If you earn money as a UGC creator in Australia, that income is taxable. Whether you receive payments per project, monthly retainers, or gifted products, the ATO treats UGC creation as assessable income. You need an ABN, must lodge tax returns, and can claim legitimate business deductions against your earnings.
UGC Creator Tax in Australia: What You Need to Know
Understanding UGC creator tax Australia is increasingly important as this fast-growing business model where creators produce authentic-looking photos, videos, and social media content for brands to use in their marketing. Unlike traditional influencers who post to their own audiences, UGC creators produce content that brands publish on their own channels and paid advertisements.
Most UGC creators work as sole traders, completing projects for multiple brands simultaneously. Typical deliverables include short-form video (TikTok and Instagram Reels style), product photography, testimonial-style videos, and unboxing content. Payment structures range from per-project fees (typically $150–$500 per deliverable) to monthly retainers for ongoing content packages.
Is UGC Creation a Business or a Hobby?
This distinction matters because you can only claim tax deductions if your UGC creation qualifies as a business. The ATO considers several factors when determining whether your activity is a business or a hobby:
- Intention to make a profit — Are you actively trying to earn income, or is content creation purely recreational?
- Repeated and regular activity — Do you complete projects on an ongoing basis, or was it a one-off?
- Operating in a businesslike manner — Do you have an ABN, issue invoices, keep financial records, and maintain a portfolio?
- Size and scale — Are you investing time, money, and effort into growing your UGC business?
If you are actively pitching to brands, maintaining a portfolio, issuing invoices, and treating UGC creation as a source of income, the ATO will likely consider it a business. This means you must declare all income — but you can also claim deductions for legitimate business expenses.
If your UGC work is occasional and you are not genuinely trying to make a profit, it may be classified as a hobby. Hobby income generally does not need to be declared, but you cannot claim any deductions either.
Income Types for UGC Creators
UGC creators can earn income from several sources, all of which are assessable:
- Per-project payments — Fixed fees for delivering a set number of videos or photos to a brand
- Monthly retainers — Ongoing contracts where you produce a set volume of content each month
- Usage rights fees — Additional payments when brands want extended or exclusive rights to use your content in paid advertising
- Gifted products and services — If you receive products in exchange for creating content (even if not explicitly required to post), the market value of those products is assessable income
- Platform payments — Income from creator funds or ad revenue on platforms like TikTok, YouTube, or Instagram
- Affiliate commissions — Earnings from affiliate links included in your content or profiles
You must declare all of these income types in your tax return, regardless of whether the payer issues you a payment summary. For more detail on how content creator income and tax obligations work in Australia, see our dedicated industry page.
Tax Deductions for UGC Creators
As a UGC creator operating as a business, you can claim deductions for expenses directly related to producing content. Common deductions include:
Equipment and Technology
- Camera, lenses, lighting, and tripods
- Smartphone (business-use percentage)
- Microphones and audio equipment
- Memory cards, hard drives, and cloud storage
- Computer or laptop used for editing
Equipment costing $300 or less can be claimed as an immediate deduction. Items over $300 are depreciated over their effective life, or you may be eligible for the instant asset write-off for items up to $20,000 if you are a small business entity.
Software and Subscriptions
- Video editing software (Adobe Premiere Pro, Final Cut Pro, CapCut Pro)
- Photo editing tools (Lightroom, Photoshop)
- Scheduling and management tools (Later, Notion, Asana)
- Cloud storage (Google Drive, Dropbox)
- Music licensing subscriptions (Epidemic Sound, Artlist)
Props, Backgrounds, and Wardrobe
- Props purchased specifically for content (not general personal items)
- Backdrops and set dressing
- Clothing and accessories worn exclusively for content — though the ATO applies strict rules here. Everyday clothing is not deductible, even if you only wear it on camera. Only items that are clearly costumes or occupation-specific may qualify.
Home Office Expenses
- If you film or edit at home, you can claim home office expenses using the ATO’s fixed rate method (70 cents per hour for the 2024–25 income year onwards) or the actual cost method
- Dedicated studio or filming space — if you have a room used exclusively for UGC work, a portion of rent, electricity, and internet may be deductible
Phone and Internet
- Business-use percentage of your mobile phone plan
- Business-use percentage of your home internet
- Keep a logbook for four weeks to establish your business-use percentage
Other Deductible Expenses
- Accounting and tax agent fees
- Business insurance
- Marketing and portfolio website costs
- Travel expenses for on-location shoots (if the travel is primarily for business)
- Courses and training related to content creation or business skills
- Postage and shipping for product returns
If you are also creating content for your own YouTube channel, our guide on tax for YouTubers in Australia covers additional platform-specific deductions.
ABN Registration for UGC Creators
If your UGC creation is a business (not a hobby), you should register for an Australian Business Number (ABN). An ABN allows you to invoice brands properly, avoid having tax withheld at the top marginal rate (which happens when you do not quote an ABN), and register for GST when required.
Registering for an ABN is free through the Australian Business Register. Most UGC creators register as sole traders, which is the simplest business structure. For a step-by-step walkthrough of the registration process, see our ABN registration guide — the process is the same for UGC creators.
