The days when you could quietly sell a few bits and pieces online without the taxman knowing are well and truly over.
These days, every swipe, tap, and digital transaction leaves a trail that leads straight back to the Australian Taxation Office—and they're using some seriously sophisticated technology to follow it.
Just ask the 24 per cent of seniors who now have side hustles, many of whom are discovering that what they thought was a harmless hobby has caught the ATO's attention in ways they never expected.
The reality hit home for one unsuspecting Australian who 'swore black and blue' for years that he didn't have any other income, according to Tax Invest Accounting director Belinda Raso. His shock was palpable when Square reported nearly $100,000 of income flowing through his account in the 2024 financial year—income from buying spare parts through Facebook Marketplace and onselling them for profit.
'Everything's pretty much coming to light since last year's return,' Raso explained to Yahoo Finance. The man hadn't declared the income because he didn't believe he was running a business and thought it was just a hobby. Unfortunately for him, the ATO disagreed.
When the digital net closes
The ATO's 2025 data-matching program uses AI to compare BAS, payroll, banking, crypto, property, and gig income data in near real-time. It's a far cry from the old days when you might get away with not mentioning that weekend market stall or online sales.
From 1 July 2023, the Sharing Economy Reporting Regime commenced and the ATO receives data from electronic distribution platforms including eBay, PayPal, Amazon, and merchant facilities like Square. These platforms now automatically report transaction details to the ATO annually, creating an unprecedented level of financial transparency.
'Don't fall into the trap of forgetting to include all your income thinking the ATO won't notice'
The scope extends far beyond simple online sales. Income from platforms like Uber, Airbnb, eBay, and Amazon is now fed directly into the ATO's systems, allowing instant detection of undeclared income or businesses exceeding the GST threshold without registration.
The costly lesson: When hobbies become businesses
The Facebook Marketplace seller's story illustrates a crucial distinction that trips up many Australians. Because his income exceeded $75,000 in the financial year, he became liable for both income tax and GST. Worse still, because he'd paid for everything in cash and kept no records, he couldn't claim any of his substantial expenses.
'There was no paper trail. Eventually, people have to understand that—cash paper trails end somewhere,' Raso warned. 'Whilst you might be thinking, I'll just pay for this in cash and I'll get it cheaper, eventually someone's going to pay.'
Business or hobby? The ATO's test
The ATO won't consider activities as 'in business' when they are a one-off transaction (unless it is the first step in carrying on a business or intended to be repeated) or an activity from which you don't seek to make a profit.
However, if you earn money through continuous and repeated activities for the purpose of making a profit, then it's likely you're running a business.
The $12,000 threshold that matters
The ATO's data-matching program is particularly targeted at those making more than $12,000 in sales on platforms like Amazon and eBay, rather than people simply selling their own belongings online. This threshold represents the point where occasional sales start looking like regular business activity.
If you're selling items you already own—that old furniture, books, or collectibles gathering dust—you're generally in the clear. But if you're buying items specifically to resell them, or if you're consistently earning money from creative work, services, or regular sales, the ATO will likely consider it business income.
The two-year reach-back
Even if you've already lodged your tax return and received a refund, don't assume you're safe. The ATO can review returns going back two years, or even further if they suspect tax evasion. 'Every dollar dodged is a dollar that can't be used for vital services like health and education,' as ATO Assistant Commissioner Tim Loh puts it.
Source: @taxinvestaccounting / Tiktok.
How to check what the ATO knows about you
Fortunately, you don't have to wonder what information platforms have reported about you. Here's how to check through your myGov account:
- Log into your myGov account
- Click on 'Tax'
- Select 'Manage'
- Choose 'Reported Transactions'
This shows you exactly what third-party data the ATO has received about your financial activities. Importantly, this information won't appear in your tax return pre-fill—you need to actively look for it in the reported transactions section.
Record keeping for the digital age
'It doesn't matter whether you are carrying on a business or simply earning additional income through a digital platform, you must keep accurate records of your income and include it in your tax return,' the ATO emphasises.
For those with legitimate side hustles, proper record keeping can actually save you money through valid deductions. The myDeductions tool on the ATO app allows you to keep records of your work and general expenses to make lodging your tax return easier.
