I have a job and an ABN. How is my side hustle taxed?
There is no separate ABN tax rate. Your side hustle profit is added to your wages on one tax return and taxed at your top rate, which for most full-time workers is 30% plus the 2% Medicare levy. Nobody withholds tax from ABN income, so you need to put it aside yourself. If you have a HELP debt, the extra income can lift that repayment too.
The short version
- Leah should put aside about $7,050 of her $15,000 profit, which is 47c in the dollar, or 32c if she had no HELP debt.
- Your wages already fill the tax-free $18,200 and usually the 15% band. So your side hustle profit starts at your top rate, not at the bottom.
- The ATO study and training loan repayment calculator gives an estimate once you know your total repayment income. Use your wages plus your expected profit.
You have a regular job, and on weekends you mow lawns, tutor, sell prints or do a few cleans on an ABN. The money lands in your account with nothing taken out, and a small voice keeps asking how much of it is actually yours.
Good question to ask now rather than in August. Here is how the ATO sees your two kinds of income, and how to work out your own number.
There is no ABN tax rate
Lots of people search for the ABN tax rate. It doesn't exist. As a sole trader you are taxed as an individual, so your business profit goes on the same tax return as your wages and the total is taxed at the normal resident rates.
The 2026-27 resident rates are:
- $0 to $18,200: nil
- $18,201 to $45,000: 15c for each $1 over $18,200
- $45,001 to $135,000: $4,020 plus 30c for each $1 over $45,000
- $135,001 to $190,000: $31,020 plus 37c for each $1 over $135,000
- $190,001 and over: $51,370 plus 45c for each $1 over $190,000
On top of that most people pay the Medicare levy of 2%. The rates table itself doesn't include it.
Your next-dollar rate is the one that matters
Because the profit sits on top of your wages, the rate that applies is the rate on your next dollar. If your wages put your taxable income anywhere between $45,001 and $135,000, every extra dollar of profit in that band is taxed at 30c, plus 2c Medicare levy. That's 32c in the dollar.
If the profit pushes you past $135,000, the dollars above that line are taxed at 37c plus Medicare. Work it out in two pieces if you straddle a line.
Worked example
Leah's $15,000 of weekend landscaping
Example only. Leah is an example person, a receptionist in Ballarat on $71,000 in wages. She has no other work expenses, so the $1,000 standard deduction takes her wage taxable income to $70,000. Her weekend landscaping makes $15,000 profit after expenses. She has a HELP debt and nothing else counts in her repayment income.
| Step | Sum | Result |
|---|---|---|
| Taxable income with the side hustle | $70,000 + $15,000 | $85,000 |
| Tax at 2026-27 rates on $85,000 | $4,020 + 30% x ($85,000 - $45,000) | $16,020 |
| Tax on $70,000 without it | $4,020 + 30% x ($70,000 - $45,000) | $11,520 |
| Extra income tax | $16,020 - $11,520 | $4,500 |
| Extra Medicare levy | $15,000 x 2% | $300 |
| HELP on $85,000 | 15% x ($85,000 - $69,528) | $2,320.80 |
| HELP on $70,000 | 15% x ($70,000 - $69,528) | $70.80 |
| Extra HELP | $2,320.80 - $70.80 | $2,250 |
| Total cost of the side hustle profit | $4,500 + $300 + $2,250 | $7,050 |
Leah should put aside about $7,050 of her $15,000 profit, which is 47c in the dollar, or 32c if she had no HELP debt.
Her income is above $66,667, so the low income tax offset doesn't apply. Figures are rounded to the dollar where shown and ignore any HELP her employer has already withheld for her wages.
Why HELP can bite harder than you expect
Since 2025-26, HELP repayments are worked out on a marginal system. In 2026-27 you repay nothing if your repayment income is $69,528 or less, then 15c for each $1 over $69,528, up to $129,717.
Your employer withholds an amount for HELP from your pay, but only based on your wages. Nobody withholds anything for HELP from your ABN income. If your side hustle takes you over the threshold, or further into it, the whole extra repayment turns up at tax time.
In Leah's example below the side hustle adds $2,250 to her HELP repayment. Added to the tax, that's about 47c of every profit dollar. Without a HELP debt it would be 32c.
It's profit that gets taxed, not takings
You pay tax on what is left after business expenses. If you earn $15,000 from landscaping and spend $3,000 on fuel, tip fees and a new hedge trimmer, it's the $12,000 that goes on top of your wages. Keep receipts. The ATO says you are legally required to keep records of all transactions, generally for 5 years.
