Do social media influencers pay tax?

Being a social media influencer is now considered a lucrative and exciting career choice for many.

What is a social media influencer?
An influencer is a person who has a large online following due to the content they create. They usually publish on platforms like Facebook, Instagram, YouTube, X or TikTok.
Generally, they create video content or posts which are compelling to their audience. While being an influencer was once generally perceived as a side-hustle, the global influencer marketing industry is expected to hit US$24 billion this year.
Because influencers (as the name suggests) have a lot of sway with their audiences, they are employed by brands to highlight and promote their products or services. Influencers will often be paid non-cash benefits such as gifts for this promotion but can also be paid in currency.
Either way, if the influencer promotes the product (as a gift or as paid work) they are expected to pay tax on their income.

Is creating online content considered a business?
If you have an intention to make a profit, carry out business-like activities (such as selling goods and services to the public), and make repeated transactions – you are probably considered to be carrying on a business.

What do I have to declare as a social media influencer?
As an influencer, your income could be from a variety of sources. It’s important to note that all of the following is considered income:
• Cash and currency (foreign or domestic)
• The value of gifts or products you’ve been given to promote (such as holidays or clothing)
• The value of gifts from businesses (even if they haven’t been used for promotion)
• Collaborations with other influencers
• Payments from social media platforms
• Fees for appearing at events
• Fees form others licensing your content
• Sponsorship arrangements.
Whether you are in business or not, you are required to declare all of this income.

What can I claim as a deduction?
Broadly speaking, you can claim all of the costs you incur to create content and run your business. This could include any production equipment such as:
• Phones
• Other recording devices
• Professional cameras
• Editing/production software
• Lighting, screens etc.

Read more in acuity magazine: Do social media influencers pay tax? | Acuity (acuitymag.com)
And on the ATO website: Tax tips for social media influencers and content creators | ATO Community

Published 18/11/24