Essential records to keep
- Bank statements and payment records
- Receipts for all business-related purchases
- Records of income from all sources
- Vehicle logbooks if using your car for business
- Home office expense calculations
- Internet and phone bills (business portion only)
What you can legitimately claim
If you are running a legitimate business or side hustle, there are valid deductions available. As Raso explains: 'Say to yourself, if I didn't have this business, this side hustle, would I make this purchase? So anything that is directly connected to earning income in that side hustle, in most cases, is going to be deductible.'
This could include:
- Items purchased specifically for resale
- Internet and mobile phone costs (business portion)
- Motor vehicle expenses for business use
- Home office costs if you work from home
- Equipment and tools needed for your business
Using the fixed rate method allows you to claim 70 cents for every hour you work from home and covers your additional running expenses like internet, phone usage, electricity and stationery.
The broader surveillance net
The ATO's data-matching program cross-references millions of data points from financial institutions, employers, government agencies, and digital platforms. In 2025, its scope has expanded to include more industries, new income sources, and advanced AI analysis.
The system now monitors:
- Cryptocurrency transactions and exchanges
- High-value asset purchases and insurance
- International bank account information
- Social media monetisation
- Rental income from platforms like Airbnb
Did you know?
Did you know?
AI-driven pattern recognition allows the ATO to identify under-reported income, inflated deductions, and mismatches between reported data and third-party sources. Bank loan data is now matched with property purchase records to check interest deduction claims.
Getting help when you need it
The ATO has new-to-business resources, webinars and tools to help you kick-off on the right foot. You can also talk to a registered tax professional.
The key message from tax professionals is clear: the days of 'secret' side hustles are over. To avoid audits, keep accurate, reconciled records, separate personal and business accounts, and work with a registered tax agent.
As one accounting firm puts it: 'The ATO isn't trying to catch you out, but they do expect honesty, accuracy, and good record-keeping. If you're running a small business or earning income through side gigs, now is the time to tighten your processes'.
What This Means For You
The bottom line? Whether you're selling handmade crafts, offering consulting services, or flipping items online, the ATO's digital surveillance capabilities mean transparency isn't just recommended—it's inevitable. The smart approach is to get ahead of it with proper record keeping and honest reporting.
Have you discovered unreported transactions in your myGov account, or do you have questions about whether your activities constitute a business? Share your experiences and concerns in the comments below—many of us are navigating these same digital-age tax challenges together.
Primary Source
https://au.finance.yahoo.com/news/a...stle-income-exposed-caught-out-183053980.html
21 Surprising Side Hustle Statistics (2025): Income, Gigs, Goals
Cited text: It’s not just a millennial thing either; 24 per cent of baby boomers (age 59-77) indicated they have a side hustle1.
Excerpt: Just ask the 24 per cent of baby boomers who now have side hustles
https://www.sidehustlenation.com/side-hustle-statistics/
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: Don’t fall into the trap of forgetting to include all your income thinking the ATO won’t notice,’ Mr Loh says.
Excerpt: 'swore black and blue' for years that he didn't have any other income
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
ATO Data Matching 2025: Stay Compliant & Avoid Audits
Cited text: The ATO’s 2025 data‑matching program uses AI to compare BAS, payroll, banking, crypto, property, and gig income data in near real‑time.
Excerpt: The ATO's 2025 data-matching program uses AI to compare BAS, payroll, banking, crypto, property, and gig income data in near real-time
https://blackwattletax.com.au/tax/ato-data-matching-2025-business-compliance/
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: From 1 July 2023, the Sharing Economy Reporting Regime will commence and the ATO will receive data from more electronic distribution platforms.
Excerpt: From 1 July 2023, the Sharing Economy Reporting Regime commenced and the ATO receives data from electronic distribution platforms
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
ATO Data Matching 2025: Stay Compliant & Avoid Audits
Cited text: Income from platforms like Uber, Airbnb, eBay, and Amazon is now fed directly into the ATO’s systems. This allows instant detection of undeclared inco...
Excerpt: Income from platforms like Uber, Airbnb, eBay, and Amazon is now fed directly into the ATO's systems, allowing instant detection of undeclared income or businesses exceeding the GST threshold without registration
https://blackwattletax.com.au/tax/ato-data-matching-2025-business-compliance/
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: The ATO won’t consider activities as ‘in business’ when they are a one-off transaction (unless it is the first step in carrying on a business or inten...
