Is Affiliate Marketing Income Taxable in Australia?

💵 Yes, the ATO considers affiliate income assessable🔗

No grey area here. Affiliate commissions are assessable income under section 6-5 of the Income Tax Assessment Act 1997, income according to ordinary concepts. The ATO explicitly includes commission income and payments for promotional work online in its list of what businesses must include as assessable income.

🎯 The essential: The hobby exemption almost never applies to affiliate marketing, and this is where a lot of people get it wrong.

The hobby exemption exists for genuine recreational activities, someone who knits scarves for fun, or grows tomatoes in their backyard. The key test is whether there's a profit intention. With affiliate marketing, you signed up to a program with the explicit purpose of earning commissions. That's not a hobby by any reasonable definition.

The ATO's business indicators (from TR 97/11) include profit intent, repetition and regularity, operating in a business-like manner, and commercial scale. Affiliate marketing ticks most of these boxes by design. You built a site, joined a program, and started promoting, that's a business activity. See our Hobby or Business ATO Test article for the full indicator checklist.

A few things worth distinguishing. Referral bonuses (a bank giving you $50 for referring a mate) sit in greyer territory, they may be treated as a windfall rather than recurring business income, see our Are Referral Bonuses Taxable in Australia article for the full breakdown. Resellers and dropshippers are in a completely different category, you are the seller and the customer pays you, a different tax structure entirely, covered further down. And non-cash commissions, free products, gift cards, software subscriptions, still count as income. You declare them at their market value on the date you received them, a $200 gift card is $200 of assessable income.

This treatment is similar to YouTube AdSense, Twitch subscriptions and Patreon income, all assessable, all declared in your tax return. See our Tax on YouTube, Twitch and Patreon Income in Australia article for how those stack up.

📝 Do you need an ABN?🔗

Short answer: almost certainly yes, once you're earning regular commissions.

The ATO's business indicators apply here too. Affiliate marketing, by its nature, involves profit intent, systematic promotion, and repeated transactions, that's the definition of carrying on a business or enterprise, which is exactly what entitles you to an ABN.

🎯 The essential: The practical consequence of not having an ABN is brutal: payers can withhold 47% of your payments under the ATO's no-ABN withholding rules.

That's not a fine, it's just the tax rate that applies when you haven't identified yourself as a business. You can claim it back at tax time, but it's a cash flow headache you don't need. ABN registration is free and takes about 10 minutes at abr.gov.au, there's no reason to delay.

💱 What about foreign currency? (USD commissions from Amazon, ShareASale and co)🔗

Many of the biggest affiliate networks pay in USD. Amazon Associates, ShareASale, CJ Affiliate, all USD. This doesn't make the income foreign or exempt. You're an Australian tax resident, which means you pay tax on worldwide income.

The general rule: convert your USD earnings to AUD at the exchange rate on the date you received the payment.

For regular, frequent payments, monthly commissions from a network for example, the ATO does allow a simpler approach in some cases. Its own guidance confirms you can translate foreign income using an average exchange rate over a period you choose (up to 12 months), provided that average is a reasonable approximation of the rates that would otherwise have applied on each transaction date. In principle, this mechanism could cover regular affiliate commission income, but whether your specific situation qualifies, and which average-rate method is appropriate, is worth confirming with a registered tax agent before you rely on it.

🎯 The essential: For reference, unofficial estimates place the ATO's average annual USD rate for FY2024-25 (year ended 30 June 2025) somewhere around 0.65 AUD per USD. We couldn't independently verify the exact published figure at the time of writing, so check the ATO's official annual exchange rate table for the precise number before using it in your return.

Either way, use the ATO's official exchange rates, not Google's rate, not your bank's rate. The ATO publishes both annual average rates and monthly rates at ato.gov.au/tax-rates-and-codes/foreign-exchange-rates-overview.

Keep records of:

• Payment date
• USD amount received
• AUD equivalent
• Exchange rate used and its source

The ATO also has a Foreign Income Conversion Calculator you can use.

🧾 What expenses can you deduct?🔗

The flip side of paying tax on affiliate income is that legitimate business expenses reduce your taxable income. The golden rule: the expense must be incurred in producing assessable income. Personal use doesn't count, and if something is partly personal, partly business, you can only claim the business portion.

Here's what's typically deductible for an affiliate marketer:

Equipment and depreciation: a laptop or camera isn't immediately deductible in full unless it falls under the instant asset write-off threshold. For 2025-26, eligible small businesses with aggregated turnover under $10 million can immediately deduct the business portion of eligible assets costing less than $20,000 under the instant asset write-off. The 2026-27 Federal Budget announced this $20,000 threshold will become a permanent feature from 1 July 2026 rather than a year-by-year extension, though the enabling legislation was still before Parliament at the time of writing, so confirm it has passed before relying on it for future years. Items above the threshold generally need to be depreciated over their effective life instead of expensed immediately, a tax agent can confirm how this applies to your setup.

Home office, two methods:

• Fixed rate method: claim 70 cents per hour worked from home. This covers electricity, internet, phone and stationery. You can still separately claim depreciation on equipment.
• Actual cost method: claim the real work-related portion of each expense. Requires more detailed records and evidence of the business/private split.

🧮 GST, when does it apply?🔗

The GST registration threshold is $75,000 in annual turnover. Once you hit that, or expect to hit it, you must register within 21 days. See our GST Registration Threshold Australia article for the full registration process.

Most affiliate marketers won't reach $75,000 early on, but it's worth knowing the rules before you get there, not after.

If you are registered for GST, you may need to issue tax invoices for your commission income and lodge Business Activity Statements (BAS).

🔀 Affiliate marketing vs reseller/dropshipper, why the distinction matters🔗

This distinction matters a lot, especially if you're doing both.

As an affiliate marketer, you promote, the customer buys from the merchant, and the merchant pays you a commission, you never receive the customer's payment, and your income is the commission only. As a reseller or dropshipper, you are the seller, the customer pays you, and you pay the supplier, your assessable income is the full sale price you received, and your supplier cost is deductible as cost of goods sold (COGS). That's a completely different structure.

🎯 The essential: On GST: as a GST-registered reseller, once you're registered you charge GST on your sales from the first dollar of each taxable transaction, not just once you hit the $75,000 threshold. The $75,000 figure is only the registration trigger, it's not a per-sale threshold. Once registered, GST applies to all your taxable supplies regardless of turnover.

If you're running both affiliate and reselling activities, keep them clearly separated in your records. Mixing them up creates an accounting headache and potential compliance issues.

🗂️ Record-keeping, what the ATO expects🔗

The ATO requires you to keep records for 5 years. That's not a suggestion.

What to track:

• All commission payments, date, amount, currency, network
• All expenses, receipts, invoices, what the expense was for
• Exchange rate records for any foreign currency income (date, rate, source)

Practical tips:

• A separate bank account for your affiliate business is strongly recommended. Not legally required, but it makes reconciling income and expenses dramatically easier, and looks a lot better if the ATO ever asks questions.
• Accounting software like Xero or MYOB handles invoicing, expense tracking and BAS lodgement. For smaller operators, even a well-maintained spreadsheet works, just be consistent.
• The ATO's myDeductions tool (in the ATO app) lets you photograph receipts on the spot. Use it.

❓ Frequently asked questions🔗