It's important to understand whether your activities are classified as a hobby or a business for tax and legal purposes.

What is a hobby?

A hobby is a leisure activity or pastime that you do for reasons such as enjoyment, relaxation or skills development. Your activities may start as a hobby and develop into a business as you grow.

Examples of hobbies that can turn into businesses include:

  • art and creative endeavours such as photography or jewellery-making
  • gardening
  • repairing and handy services
  • creating or designing websites
  • blogging or social media influencing

How to know if you're running a business

Whether your hobby is a business depends on factors such as your purpose and how you operate. It doesn’t matter how much you earn – there's no financial threshold to tell you if your hobby is a business.

As a hobby you:

  • can recoup the costs of materials when gifting or selling your work as long as you are not intending to make a profit
  • don't need to declare the income you make from your hobby to the Australian Tax Office (ATO).

You're most likely in business if you:

If your business is a hobby, you can continue operating as you are.

If you're still unsure, read Are you ready to start a business? on

Benefits of turning your hobby into a business

There are several advantages to having a business. As a business you can:

  • apply for an ABN
  • register a website that ends in
  • claim tax deductions for business expenses against your taxable income
  • access government services and support for businesses

If your activities constitute a business, find out how to set up and become a business owner.