Having a full-time job and earning extra income through a gig platform on the side is one of the most common financial arrangements in Australia. Whether you drive for Uber on weekends, deliver for DoorDash after work, pick up Amazon Flex shifts during school holidays, or freelance through Airtasker, the extra income is welcome but it comes with tax obligations that most people with a regular salary have never had to think about.
Unlike your employment income, no tax is withheld from your side hustle earnings. You receive the full amount, and it is your responsibility to declare it, manage your obligations, and pay any tax owing at the end of the financial year. Done correctly, this is entirely manageable and with the right deductions, your actual tax bill is often much lower than people expect.
This guide explains exactly how side hustle tax works in Australia when you also have a full-time job, what to declare, which deductions to claim, how the two income sources interact, and what you need to do before 31 October.
How Australian Tax Works When You Have Two Income Sources
Australia uses a progressive tax system. The more you earn overall, the higher the rate you pay on the top portion of your income. When you have both PAYG employment income and side hustle income, the two are combined to determine your total taxable income for the year.
Your employer already withholds tax from your salary throughout the year via the PAYG withholding system. However, your employer only withholds based on your salary, they have no visibility of your side hustle income. That means by the time you lodge your tax return, your combined income may push you into a higher tax bracket, and you may owe additional tax beyond what your employer has already withheld.
The good news is that your legitimate side hustle deductions reduce your taxable gig income and because those deductions are applied against your higher combined marginal tax rate, each dollar of deduction is worth more to you than it would be to someone with no other income.
A Practical Example
Imagine you earn $75,000 per year from your full-time job and $20,000 from Uber Eats deliveries on weekends and evenings.
Your employer withheld tax based on $75,000, approximately $16,342. But your total income is $95,000, and the tax on that (before deductions) is approximately $22,592. That means you could owe around $6,250 in additional tax when you lodge before any deductions.
Now apply $7,000 in legitimate delivery deductions (vehicle costs, phone, equipment, platform fees, tolls). Your taxable gig income drops from $20,000 to $13,000, and your combined taxable income becomes $88,000. Your tax drops to around $19,417 saving you approximately $3,175 compared to claiming no deductions at all.
This is why tracking and claiming every legitimate deduction is especially important for side hustle workers; the savings are applied at your marginal tax rate, which is higher precisely because you have a second income.
Do You Need an ABN for Your Side Hustle?
Yes. If you earn income through any gig platform Uber, Uber Eats, DoorDash, Amazon Flex, Deliveroo, DiDi, Airtasker, or any other you are operating as an independent contractor. The ATO requires all independent contractors and sole traders in Australia to hold an ABN.
Your employment status, full-time, part-time, or casual, does not affect this requirement. If you earn ABN income, you need an ABN. Applying is free and takes around 10 minutes at the Australian Business Register.
For a complete walkthrough of registration, see Gig Worker ABN & GST Registration Guide for Gig Workers (Australia).
Do You Need to Register for GST?
This depends on the type of side hustle you do.
Rideshare Side Hustle (Uber, DiDi, Ola)
If your side hustle involves carrying passengers for a fare, you must register for GST regardless of how much you earn. The standard $75,000 GST threshold does not apply to ride-sourcing services. The ATO's ride-sourcing rules require GST registration from the first dollar of rideshare income even if you only drive one Saturday per month.
Once registered, you must lodge a quarterly Business Activity Statement (BAS) and remit 1/11th of your gross fares to the ATO as GST.
Delivery or Freelance Side Hustle
If your side hustle is food delivery (Uber Eats, DoorDash, Deliveroo) or freelance work (Airtasker, Upwork), you only need to register for GST if your total annual ABN income exceeds $75,000. See the ATO's GST registration threshold information.
For most part-time side hustlers, the $75,000 delivery threshold will not be reached. However, all ABN income from all sources counts together so if you freelance and deliver, the combined total is what matters.
How Your Side Hustle Income and Salary Are Combined at Tax Time
When you lodge your annual tax return through myTax or with a registered tax agent, both income sources are included in the same return:
Your employment income (pre-filled from your employer's Single Touch Payroll reporting)
Your gig income (entered manually as business income in the Business Schedule)
Your net gig profit, total gig income minus your deductions, is added to your employment income to produce your total taxable income. Tax is then calculated on the combined figure, and the PAYG already withheld by your employer is credited against what you owe. If there is a shortfall, you pay the difference. If deductions bring your combined income down enough, you may receive a refund.