GST for UGC Creators
You must register for GST once your annual GST turnover reaches $75,000. GST turnover includes all your assessable income from UGC work, not just profit.
Once registered for GST, you must:
- Charge 10% GST on your invoices to Australian clients
- Lodge Business Activity Statements (BAS) — either quarterly or monthly
- Claim GST credits on your business purchases
- Keep tax invoices for all purchases over $82.50 (including GST)
If most of your clients are overseas brands, the GST treatment differs. Supplies of services to overseas clients are generally GST-free, but you should seek advice on how this applies to your specific arrangements.
Even if your turnover is below $75,000, you may choose to register voluntarily. This allows you to claim GST credits on business purchases, which can be beneficial if you are investing heavily in equipment.
Record Keeping Requirements
The ATO requires you to keep records of all business income and expenses for five years. For UGC creators, good record keeping means:
- Income records — Invoices issued, payment confirmations, and bank statements showing all payments received (including PayPal and international transfers)
- Expense records — Receipts for all business purchases, subscription confirmations, and home office logbooks
- Gifted product records — Documentation of all products received, their market value, and the terms of the arrangement
- Asset records — Purchase dates, costs, and depreciation schedules for equipment
- Vehicle and travel logbooks — If you claim travel for on-location shoots
- Contracts and agreements — Brand deals, retainer agreements, and usage rights contracts
Use accounting software such as Xero or MYOB to track income and expenses throughout the year. This makes tax time significantly easier and ensures you do not miss legitimate deductions.
International Payments and Foreign Income
Many UGC creators work with overseas brands and receive payments in USD or other foreign currencies. Here is what you need to know:
- Exchange rates — Convert all foreign income to AUD using the exchange rate on the date you received the payment (or the average rate published by the RBA for the income year)
- W-8BEN form — If you work with US-based brands or platforms, you will likely need to submit a W-8BEN form. This form certifies that you are not a US tax resident. Under the Australia-US tax treaty, this can reduce US withholding tax from 30% to 0% on independent contractor income. Use your Australian Tax File Number (TFN) on the form.
- Foreign income tax offset — If tax is withheld overseas, you may be entitled to a foreign income tax offset to avoid being taxed twice on the same income
- PayPal, Wise, and Payoneer fees — Transaction fees and currency conversion charges on business payments are deductible
All foreign income must be declared in your Australian tax return, even if tax has already been withheld overseas.
Income Averaging for UGC Creators
UGC creators whose income varies significantly from year to year may be eligible for income averaging as a “special professional” under the ATO’s rules. This concession is designed for individuals who use personal skills in creative or artistic work, including those who create content for film, video, or digital media.
Income averaging spreads your taxable professional income over the previous four years, which can reduce your tax liability in a high-earning year. To be eligible, your taxable professional income must exceed $2,500 in the first year you apply. Speak with your accountant about whether your UGC work qualifies — our creative freelancer tax guide explains how income averaging works in more detail.
Below are the most common questions about UGC creator tax Australia.
Frequently Asked Questions
Do I need to declare income from gifted products?
Yes. If you receive products in exchange for creating content — even if there is no explicit requirement to post — the ATO considers the market value of those products to be assessable income. Keep a record of all gifted items and their retail value.
Can I claim clothing I wear in UGC videos as a tax deduction?
Generally, no. The ATO does not allow deductions for conventional clothing, even if you only wear it for filming. The item must be a costume, uniform, or occupation-specific clothing (such as protective gear) to qualify. A branded t-shirt you also wear casually would not be deductible.
When do I need to register for GST as a UGC creator?
You must register for GST once your annual GST turnover reaches $75,000. This includes all your business income, not just profit. You can register voluntarily before reaching the threshold if you want to claim GST credits on business purchases.
How do I handle payments in USD from overseas brands?
Convert all foreign payments to AUD using the exchange rate on the date you received the payment. Lodge a W-8BEN form with US-based platforms to reduce withholding tax to 0% under the Australia-US tax treaty. All foreign income must be declared in your Australian tax return.
What is the difference between a UGC creator and an influencer for tax purposes?
There is no difference for tax purposes. Both are treated as self-employed individuals earning assessable income. The same rules around ABN registration, GST, deductions, and income declaration apply regardless of whether you create content for brands to use (UGC) or post to your own audience (influencing).
Can I do UGC creation as a side hustle while employed full-time?
Yes. Many UGC creators start while working full-time. You still need an ABN if it qualifies as a business, and you must declare all UGC income in your tax return alongside your employment income. Your employer’s PAYG withholding will not cover tax on your UGC earnings, so set aside approximately 30% of your UGC income for tax, or arrange PAYG instalments with the ATO.
Get Expert Help With Your UGC Creator Tax
At Count Out Loud, we specialise in tax for content creators, freelancers, and creative professionals across Australia. Whether you are just starting out as a UGC creator or managing a growing portfolio of brand deals, we can help you structure your business, maximise your deductions, and stay compliant with the ATO.
Call us on (02) 9043 1525 to book a consultation with a creative industry tax specialist.