Thinking about using your car, home or personal skills to make some extra cash over summer? Before you do, make sure you understand what’s involved.
The ‘sharing economy’ refers to the sharing of goods, skills or services for a fee, usually facilitated by a third party through a website or app.1 In recent years, it’s revolutionised how we book holidays, get around town, source help – and even earn money. So how can you aim to profit in this new economy?
Get in the driver’s seat
Uber is the most popular ride-share service. Over one million Australians have downloaded the Uber app, so they can connect with a driver whenever they need a ride.2
To become an Uber driver yourself, you must own or have access to a four-door car in good condition. You also need to be at least 21, have a full driver’s licence and provide proof of insurance, as well as undergoing a background check.
Like any other worker, you’ll have to pay tax. You’ll also need to get an Australian Business Number (ABN) and be registered for Goods & Services Tax (GST) – regardless of how much you earn from driving.3
Your payment rate includes a base fare, plus time and distant rates, minus a fee for Uber. You’re responsible for paying for petrol, tolls, vehicle registration and appropriate insurance cover, plus depreciation and any repairs your car needs.4 Some of these expenses may be tax-deductible, so be sure to keep records like statements of earnings, receipts and logbooks.
My home is your home
Got a spare room, an unused granny flat or a vacant holiday apartment? If so, you could join thousands of other Airbnb hosts in Australia, who rented their properties to over 2.1 million guests in 2015–16.5
To become a host, simply register on the Airbnb website or app, take some attractive photos of your space and list its price, your house rules and any selling points – like air conditioning, a pool or nearby attractions.
Potential guests will then contact and pay you through the website or app. You’ll also need to clean the space regularly, and arrange to meet your guests to provide keys and instructions.
Many body corporates are anti-Airbnb – and noisy guests could make you a pariah in your neighbourhood. And while Airbnb offers Host Protection Insurance, you should check that your home and contents insurance covers damage caused by paying guests.
Unlike Uber, there’s no requirement to register for GST, but you’ll have to pay tax on your Airbnb income. This could be up to 47% (including Medicare levy) of what you make, so keep receipts of your eligible expenses which can be used to claim a tax deduction and reduce your taxable income. And remember, renting your home means you could be hit with a capital gains tax bill if you sell it later.
A master of trades?
Another potential money spinner is to rent out your skills on Airtasker. This could involve anything from designing a website to packing boxes or assembling furniture – all for a fee. Sometimes the fee is fixed by the person offering the job; other times you can negotiate.
Airtasker then takes a 15% service fee from what you earn, and you’ll also need to get an ABN and pay tax on your earnings.
With Airtasker’s public liability insurance, you might be protected if you injure someone or damage their property on the job. But this doesn’t cover all activities, personal injury or loss or damage of your own equipment – so be sure to get your own insurance too.
Talk to Jason Cook, Financial Adviser
If there’s a particular aspect of your finances that you need guidance on, Jason can help you understand your options and provide you with a plan to help you become financially secure.
Jason Cook, Financial Adviser, WB Financial ABN 67 118 833 168 and Authorised Representative of Financial Wisdom Limited ABN 70 006 646 108 AFSL 231138
Phone 07 3391 7199 or email email@example.com.
1 Australian Taxation Office, The sharing economy and tax, 2017.
2 Roy Morgan Research, The Uber phenomenon, 2016.
3 Australian Taxation Office, Ride-sourcing and tax, 2017.
4 Deloitte Access Economics, The sharing economy and the Competition and Consumer Act, 2015.
5 Deloitte Access Economics, Economic effects of Airbnb in Australia, 2017.
This page contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to Jason Cook, Financial Adviser, and read the relevant Product Disclosure Statement (PDS) before making a financial decision.
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