The self-lodgement deadline is 31 October each year, covering the financial year ended 30 June. For a full calendar of tax dates, see ATO Deadlines Calendar for Gig Workers.
What Tax Deductions Can Side Hustle Workers Claim?
As an independent contractor, you can claim deductions for all expenses directly related to earning your side hustle income. These deductions are separate from any work-related deductions you already claim against your employment income.
Vehicle Expenses
If you use your car for your side hustle making deliveries, driving rideshare passengers, or travelling to client locations you can claim either:
The cents-per-kilometre method: Up to 5,000 kilometres per year at 88 cents per km (2024-25 and 2025-26 rate) = maximum $4,400. No logbook required.
The logbook method: Claim your actual vehicle costs (fuel, registration, insurance, depreciation, servicing) multiplied by your work-use percentage. Requires a 12-week logbook. Higher deduction for frequent side hustle drivers.
For a detailed breakdown of how vehicle depreciation works, see Car Depreciation Guide for Rideshare Drivers in Australia. For the full list of vehicle and other deductions, see Uber Driver Tax Deductions List (Australia).
Phone and Data
The work-related portion of your mobile plan, data, and handset is deductible. Keep a four-week usage diary and apply your work-use percentage to your annual plan cost. For a detailed guide, see Phone & Data Tax Deductions for Gig Workers in Australia.
Equipment and Accessories
Deductible items include insulated delivery bags, phone mounts, dashcams, safety vests, bicycle equipment (if you deliver by bike), and any other tools used specifically for your side hustle. Items under $300 can be claimed immediately. Items over $300 must be depreciated.
Platform Fees and Commissions
Service fees and commissions deducted by your platform from your earnings are a deductible business expense.
Tolls and Parking
Tolls paid during active work shifts and parking fees incurred while completing deliveries or jobs are deductible. Retain your toll account records and bank statements as substantiation.
Income Protection Insurance
If you hold income protection insurance as a self-employed contractor, the premiums are deductible. See the ATO's income protection insurance guidance.
Accounting and Bookkeeping Costs
The cost of any tools or services used to manage your side hustle finances including the Accounting Samurai P&L Generator is deductible. Tax agent fees are deductible in the year after you pay them.
Should You Ask Your Employer to Withhold Extra Tax?
Yes, this is one of the most practical steps a side hustle worker can take. The ATO allows you to request that your employer withhold additional PAYG tax from your salary via a Withholding Variation Application (NAT 2036).
For example, if you estimate your net side hustle income will be $15,000 for the year, and your marginal tax rate is 32.5%, you could ask your employer to withhold an extra $4,875 over the year, approximately $94 per week. When you lodge your return, that amount has already been paid and you avoid a large lump-sum bill in October or November.
Alternatively, set aside 25–30% of each side hustle payment in a separate savings account throughout the year.
How to Generate a Profit & Loss Statement for Your Side Hustle
A Profit & Loss (P&L) statement is the document that brings your side hustle income and expenses together in a single professional report. It shows your total income, your deductible expenses, and your net profit which is the figure that goes into your tax return as business income.
A P&L is also the primary document that lenders, mortgage brokers, and landlords request when a self-employed applicant needs to prove their income. Even if your side hustle is secondary, having a clean P&L that covers 12–24 months of activity significantly strengthens a loan or rental application.
The Accounting Samurai P&L Generator generates your statement automatically from your bank and card statements, no manual data entry, no accountant required. Upload your statements, review the AI-categorised income and expenses, and download a formatted P&L in minutes.
For more on why every gig worker needs one, see Why Every Delivery Driver Needs a Profit and Loss Statement (With Examples) and Profit & Loss Statements for Gig Workers: What They Are and Why They Matter.
What If Your Side Hustle Makes a Loss?
If your deductible expenses exceed your side hustle income in a given year, you make a business loss. In some circumstances you can offset this against your employment income, but the ATO's non-commercial loss rules limit when this is permitted.
For most gig workers with a full-time job, losses from the side hustle cannot automatically be applied against employment income. The loss is deferred and carried forward to offset future profits from the same business activity. If you are in a loss position, a registered tax agent can advise on your specific situation.
Common Tax Mistakes Side Hustle Workers Make
Not declaring all platform income, the ATO receives data from every major gig platform under the sharing economy reporting regime.
