As soon as you start to earn a regular income from your practice, you must also start to pay tax. A tax is a charge or levy, which is deducted from your earnings and paid to the Australian Tax Office.

Is Your Arts Practice a Business or a Hobby?

This is a difficult question to answer, as it varies depending on your circumstances. Your practice can usually be verified as a business if you can successfully prove that you are earning or intend to make earnings from it and are engaging in a business-like manner. Visit the Australian Taxation Office website to determine your eligibility and entitlements.

If you are considered to be running a business, then you will be taxed according to your earnings. If you are running a business you can claim deductions that you incur from earning your income and you can offset losses against other income you are earning.

If you occasionally engage in your arts practice, but you do not intend to make significant sum money from it at this point in time, it is likely to be classified as a hobby. In this instance you cannot offset any losses you make from your practice against other income you make.

Other Legal Considerations

If you are registering your business, there are many other legal requirements you have to consider, such as:

What does the structure of your business look like? Are you operating as a sole trader, partnership, trust or company?

Do you need to register for a tax file number?

Do you need to register for PAYG withholding?

How will you pay your superannuation guarantee to your employees or to yourself?

Do you need to register for an Australian Business Number (ABN) or Australian Company Number (ACN)?

There’s a lot to consider, but nothing that you cannot manage! The Australian Taxation Office have detailed documents on their website which explain if and how you need to register your business so that you meet all of the legal requirements.

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Amplifier Modules

Use the buttons below to navigate the various Amplifier Arts Business Guide for Creative Young People educational modules.