One new wrinkle for 2026-27. Employees get an automatic standard deduction of up to $1,000 for work-related expenses. It only applies to labour income such as wages. Your business expenses are claimed separately and don't reduce it, so a job plus an ABN can use both.
Two ways to pay it
You can set money aside yourself, or prepay through PAYG instalments.
- Set aside: move a set slice of each payment into a separate account as it arrives. Leah would move 32c in the dollar, or 47c with her HELP debt.
- PAYG instalments: the ATO puts you in automatically once your latest return shows instalment income of $4,000 or more, tax payable of $1,000 or more and estimated (notional) tax of $500 or more. You can also join voluntarily, and the ATO suggests this if you are new to business.
If your side business makes a loss
A sole trader may be able to offset a business loss against other income, like wages, in the same year. To do that under the non-commercial loss rules, your income for these purposes must be under $250,000 and your business must pass at least one of four tests, such as assessable business income of at least $20,000, or a profit in three of the past five years. If you don't qualify, the loss isn't wasted. It's deferred, and can generally be used against profit from that same business in a later year. Check the ATO's guidance or ask a registered tax agent before you count on it.
If you get a Centrelink payment
Services Australia says sole traders must tell them about business income so it can be assessed. They use what you tell them about your business to work out an annual income amount, and you need to tell them within 14 days about any changes to your overall business income or assets.
Key numbers
| What | Figure and source |
|---|---|
| 2026-27 resident tax rate, $45,001 to $135,000 | $4,020 plus 30c for each $1 over $45,000 ATO |
| Medicare levy | 2% ATO |
| 2026-27 HELP threshold and first band | Nil to $69,528, then 15c for each $1 over $69,528 ATO |
| HELP marginal system | Only income above the threshold ATO |
| Standard deduction does not apply to business-only income | Labour income only ATO |
| Expenses for other income don't reduce the standard deduction | Not reduced ATO |
Free official help
- ATO Community: Tax tips for managing your side hustle
The ATO's plain-English rundown for people with a job and a side business. - ATO: Are you in business?
The questions the ATO asks to decide if your side activity is a business. - ATO: Starting PAYG instalments
When you are put into instalments and how to join voluntarily. - ATO: Study and training loan repayment calculator
Estimates your compulsory HELP repayment from your repayment income. - Moneysmart: Income tax calculator
Works out tax and your marginal rate, with a 2026-2027 option. - Services Australia: Sole trader or partnership income
How business income is assessed if you get a Centrelink payment.
Questions people ask
Is ABN income taxed at a higher rate?
No. It's taxed at the same resident rates as wages. It often feels higher because it sits on top of your wages, at your top rate, and nothing is taken out as you go.
Do I need a separate tax return for my ABN?
No. As a sole trader you report your business income and expenses in your individual tax return, alongside your wages.
My employer withholds HELP. Doesn't that cover it?
Only for your wages. Your employer doesn't know about your ABN income, so any extra HELP from it is worked out when you lodge.
How much should I set aside if I don't have a HELP debt?
If your total taxable income stays between $45,001 and $135,000, about 32c of each profit dollar covers income tax and Medicare levy. Check with the ATO or a registered tax agent if your situation is more complicated.
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Keep reading
Sources
- Tax rates: Australian residents. https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents, accessed 2026-10-16.
- Study and training support loans rates and repayment thresholds. https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds, accessed 2026-10-16.
- Standard deduction for work-related expenses. https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/work-related-deductions/standard-deduction-for-work-related-expenses, accessed 2026-10-16.
- Starting PAYG instalments. https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/starting-payg-instalments, accessed 2026-10-16.
- Business losses. https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses, accessed 2026-10-16.
- Overview of record-keeping rules for business. https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/record-keeping-for-business/overview-of-record-keeping-rules-for-business, accessed 2026-10-16.
- Tax tips for managing your side hustle. https://community.ato.gov.au/s/article/a079s000000ZeJFAA0/Tax-tips-for-managing-your-side-hustle, accessed 2026-10-16.
- Sole trader or partnership income. https://www.servicesaustralia.gov.au/individuals/services/centrelink/parenting-payment/who-can-get-it/income-and-assets-tests/income/sole-trader-or-partnership-income, accessed 2026-10-16.
- Offsetting current year business losses (ATO). https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/business-losses/offsetting-current-year-business-losses, accessed 2026-10-16.