Claiming 100% of vehicle costs without a logbook
Not registering for GST when doing rideshare driving
Missing deductions such as phone costs, equipment, and platform fees
Not setting aside enough money during the year to cover the tax bill
Missing the 31 October lodgement deadline, triggering Failure to Lodge penalties
For a full breakdown of mistakes and how to fix them, see Common Gig Worker Tax Mistakes in Australia and How to Fix Them.
Should You Use a Tax Agent or Lodge Yourself?
Self-lodgement through myTax is manageable if you have a one side hustle platform, straightforward expenses, use the cents-per-kilometre method, and have a clean P&L statement ready. A registered tax agent adds value when you have vehicle logbook claims, GST and BAS obligations from rideshare, multiple platforms, or a high combined income.
For a detailed comparison, see Tax Agent vs DIY: What Should Australian Gig Workers Do at Tax Time?.
What Happens If You Don't Declare Your Side Hustle Income?
The ATO receives income data from every major gig platform under its sharing economy reporting regime. If your declared income does not match what the platform reported, the ATO's data-matching systems flag the discrepancy. Consequences include amended assessments, interest charges, and shortfall penalties ranging from 25% to 75% of the underpaid tax.
Voluntary disclosure before the ATO contacts you results in significantly lower penalties. For the full explanation, see What Happens If a Gig Worker Doesn't Lodge a Tax Return with the ATO?.
Bookkeeping Tips for Side Hustle Workers
Download your platform earnings summary monthly and save it in a dedicated folder
Keep a separate bank account or card for side hustle expenses to make categorisation easier
Take photos of receipts immediately and file them digitally
Keep your toll account records and phone bills accessible
Generate your P&L statement at the end of each financial year using the Accounting Samurai P&L Generator.
For more practical tips, see Simple Bookkeeping Tips for Uber and Delivery Drivers (No Accountant Needed) and Best Bookkeeping Apps for Uber Drivers (2026 Guide).
Frequently Asked Questions
Do I Need to Tell My Employer About My Side Hustle?
No. You are not legally required to disclose your side hustle income to your employer. It is entirely your private business. The only obligation is to declare it to the ATO in your annual tax return.
How Much Tax Will I Pay on My Side Hustle Income?
Your side hustle net profit is taxed at your marginal tax rate. If your employment income is $80,000, your marginal rate on the next dollar is 32.5%. If your combined income exceeds $120,000, the rate rises to 37%. Check your rate using the ATO's individual income tax rates. You can also estimate your bill with the Accounting Samurai Tax Calculator.
Can I Claim Deductions from Both My Employment and My Side Hustle?
Yes, but they are claimed separately. Work-related deductions against your employment income are separate from your side hustle business deductions. Both reduce your overall taxable income, but they are entered in different sections of your tax return.
What Is the Tax Deadline for Side Hustle Workers?
The self-lodgement deadline is 31 October. If you use a registered tax agent, you may be eligible for an extended deadline — typically to May of the following year. See the full calendar at ATO Deadlines Calendar for Gig Workers.
I Started My Side Hustle Halfway Through the Year. Do I Still Need to Lodge?
Yes. Any ABN income earned during the financial year must be declared in that year's tax return, regardless of when during the year you started.
Related Reading
Gig Worker ABN & GST Registration Guide for Gig Workers (Australia)
Car Depreciation Guide for Rideshare Drivers in Australia
Uber Driver Tax Deductions List (Australia)
Phone & Data Tax Deductions for Gig Workers in Australia
Why Every Delivery Driver Needs a Profit and Loss Statement (With Examples)
Profit & Loss Statements for Gig Workers: What They Are and Why They Matter
Proof of Income for Uber Drivers: What Documents Work Best
How Uber Drivers Can Prove Income for Loans, Rentals, and Mortgages
Tax Agent vs DIY: What Should Australian Gig Workers Do at Tax Time?
Common Gig Worker Tax Mistakes in Australia and How to Fix Them
What Happens If a Gig Worker Doesn't Lodge a Tax Return with the ATO?
ATO Deadlines Calendar for Gig Workers
Simple Bookkeeping Tips for Uber and Delivery Drivers (No Accountant Needed)
Best Bookkeeping Apps for Uber Drivers (2026 Guide)
Rideshare Driver Tax Preparation: Step-by-Step Guide for Uber & DiDi Drivers
How DoorDash Drivers Can Generate a Profit & Loss Statement for Tax Time
Amazon Flex Earnings Statement: How Drivers Can Show Real Income with a Profit & Loss Statement
