If you monetise your content, the amounts that you receive from your viewers will likely be income. Payments you receive through online payment or donation platforms can also be income, even if they are described as a gift or donation.
In most cases, a payment a viewer makes to you will be considered income. These payments will normally occur because you:
- use a platform that supports payments, for example YouTube or Twitch
- have included a link to a payment platform (for example Patreon) in the description of your post and the payer has viewed the content and used the link to make a payment.
The labels 'gift' or 'donation' do not determine whether a payment is income. For example, a viewer made a payment with the comment that it is because they respect and admire you. This is unlikely to affect whether the payment is income. When deciding, ask yourself if you would have received money from the same person had it not been for the content you created?
In some cases, you may decide that a payment you’ve received is not income from your activity. For example, you might receive a payment from a friend or family member who simply wants to support you. Please note, it is up to you to prove the payment is not related to content creation should we ask.
When content creators need to pay tax on payments, products and services
Bella is an online woodworker who carries on an online content-creation business posting videos of her woodworking projects. Bella includes a link to her Patreon account in the description of her videos and on her website.
People who make payments of over $10 a month are entitled to early access to Bella’s latest videos. During the income year she receives $3,600 from people who paid over $10 a week and $1,040 from smaller payments. Bella’s grandmother wants to support Bella and makes a one-off payment of $200 directly to her. Bella’s grandmother does not have an interest in woodworking, but she watched some of the videos as she were interested in what her granddaughter was up to.
Bella is unsure whether all the payments she receives through her Patreon account and from her grandmother are income.
All the payments, except the payment from Bella’s grandmother, are income. The payment from Bella’s grandmother is not income because it was made because of a private family relationship and not as a product of Bella’s business.
The other payments are received because of her online woodworking video business. This is supported by:
- the link included in her videos to her Patreon account
- the payments having been made by people whose only connection to Bella is that they have watched her videos.