Business vs Work Related Expenses

As seen in Woopi News November 2025

Do you have a side hustle? In our modern economy, a lot of people work a regular job and then run a small business as a side hustle. How you provide the income and expenses for each activity to your accountant matters.

We often find that clients provide all their information lumped together as they think that it all just goes in their tax return, so it doesn’t matter, but income and expenses that relate to employment go into a different section of the tax return than income and expenses that relate to activities under an Australian Business Number (ABN).

It is important to keep these records separately, so that you can provide your accountant details on which expenses are incurred in earning your wages and which are incurred earning your ABN income.

Sometimes this is very simple, as your employment activity may be completely different from your business activity, so the expenses belong to one or the other but where the activities are similar, and the same item may be used both for work and the business. In this case, it should be apportioned according to the item’s percentage of use for each income activity, and maybe, percentage of personal use as well depending on the expense. i.e. you may use your mobile phone for work, business and private. 20% of its use for work, 15% of its use for business, and 65% of its use for private. We would then claim 20% of your mobile phone costs, against your employment income and 15% against your ABN income.

Providing your work and business income and expenses separately helps us to prepare your tax return accurately and efficiently without having to ask as many questions.