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Even if you started your YouTube channel as a hobby, when you start to receive income from your streaming content, it is likely to be classified as a business by the ATO. Therefore, you need to pay taxes on any income you have generated from your channel.
If you’re not sure how to organise your YouTube tax return, or want to make sure you do it right, it’s a good idea to get help from a professional tax agent.
Quite simply – yes. Your YouTube channel is just like any other form of income-producing activity.
If you answer yes to any of these, the ATO would likely classify your channel as a business.
Still not sure? Speak with us.
While many are lured to YouTube by the dream of easy internet riches, producing a YouTube channel is hard work, and it can take years to build up an audience big enough to support a lavish lifestyle. That being said, there are many YouTubers who make a comfortable living from their channels. Here are the main ways they do it.
The majority of a YouTuber’s income is made through advertisers. When viewers click on ads in videos, or view over 30 seconds of an in-video advertisement, the channel owner receives a small payment of around $.18 (paid per 1,000 views). The more viewers that watch your videos, and the more clicks your channel racks up, the more income you will make. However, Google keeps 45% of this revenue, so on average a YouTuber makes less than $10 per 1,000 views.
Affiliate marketing is basically an arrangement where an online seller pays commission to YouTubers for sales generated from their referral links.
Most affiliates make money by posting product review videos to their channel with a link to buy the product in the video description. The amount paid to the YouTuber depends on the arrangement they have with the affiliate manager, but it can be as high as 90% of the product price in some instances.
If you’re a YouTuber who is making money from your channel, your income is subject to the same taxes as any other business. YouTube is required by law to collect your tax information, and may withhold up to 24% of your earnings if they don’t receive it.
As a creator outside of the US, YouTube will require you to fill out form W-8BEN to complete your tax information. You can find this form in the Payments tab of your Adsense account.
You do not need to register for GST as a sole trader, but that means you cannot claim related expenses on your income tax, nor can you claim GST credits on any business-related purchases.
If you intend to claim GST credits for purchases related to your channel, or if you earn over $75,000 per year from YouTube, then you must obtain an ABN.
Any items that are directly related to producing your YouTube channel may be deductible at tax time. These include –
If you choose to file your tax return yourself, it can be filed with the ATO through your myGov account. Alternatively, get in touch and take the stress out of tax time.