Yes, some crowdfunding campaigns, gifts, and online income are taxable in Australia. But whether you need to pay tax depends on where the money came from, what it was for, and your overall circumstances. In this guide, we break down the tax treatment of each type of income in plain English, so you can stay on the right side of the ATO.
Crowdfunding and Tax in Australia
Crowdfunding is when people donate or invest money to support a cause, business, or product,usually through platforms like GoFundMe, Kickstarter, or Pozible. Not all crowdfunding is taxed, but some campaigns do trigger tax obligations.
Types of Crowdfunding and How They’re Taxed
To understand whether tax applies, the ATO looks at the nature of the campaign:
1. Donation-based Crowdfunding
- Example: You raise money for medical bills or to support someone in crisis.
- Tax Treatment: Generally not taxable, unless the funds are used in a business or income-producing activity.
2. Reward-based Crowdfunding
- Example: You offer T-shirts, artwork, or early access to a product in exchange for support.
- Tax Treatment: This is assessable income. If you’re offering something in return, the ATO treats this like running a business.
3. Equity-based Crowdfunding
- Example: People invest money into your company and get shares in return.
- Tax Treatment: Tax applies if your company issues shares, but tax rules are complex. You may also trigger capital gains tax (CGT) down the line.
4. Debt-based Crowdfunding
- Example: Supporters lend you money with the promise of repayment plus interest.
- Tax Treatment: Any interest you pay is tax-deductible for your business. The interest your supporters earn is taxable income for them.
When Crowdfunding Becomes Business Income
If you run regular campaigns, sell products, or have a business structure in place, your crowdfunding income is likely assessable. You may also need to register for an ABN and even charge GST.
Gifts and Donations: What’s Taxable and What’s Not
Not all money received is income. Gifts from friends or family are often not taxable,but there are exceptions.
Personal Gifts
- Example: Your aunt sends you $5,000 for your birthday.
- Tax Treatment: Not taxable. The ATO generally doesn’t tax personal gifts if there’s no expectation of providing something in return.
Gifts Received by Businesses or Creators
- Example: A YouTube viewer donates $50 via PayPal or Buy Me a Coffee.
- Tax Treatment: Taxable. If the gift supports your business or creative work, the ATO treats it as income.
Online Income: What the ATO Expects You to Declare
The line between hobby and business is often blurry when it comes to online income. But if you’re earning money consistently, it’s usually taxable.
Freelancing and Side Hustles
- Example: You offer services via Fiverr or Upwork.
- Tax Treatment: Taxable business income. You may need an ABN, and you’ll need to declare all income, even if it’s irregular.
Selling Products Online
- Example: You sell handmade candles on Etsy or eBay.
- Tax Treatment: Taxable if you sell regularly or with a profit motive. Occasional personal sales may be exempt, but it depends on volume and intent.
Affiliate Marketing and Sponsorships
- Example: You earn a commission by promoting products on Instagram or your blog.
- Tax Treatment: Taxable income. Even free products may count as income if you promote them.
Content Creation (YouTube, Twitch, TikTok, etc.)
- Example: You receive ad revenue, tips, or sponsorships.
- Tax Treatment: Taxable. If you’re consistently earning, the ATO sees this as running a business.
Cryptocurrency and NFTs
- Example: You sell digital art or accept crypto donations.
- Tax Treatment: May trigger capital gains tax or be treated as income. The tax depends on whether you’re an investor or operating a business.
When You Need to Report This Income
Generally, you need to report all income on your tax return,even if it came through PayPal, crypto, or a platform that doesn’t issue a payment summary.
You should:
- Keep records of all income and expenses
- Consider registering for an ABN if you’re in business
- Review whether you’re required to register for GST (if turnover is $75,000+)
What You Can Claim as Deductions
If your crowdfunding campaign or online activity counts as a business, you can usually claim related expenses such as:
- Platform fees (e.g. GoFundMe or Etsy charges)
- Internet and software costs
- Marketing and content creation tools
- Professional advice (e.g. tax agent or accountant fees)
Summary: What’s Taxed and What’s Not
| Income Type | Taxable? |
| Personal gift from family or friend | No |
| Crowdfunding with rewards (e.g. T-shirts, early access) | Yes |
| Business-related donations (e.g. “Buy Me a Coffee”) | Yes |
| One-off GoFundMe for personal hardship | No (usually) |
| Affiliate marketing or brand sponsorships | Yes |
| YouTube/TikTok ad revenue or tips | Yes |
| Selling products on Etsy/eBay | Yes, if ongoing |
Final Thoughts: Stay Informed and Keep Records
As online income streams evolve, the ATO is keeping up. Whether it’s a crowdfunding campaign, a viral TikTok, or a digital art sale, it’s your responsibility to understand what income needs to be declared.
If you’re unsure, speak with a registered tax agent who understands online business models. A bit of planning can save you a lot of stress at tax time.
About The Author: Artur Osadchiy
Artur is a Certified Practising Accountant with over 30 years’ experience working as a trusted advisor to 600+ clients across Australia. Based in Melbourne, he started Tax Window with his wife Marina in 2009 and leads the firm’s tax and accounting team. In his free time, Artur enjoys watching the AFL (go Kangas!) and spending time with family.
Not sure where to start? Or already know what you need?
Book a meeting. Completely free, no preparation needed.
Talk through your situation with one of our senior accountants and get your questions answered. A quick, commitment free conversation, online or at our Bentleigh office.