As the financial year draws to a close, the Australian Taxation Office (ATO) is intensifying its focus on side hustles and undeclared income, with even micro-influencers and digital creatives finding themselves in the crosshairs of tax compliance enforcement.
According to Lauren Cassimatis, Criminal defence lawyer, Accredited Specialist in Criminal Law, and the Founder and Principal of Gallant Law, many content creators are unknowingly operating businesses without proper tax compliance.
“This end-of-financial-year, the Australian Taxation Office (ATO) is cracking down on side hustles and undeclared income. And even micro-influencers and digital creatives are at risk,” Cassimatis warns.
She illustrates the situation with a common scenario: “Say you’ve found a niche on the internet. You post videos about your dog, and you’ve gained a following of a few thousand on Instagram – not many in the grand scheme of things. But they’re loyal and engaged. You post a few times a week. It’s something you do in addition to your full-time job – (1) because you love your dog and think they’re the best, (2) because you like the creative outlet of making funny or cute videos, and (3) there’s a wholesome community of other people who now admire your dog.”
The legal expert explains how quickly innocent content creation can evolve into taxable business activity: “Next thing you know, a pet food company reaches out to say they’d love to send you FREE treats and snacks. You accept – your dog loves treats. You post about your dog doing tricks for these treats – and there’s even a discount code for your followers. How generous!”
However, Cassimatis cautions that accepting multiple brand partnerships creates tax obligations: “Now, you’re receiving more messages from brands. A company wants to send you a dog bed. Another wants to send you doggy jumpers. Another, a personalised leash. Next, a doggy spa session. Accepting each of these, you may have inadvertently started a business. With regularity and repetition, you’ve gained non-cash income through barter transactions – even if they’re for your dog. And you’ll need to declare this income to the ATO in your tax return this year.”
Intent doesn’t matter under tax law
Many influencers assume their lack of business intent protects them from tax obligations, but Cassimatis clarifies this misconception: “‘But they’re gifts!’ you say. ‘I had no intention of starting a business.’ Unfortunately, the law is clear on intent – that it is objective. Even if you say you had no intention, the ATO can infer that you received goods or services in exchange for your promotion, not just because these brands liked you or your dog. They were ‘gifts’ in service of the brands’ commercial intent, making them reasonably seen as a barter transaction.”
She emphasizes the commercial reality of social media partnerships: “With more and more brands using social media as a tool to market their goods and services, the line between creative outlet and business can feel blurred if you’re not familiar with business tax obligations. Where promotion or visibility can be earned through social media posts, there is inherent commercial intent for brands and companies, especially those who create ‘user-generated content’ online or receive income from affiliate links. It’s a marketing exercise.”
All gifts must be declared
The tax obligations extend beyond formal partnerships, according to Cassimatis: “So, if you’re receiving gifts or services in exchange for promotion or because of your profile, you need to be tracking their market value to disclose in your tax return.
Even if they’re unsolicited products! That’s considered assessable income. And in my experience, the ATO does not discriminate based on the amount of income as long as you are earning more than $18,200 a year across all income streams.”
Serious consequences for non-compliance
Drawing from her legal experience, Cassimatis warns of severe penalties: “I’ve seen influencers face ATO audits, retrospective tax bills, director penalties, fines for underreporting, interest penalties for missed payments and even prosecution in the criminal jurisdiction. In Australia, tax evasion (the deliberate and deceptive act of misrepresenting financial information to reduce or avoid paying tax) and related fraud offences are prosecuted under the Criminal Code Act 1995 (Cth) and the Taxation Administration Act 1953 (Cth).”
She shares a cautionary case study: “I had a client who was a uni student-turned-influencer who did not comply with their tax obligations and was prosecuted by the ATO. They were receiving clothes and jewellery from brands, not keeping accurate records and had begun to claim personal expenses like dinners, make-up and hairstyling as business expenses. The ATO audited them and they were charged with not declaring income, disguising expenses intended for personal benefit as business expenses and keeping false records.”
The legal consequences can be substantial: “They ended up receiving a good behaviour bond, but penalties for non-compliance can include fines, repayment orders of tax owed plus interest, community service orders, or good behaviour bonds. Where amounts exceed $100,000, in more serious criminal cases of deception and non-compliance, you could be sentenced to a term of imprisonment.”
Essential steps for compliance
For content creators concerned about their tax obligations, Cassimatis provides clear guidance: “Before the end of the financial year and certainly, before you file your tax return, take stock of the products or services you have been gifted or received in-kind as well as any communicated brand deals. Note the market value of goods and services received. If you don’t already have an ABN (Australian Business Number), get one. You can use it across different business activities if you ever decide to pick up other ‘side hustles’.”
Professional advice is crucial, she emphasizes: “Next, you should seek the independent advice of an accountant or tax agent. Tax law is complex and nuanced, and to complicate things further, in Australia, we have not one, but two Acts relating to income tax. Seeking advice for your tax means you will have expert guidance to ensure you are compliant, and they could even help you claim deductions you didn’t know you could (not dinners or make-up). Treat your creative practice with the same diligence you would any professional endeavour. The cost of non-compliance far outweighs the time and effort involved in getting it right.”
Broader crackdown on digital economy
Cassimatis places the influencer focus within a larger enforcement strategy: “And here’s the bigger picture: the ATO’s focus on side hustles isn’t just about influencers, it’s part of a broader shift toward cracking down on the shadow economy. Whether you’re monetising a podcast, flipping sneakers online, or creating content on TikTok, any activity that generates value – cash or kind – may be treated as a business in the eyes of the ATO. With data-matching programs expanding and digital platforms under increased scrutiny, your online footprint is more visible than ever. That means income from affiliate codes, gifted products, sponsored posts, even free services like haircuts or event tickets offered in exchange for publicity all count. It’s no longer safe to assume that ‘small’ means ‘invisible.'”
Her final advice is urgent: “In short, if you’re doing anything online that could be seen as promotional or income-generating, even casually, you need to treat it as a business and get your financial house in order. Don’t wait for an audit to take it seriously. The EOFY is the time to pause, assess, and set up proper record-keeping systems. Because while your side hustle may have started with a cute dog video or a viral moment, the tax obligations that follow are very real.”
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