
Yes, gig workers and side hustlers may be entitled to claim work-related expenses, but only if:
● The expenses are directly related to the income you earned
● You paid for them yourself and weren’t reimbursed
● You have records or receipts to prove the purchase
Common deductible expenses include:
● Work-from-home costs
● Motor vehicle expenses for business-related travel
● Travel costs such as parking, tolls, or accommodation for work purposes
● Tools and equipment used directly in earning income
Remember: if you’re mixing personal and business use, only the business-use portion can be claimed.
What Are the Tax Implications?
Any income you earn from a side hustle is treated just like your regular income. It’s added to your total earnings and taxed at your marginal tax rate. If you haven’t been setting aside money for tax throughout the year, you could be hit with an unexpected tax bill at lodgment time. On top of that, if you fail to report all of your income, the ATO may apply interest charges and penalties, especially now that they have direct access to your earnings through platform reporting. Accurate reporting and good recordkeeping are essential to avoid costly surprises.
If you're unsure whether your side hustle income needs to be reported, what expenses you can claim, or how to stay compliant under the new rules, reach out to us. We're here to help you understand your obligations, maximise your deductions, and avoid any tax time headaches