At a glance
- Nearly one million Australians have side hustles worth $9.8 billion.
- Three in ten side hustlers struggle with business/hobby distinctions and record-keeping.
- Firms can support with digital-first solutions, education-based engagement and milestone service packages.
The ATO’s random enquiry program uncovered something striking: three in 10 small businesses want to pay the right tax but simply can’t navigate the compliance maze. Could this be the signal of an underserved market hiding in plain sight as nearly one million Australians now juggle multiple income streams?
From removalists earning $167 per gig to fence builders commanding $1,100 per job on digital marketplaces like Airtasker, the side hustle landscape spans every skill level and industry. The ABS reported 986,400 Australians held multiple jobs as of September 2024, a number that’s grown 25% over the past four years, almost double the growth rate of main jobs.
Cash strapped workers aren’t the only ones driving this trend. Cost of living pressures from inflation have pushed professionals into supplementary careers and entrepreneurship. They now represent the second highest group of multiple job holders, often using side ventures as business incubators while maintaining employment security.
Sally Davies, general manager for Soloists at MYOB, says side hustlers are a passionate and growing community in Australia.
“Nearly half (46.5%) of sole traders we recently surveyed started their business in the last five years, making this growing segment one to watch and a prime consideration for the accounting sector’s continued support and investment,” she says.
Lawrence Petruzzelli, principal partner at MDB Taxation and Business Partners, says it’s never been simpler for Australians to pick up extra cash after hours.
“I’ve had countless Uber drivers who’ve just clocked off their 9-to-5 jobs and are now doing a 5-to-7pm shifts behind the wheel,” he says. “Most of these gigs give you a bit of extra income, not a business empire. You could live off it, sure, if you move to somewhere like Bali and get paid in USD. But in Australia, it’s mostly about survival.”
Compliance blind spot
Morgan Wilson, founder & director of Creditte Accountants & Advisors, says that while technology has lowered the barrier to entry to business, the complexity behind the scenes hasn’t changed.
“That’s where compliance gets tricky,” he says. “Many side hustlers underestimate the tax and regulatory obligations that come with even modest income. Common pitfalls include not registering for an ABN (or even GST if applicable), neglecting to report income, or misclassifying business expenses.”
Petruzzelli says the hobby-business boundary is another trap new entrepreneurs fall into.
“If you’re regularly making money with the intent to profit, you’re running a business,” he says. “For rideshare drivers like those on Uber, GST registration is mandatory from day one even if you earn just $1. That’s a compliance set up most aren’t ready for.”
Scale-up thresholds are also often missed. By the time the business owner realises they’ve crossed the $75,000 GST threshold, they’ve usually accumulated significant retrospective GST liabilities. Inadequate separation between personal and business finances is the other key issue, with side hustlers using personal accounts for business transactions, claiming non-deductible expenses and maintaining insufficient documentation for legitimate deductions.
Side hustle economy an opportunity for accountants
While plenty of cost-effective tools exist to help side hustlers manage their finances, Petruzzelli warns trying to hack the tax system is risky.
“I’ve seen people get themselves into serious situations, whether it’s overpaying tax, missing deductions or getting hit with large tax debts they weren’t expecting,” Wilson says. “A good accountant isn’t cheap, but neither is a tax audit.”
Wilson believes success lies in recognising the unique needs of this emerging client segment and offering tailored services. “These aren’t just scaled-down versions of big business accounting—they’re proactive, tech-enabled solutions that meet people where they are,” he says.
Firms thinking about how to best meet the needs of micro-business owners may consider initiatives designed specifically for the side-hustle economy, such as:
- Develop or implement a side hustle diagnostic tool: Create a simple questionnaire to quickly assess compliance risks and opportunities for new side-hustle clients. This helps identify immediate needs while demonstrating your expertise in their specific situation.
- Host education seminars: Host regular workshops or webinars targeting side hustle challenges, such as hobby to business transition, GST registration requirements and record-keeping fundamentals. This positions your practice as a knowledge leader, while creating a natural pipeline for service conversion.
- Use technology platforms: Side hustlers are inherently digital, so create a service around setting up cloud-based bookkeeping platforms with receipt scanning capabilities and bank feed integrations. It also pays to educate yourself on how marketplaces like Airtasker and Etsy work.
- Create milestone service packages: Structure your packages around critical transition points: hobby-to-business conversion, approaching GST thresholds, hiring first contractors and eventual transition to full-time operation.
Today’s side hustlers could be an untapped reservoir of future clients. Firms that engage early and grow alongside them can cultivate long-term relationships that traditional acquisition strategies can’t match.
The IPA’s Tax Agent Planning Series Online (TAPS) is a full day intensive seminar on 6 May that guides you through the key tax planning strategies to consider for business and non-business taxpayers for 2025. More information here.
