Is your hobby a business?

Business Victoria

13 February 2023

At what point does a hobby become a business? It’s important to understand whether your activities are classified as a hobby or a business for tax and legal purposes.

What is a hobby?

A hobby is activity or pastime you do for reasons enjoyment, relaxation or to develop skills. Your activities may start as a hobby and develop into a business as you grow.

Examples of hobbies that can become businesses include:

  • arts and crafts such as photography, art or jewellery-making
  • gardening
  • repairing and handy services
  • creating or designing websites
  • cooking

Does your hobby take up most of your time? Does it support you financially? If so, it’s probably a business.

Am I running a hobby or a business?

Whether your hobby is a business depends on factors such as your purpose and how you operate. It doesn’t matter how much you earn – there’s no financial threshold to tell you if your hobby is a business.

As a hobby you:

  • can claim the costs of materials when gifting or selling your work
  • don’t need to declare the income you make from your hobby to the Australian Tax Office (ATO)

You’re most likely in business if you:

If your business is a hobby, you can continue operating as you are.

Need more information?

Information adapted from Business Victoria’s website.

Business Victoria