The escalating cost of living in Australia has triggered a significant shift in the way we perceive and manage income. More and more Australians are now acknowledging the need to diversify their income streams as a strategic response to the uncertainties of the economy.
The side hustle boom
A popular way to boost your income is by engaging in a secondary job alongside your primary source of earnings. According to data from the Australian Bureau of Statistics, nearly 950,000 Aussies are currently working multiple jobs. This surge in secondary employment is reflective of a growing awareness among Australians of the importance of financial security, coupled with the increasing ease of starting a side hustle.
If you have transferable skills acquired through your primary employment such as a specialised trade or consulting expertise, a side hustle could be a smart way to create a new income stream. The gig economy has also opened up possibilities such as Uber driving or delivery services, and technical advancements have made it easier than ever to create e-commerce stores or sell services online.
The benefits of multiple income streams
Having a second income stream adds an additional layer of financial security, acting as a buffer against unexpected financial shocks. Whether you’re saving for a major life event, creating an emergency fund, or simply aiming to enhance your overall financial well-being, a side hustle is a great way to create greater peace of mind.
As the landscape of work continues to evolve, the side hustle remains a powerful tool for navigating economic uncertainties. Whether you’re considering a part-time gig, freelancing, or exploring entrepreneurial pursuits, the side hustle has become an integral part of the modern approach to financial security and success.
Tax implications of a side hustle
Although there are plenty of benefits to secondary income streams, you must be aware of the tax implications for it to be a successful strategy.
As you receive payment for your goods or services, your income needs to be reported, even if it is irregular or a small amount. When you declare your side hustle income, the good news is that you can also claim deductions for related expenses when you keep the receipt. If you’re a food delivery rider, for example, you can claim some of your bike costs. However, you cannot claim any personal riding time costs associated with your bike.
If you are unsure about what you can or can’t claim for your secondary income stream, we recommend working with an Accountant to ensure that you are minimising your tax commitment and maximising your earning potential.
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Written by APS Senior Accountant, Stephen Fry.
Stephen is an accountant with over 13 years of professional expertise in the areas of taxation and accounting. Currently serving as a senior tax accountant at APS Tax, Stephen offers comprehensive guidance and ensures compliance in all tax-related matters. He has developed a specialised focus in areas such as self-managed superannuation funds, cryptocurrency taxation and leveraging software and technology to assist clients to streamline their processes. Beyond his professional pursuits, Stephen cherishes quality time with his family and enjoys unwinding on the golf course. On the weekends he also enjoys spending time with his family, following the AFL and watching British comedy television.