For educational purposes only. Not tax, legal, or financial advice. Tax laws change frequently. Consult a registered tax agent or CPA for your specific situation.
Self-employed students in Australia face the same tax obligations as any other sole trader: ABN registration, annual tax return lodgement (mandatory if carrying on a business), and quarterly BAS if GST-registered. For 2025-26, the tax-free threshold is $18,200, HELP/HECS compulsory repayments begin at $67,000 of repayment income (which includes net business profit), and most student businesses fall below the $75,000 GST registration threshold unless they do rideshare work.
Last reviewed:
Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact ATO. Read our editorial scope →
Being a student does not change your tax rate, your ABN obligations, or your BAS deadlines. If you are carrying on a business (not just casual employment), you must lodge a tax return even if your income is below the tax-free threshold or you made a loss. The critical interactions are with HELP/HECS (where self-employment profit counts toward the $67,000 repayment threshold) and Youth Allowance (where business income reduces your payment once it exceeds the income-free area). Most student businesses sit under the $75,000 GST threshold, but rideshare drivers must register for GST from the first dollar regardless of turnover.
The reality this serves
University and TAFE students running a sole trader business alongside study. Tutoring, freelance web development, graphic design, social media management, Uber driving, or Airtasker tasks on an ABN. Balancing the $18,200 tax-free threshold against HELP/HECS repayment income, Youth Allowance means testing, scholarship exemptions, and the GST registration question. Student status changes nothing about the tax rules: the obligations are identical to any other sole trader.
HELP/HECS interaction with self-employment income
Compulsory HELP repayments are calculated on 'repayment income', not just wages. Repayment income includes taxable income (which captures net business profit from your sole trader activity), plus net investment losses, reportable fringe benefits, reportable employer super contributions, and certain exempt foreign employment income. For 2025-26, compulsory repayments only apply once repayment income exceeds $67,000. If your combined salary and business profit push you over this threshold, the ATO calculates the repayment percentage on the entire amount and adds it to your tax assessment. Self-employment profit from a student business counts toward the threshold in exactly the same way as salary from an employer.
HELP repayment income includes taxable income (covering net business profit), assessed on the annual tax return.(Higher Education Support Act 2003 s 154-10; ATO HELP repayment guide)
ABN obligations and sole trader status
A student can apply for an ABN and operate as a sole trader where the activity is genuinely a business or independent contracting (not disguised employment). Indicators include invoicing multiple clients, providing your own tools, controlling how and when you work, and bearing financial risk. As a sole trader, you lodge one individual tax return with a business schedule covering business income and expenses. No PAYG tax is withheld from your business income automatically, so you must set money aside and may enter the PAYG instalments system if your prior-year tax liability is high enough. If your activity is a hobby rather than a business, you are not entitled to an ABN, cannot claim deductions, and do not declare the income.
Youth Allowance and Austudy income testing
Services Australia means-tests Youth Allowance and Austudy against personal income (including business income) and, for dependent students, parental income and assets. Your business income reduces your payment once it exceeds the income-free area. The assessment usually relies on your tax return and current-year income estimates provided to Centrelink. Underreporting business income to Centrelink is a compliance risk with debt recovery consequences. If your business has a genuinely low or negative profit in a given period, report the actual figure: losses reduce assessed income for Centrelink purposes.
GST: most students under threshold, rideshare the exception
GST registration is compulsory when your GST turnover reaches or is projected to reach $75,000 in a 12-month period. Most student businesses (tutoring, freelance design, small Airtasker jobs) will be well under this threshold. Voluntary registration below $75,000 allows you to claim GST credits on business purchases but requires charging 10% GST on invoices and lodging quarterly BAS. The critical exception is taxi travel and ride-sourcing (Uber, Ola): these must register for GST from the first dollar of turnover, regardless of how small. If you do any rideshare work, your GST registration applies to all activities under the same ABN.
Ride-sourcing services are treated as taxi travel. The $75,000 GST threshold is disapplied and GST registration is compulsory from the first dollar.(A New Tax System (Goods and Services Tax) Act 1999 s 144-5)
Allowable expenses in context
Student sole traders claim deductions under the same rules as every other business (ITAA 1997 s 8-1). The critical judgement is apportioning shared costs between private use, study use, and business use. Computer and tablet: if shared between university study and business, depreciate or instant asset write-off, then claim only the business-use percentage. A laptop used 40% for business, 40% for university, and 20% personal yields a 40% business deduction. Internet and phone: apportion based on reasonable estimates or usage records (call logs, data usage reports). Only the business portion is deductible. Home office running costs: if you tutor clients from your bedroom or do freelance design work from a desk at home, apportion running costs (electricity, heating) by floor area and time used for business. Study time in the same space is not business use. Platform fees and commissions: Uber, Airtasker, Upwork and similar platform commissions are fully deductible business expenses. Professional development: courses and materials directly related to your current business activity (not your university degree) may be deductible. Your university tuition is not a business deduction; it is covered by HELP/HECS. NOT deductible: university tuition fees (these are a HELP debt, not a business expense), textbooks for your degree, commuting to campus, personal clothing, meals while studying.
Support schemes
Scholarship exemption (ITAA 1997 s 51-10)
Eligibility: Full-time students at a school, college or university receiving a scholarship, bursary, educational allowance or similar educational assistance. The payment must be principally for educational purposes and not disguised remuneration for services.
Youth Allowance (student)
Eligibility: Full-time students aged 18 to 24 (or 16 to 24 if independent). Subject to income test, assets test, and (for dependent students) parental means test. Self-employment income is assessable under the personal income test.
Low Income Tax Offset (LITO)
Eligibility: Available to all Australian resident individuals with taxable income below the relevant thresholds. No separate application required.
Frequently asked questions
Do I need to lodge a tax return if my student business made a loss?+
Yes. If you carry on a business in Australia, you must lodge a tax return regardless of whether you made a profit or a loss, and regardless of whether your total income is below the tax-free threshold. The loss may be available to offset against other income (such as wages from a casual job) in the same year, subject to the Division 35 non-commercial loss rules. If you only had employment income with no business activity, the lodgement obligation depends on whether your taxable income exceeds $18,200.
Does my self-employment income affect my HELP repayments?+
Yes. HELP compulsory repayments are based on repayment income, which includes your taxable income (covering net business profit from sole trader activity). For 2025-26, compulsory repayments only kick in once repayment income exceeds $67,000. If your combined salary and business profit stay below $67,000, no compulsory repayment is triggered. But if a particularly good business year pushes you over, the repayment percentage applies to the entire repayment income amount, not just the excess.
Is my scholarship taxable if I also run a business on an ABN?+
It depends on the scholarship, not on your business activity. Scholarships meeting the conditions in ITAA 1997 s 51-10 (full-time student, payment principally for educational purposes, not disguised remuneration) are exempt from income tax. Running a business on an ABN does not change the scholarship's exempt status. The scholarship amount is excluded from assessable income entirely: it does not count toward the tax-free threshold, HELP repayment income, or your business profit calculation.
Can I claim my university fees as a business expense?+
No. University tuition fees are a HELP/HECS debt, not a business expense. Self-education expenses are only deductible where the course directly relates to your current income-earning activity and maintains or improves specific skills used in that activity. A computer science degree that leads to freelance web development work does not qualify while you are still studying: the degree is establishing your qualifications, not maintaining skills you already use to earn income. Courses directly improving your existing business skills (a short course on a framework you already use commercially) may qualify.