Excerpt: The ATO won't consider activities as 'in business' when they are a one-off transaction (unless it is the first step in carrying on a business or intended to be repeated) or an activity from which you don't seek to make a profit
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: ATO Assistant Commissioner Tim Loh said if you earn money through continuous and repeated activities for the purpose of making a profit, then it’s lik...
Excerpt: if you earn money through continuous and repeated activities for the purpose of making a profit, then it's likely you're running a business
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: The ATO will match this information with the information taxpayers provide on their tax return or activity statement to identify income that has not b...
Excerpt: The ATO's data-matching program is particularly targeted at those making more than $12,000 in sales on platforms like Amazon and eBay
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: ‘Every dollar dodged is a dollar that can’t be used for vital services like health and education’ · ‘The ATO needs to ensure there is a level playing ...
Excerpt: 'Every dollar dodged is a dollar that can't be used for vital services like health and education,'
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: ‘It doesn’t matter whether you are carrying on a business or simply earning additional income through a digital platform, such as a website or even an...
Excerpt: 'It doesn't matter whether you are carrying on a business or simply earning additional income through a digital platform, you must keep accurate records of your income and include it in your tax return,'
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: When in doubt look for guidance on the ATO website or speak with your registered tax agent.’ · ‘If you’re anything like me, a paper receipt will get l...
Excerpt: The myDeductions tool on the ATO app allows you to keep records of your work and general expenses to make lodging your tax return easier
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
ATO unveils ‘wild’ tax deduction attempts and priorities for 2025 | Australian Taxation Office
Cited text: Using the fixed rate method allows you to claim 70 cents for every hour you work from home and covers your additional running expenses that are often ...
Excerpt: Using the fixed rate method allows you to claim 70 cents for every hour you work from home and covers your additional running expenses like internet, phone usage, electricity and stationery
https://www.ato.gov.au/media-centre/ato-unveils-wild-tax-deduction-attempts-and-priorities-for-2025
ATO Data Matching 2025: Stay Compliant & Avoid Audits
Cited text: The ATO’s data‑matching program cross‑references millions of data points from financial institutions, employers, government agencies, and digital plat...
Excerpt: The ATO's data-matching program cross-references millions of data points from financial institutions, employers, government agencies, and digital platforms.
https://blackwattletax.com.au/tax/ato-data-matching-2025-business-compliance/
ATO Data Matching 2025: Stay Compliant & Avoid Audits
Cited text: AI‑driven pattern recognition allows the ATO to identify under‑reported income, inflated deductions, and mismatches between reported data and third‑pa...
Excerpt: AI-driven pattern recognition allows the ATO to identify under-reported income, inflated deductions, and mismatches between reported data and third-party sources.
https://blackwattletax.com.au/tax/ato-data-matching-2025-business-compliance/
Joined the bustle of a side hustle? | Australian Taxation Office
Cited text: If you are finding your feet in business, the ATO is here to support you. The ATO has new to business resources, webinars and tools to help you kick-o...
Excerpt: The ATO has new-to-business resources, webinars and tools to help you kick-off on the right foot.
https://www.ato.gov.au/media-centre/joined-the-bustle-of-a-side-hustle
ATO Data Matching 2025: Stay Compliant & Avoid Audits
Cited text: To avoid audits, keep accurate, reconciled records, separate personal and business accounts, and work with a registered tax agent.
Excerpt: To avoid audits, keep accurate, reconciled records, separate personal and business accounts, and work with a registered tax agent
https://blackwattletax.com.au/tax/ato-data-matching-2025-business-compliance/
Navigating the ATO's 2025 Data-Matching Programs: What Small Businesses Need to Know—Moore Lewis & Partners
Cited text: The ATO isn’t trying to catch you out, but they do expect honesty, accuracy, and good record-keeping. If you’re running a small business or earning in...
Excerpt: 'The ATO isn't trying to catch you out, but they do expect honesty, accuracy, and good record-keeping.
https://moorelewis.com.au/news/navi...-programs-what-small-businesses-need-to-know/
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