The names 'Tupperware', 'Lorraine Lea Linen', and 'Chefs Toolbox' often remind people (especially women) of an evening with friends buying high quality products which are more expensive than what you would get in stores, but are also of much higher quality. These types of direct selling companies offer commissions to their sales force in return for them actively selling the products.
In the last 12 months here in the office, we have had two staff members who have taken up these opportunities so there has been some discussion about when it is no longer classed as a hobby but is a business and so the income needs to be declared. Income in this example is the commission that is earned off sales, not the total sales amount.
There is a list of questions on the ATO website which help to determine whether the activity you are undertaking is a business or a hobby. They are questions regarding the goal of the activity, manner in which it is undertaken and the characteristics of the activity.
(For the full list of questions visit: this website )
If you are operating as a hobby, the income you earn from the activity is tax-free and does not need to be declared in your tax return. If you are operating as a business, then you need to declare the income but it also means that you can claim deductions against that income as well. You may also be required to register for GST if your income is over $75,000. You can only claim losses from the activity if it is a business and meets the business tests for claiming non-commercial losses Find out more by clicking here
In summary, it can be worthwhile finding a way to earn some extra money â€" especially if it is tax-free. Also, be sure to do your research and understand if it will be a business or a hobby and what your reporting requirements will be.