Total revenue from trading activities
Direct costs of goods or products sold
Operating expenses, marketing, tools, etc.
Salary or other income outside trading
Net Trading Income
$12,000.00
Tax on Trading
$3,840.00
After Tax
$8,160.00
Effective Rate
15.4%
Business trading income — expenses are deductible against income.
Trading Breakdown
Understanding trading income tax in Australia
Hobby vs business
The ATO distinguishes between a hobby and a business. If your activity is a hobby, the income is still assessable but you cannot claim expenses as deductions. If it is a business, you can deduct related expenses from the income.
Is it a hobby or business?
The ATO considers factors including: intention to make a profit, regular and repeated activity, size and scale, keeping business records, having an ABN, and the nature of the activity. Selling occasionally at markets or online is more likely a hobby; consistent trading with a profit motive is more likely a business.
Tax implications
Business income is added to your other income and taxed at marginal rates. You can offset business losses against other income (subject to non-commercial loss rules). Hobby losses cannot be offset and hobby expenses are not deductible.
ATO-Aligned: Uses 2025-26 tax rates. If uncertain whether your activity is a hobby or business, consult the ATO's decision tool or a registered tax agent.
Disclaimer: This calculator provides estimates based on current ATO rates and thresholds for the 2024–25 financial year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax agent before making financial decisions. Read our terms
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