As part of your content creation activity, you may receive payments, benefits, products and items.
Whether you need to pay tax on what you get will depend on:
- how you receive them
- who provides them
- what you do with them.
For example you may receive payments and donations from viewers and products or benefits gifted to you by a brand.
Your payments or items will likely be considered income in 1 or both of these situations:
- they are received regularly,
- they are used to contribute towards your living expenses.
Content creators receiving payments, products and services
What payments, benefits, products and items you need to pay tax on
To work out whether a payment (including money, benefits, products and items) you have received is income and you need to pay tax on it, you need to consider:
- how often you are receiving payments
- the relationship you have with the person, or business paying you (for example whether it is a family member or a PR company giving you money)
- the reason you were given the payment.
Income from payments and donations
Where you monetise content and receive amounts from viewers these amounts will likely to be income. Small and irregular amounts are less likely to be income.
Income from payments and donations
Income from products or benefits
The products, services and benefits (non-monetary) you receive can also be taxable. Similar rules apply to income from payments and donations. However, non-monetary income would need to able to be converted into money (for example if you can sell it) to be taxable.
Emma enjoys posting the occasional photo on Facebook and Instagram.
Emma’s social media accounts include a link where people can make a monetary contribution to support their activity. Emma doesn’t expect to receive much, but it was easy to set up, so Emma thought why not?
Emma receives 5 one-off payments during the income year totalling $25. The only other income Emma derives in the income year is employment income.
It is likely Emma has expenses associated with taking photos (for example, travel costs and depreciation loss on their camera) that are greater than the income Emma derives. So, Emma is not likely to be making, or be intending to make, a profit that could help them to meet their living expenses, so the $25 is unlikely to be income for Emma.
Even if the $25 were income, because Emma receives less than $200 of 'income other than reportable income', Emma would not need to include the $25 on a tax return.
Liam is employed full-time as a high school music teacher. Liam also has a couple of side activities:
- Liam fills in for a local band a few times a year when they need a guitarist.
- Liam creates content for a YouTube music channel where they interview musicians over drinks.
The YouTube channel has been doing well, and Liam has recently become a YouTube partner. Liam has a collection of 20 10-minute videos in their channel that Liam has created over the last 2 years.
Liam intends to add to this content by adding a new video every couple of months. Liam receives a YouTube payment of approximately $130 every 3 to 4 months. Liam’s total income from the channel for the income year just ended is $480.
Although Liam has only earned income of $480, the amounts are received on a regular basis. The payments are also a product of the effort that Liam puts into creating videos. So, the payments are income. It does not matter that Liam also has a full-time job and that this is a secondary form of income or side-activity.
Liam also calculates allowable deductions for expenditure totalling $300, including entertainment expenditure (at the rate of 50%), which was sometimes needed to get their interviewees talking, and depreciation losses on a laptop and camera.
Liam must include the $480 of income received from their YouTube channel and the $600 they derived from gigs with the band during the year in their income tax return. Liam can claim the deductible expenditure at the same time.
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