Affiliate marketing looks simple from the outside: you share a link, someone buys, and a commission lands in your account. The tax side has more moving parts, especially once commissions start arriving from overseas networks in US dollars.
This guide covers the tax rules for affiliate marketers in the 2025-26 and 2026-27 years: whether you are in business, ABNs, the $75,000 GST threshold, GST on overseas commissions, converting foreign income, records and deductions. Each rule was checked against ATO business guidance and other ATO pages in October 2026.
It is written for bloggers, creators and side hustlers earning commissions from Australian or overseas programs. If you have not set up your registrations yet, start with our ABN basics guide.
Key takeaways
- If your affiliate activity is repeated, organised and aimed at profit, the ATO is likely to treat it as a business.
- GST registration is required once GST turnover reaches $75,000 a year.
- Commissions from a non-resident not in Australia can be GST-free, unless the service is provided to another entity in Australia.
- Convert foreign income at the rate when it is derived or received, or an average rate where allowed.
- Without an ABN, Australian payers may withhold 47% from payments over $75.
- Keep most business records for 5 years.
Affiliate marketing tax at a glance
| Issue | Rule | Source |
|---|---|---|
| Hobby or business | Intention, profit prospects, scale, repetition and business-like conduct | ATO are you in business |
| ABN | Needed if you are carrying on a business | ATO and ABR |
| No-ABN withholding | 47% on payments over $75 excluding GST, unless a supplier statement applies | ATO withholding if ABN not provided |
| GST registration | Required at $75,000 GST turnover | ATO registering for GST |
| Overseas commissions | Can be GST-free exports of services if conditions are met | ATO exports and GST, GSTR 2004/7 |
| Foreign currency | Rate at the earlier of derived or received, or an average rate | ATO translation rules |
| Records | Most kept for 5 years, in English or easily converted | ATO record keeping |
Source: ATO are you in business, ATO registering for GST, ATO exports and GST, ATO translation rules, checked 7 October 2026.
How does affiliate marketing work?
A merchant pays you a commission when someone you refer buys, signs up or completes another action. You share a tracking link on your website, social channels or email list, and a network or the merchant records the sale and pays you, often monthly.
Many programs are run from overseas and pay in US dollars. That matters for GST and for converting your income, so note who each contract is with and which currency it pays in. Be clear with your audience that you earn a commission from your links.
Is your affiliate income a hobby or a business?
The ATO looks at several business indicators:
- whether you intend to be in business
- whether you intend to, and have a prospect of, making a profit
- whether the size or scale of the activity is enough to make a profit
- whether the activities are repeated and continuous
- whether you plan, organise and run the activity in a business-like way, such as keeping records, using a separate bank account, advertising and using an ABN
A March 2026 ATO update notes that one-off transactions or no intention to make a profit can point away from a business. Most people who build a site or channel to earn commissions month after month are likely to be in business. Even if you are not, the ATO says you may still need to declare some payments as assessable income.
Do you need an ABN and a business name?
If you are carrying on a business, you can apply for an ABN through the Australian Business Register. Many networks ask for one before paying you. If an Australian business pays you and you do not quote an ABN, it may have to withhold 47% from payments over $75 excluding GST, unless a supplier statement applies.
If you trade under a name other than your own, you will usually need a registered business name. To protect a brand you are building, see our guide to securing a trademark.
When do you register for GST, and is GST charged on overseas commissions?
You must register for GST when your GST turnover reaches $75,000, per the ATO registration rules. Turnover is measured across all your business activities. The ATO says you must include export sales connected with Australia in GST turnover, even though they are GST-free. Our GST registration service and GST registration guide explain the steps.
Once registered, the GST treatment of each commission depends on who you supply the service to:
| Who pays the commission | Likely GST position once registered |
|---|---|
| Australian merchant or network | Taxable: GST of 1/11 of the GST-inclusive amount applies |
| Non-resident not in Australia when the service is supplied | Can be GST-free as an export of services |
| Non-resident, but the service is provided to another entity in Australia | Not GST-free unless an exception applies |
The ATO exports and GST page says a service can be GST-free when supplied to a non-resident who is not in Australia when the supply is made. Under GSTR 2004/7, that supply is not GST-free if it is provided to another entity in Australia, unless an exception applies. Check the contract for each program before you decide.
How do you convert commissions paid in foreign currency?
Under the ATO translation rules, you convert foreign currency income using the exchange rate at the earlier of the time it is derived and the time it is received. In many cases you can use an average rate instead, and the ATO publishes monthly and yearly average rates. If any income was taxed overseas, our foreign income tax offset guide explains how credits work.
What records and deductions apply?
The ATO says you need to keep most business records for 5 years, in English or able to be easily converted. Keep network statements, invoices, payout records, exchange rates used, and receipts for every expense.
As a business you can claim expenses that relate to earning your affiliate income, such as hosting, software, advertising and equipment, with private use apportioned. Our sole trader deductions guide covers the detail. Your net profit is taxed at your marginal rates along with your other income.
Worked example: a creator with Australian and US commissions
Priya runs a cooking blog as a sole trader. In 2025-26 she earns AUD $18,000 from an Australian network and USD $12,000 from a US network. For illustration, assume she converts using an average rate of AUD $1 = USD $0.64.
- US commissions in AUD: $12,000 / 0.64 = $18,750
- Total affiliate income: $18,000 + $18,750 = $36,750
- Expenses: hosting and software $1,200 + camera written off $1,500 + 40% of $960 internet ($384) = $3,084
- Net business income: $36,750 – $3,084 = $33,666
Her GST turnover of $36,750 is below $75,000, so she does not have to register for GST. She reports the $33,666 net income in her individual return.
Rule of thumb: check your GST turnover every month once commissions pass a few thousand dollars, and look at who each contract is with before you register. The answer decides whether you charge GST on that income.
Common mistakes affiliate marketers make
- Assuming it is a hobby: regular, organised activity aimed at profit is usually a business.
- Counting only one program: GST turnover includes all your business income.
- Charging GST on everything: some overseas commissions can be GST-free.
- Using today’s exchange rate for last year: use the rate when income was derived or received, or a permitted average rate.
- Mixing personal and business spending: a separate account makes records and deductions easier to prove.
FAQ about affiliate marketing tax in Australia
Is affiliate income taxable in Australia?
Yes, in most cases. If your affiliate activity is a business, the commissions are business income and you report them in your tax return along with your expenses. Even if you are not in business, the ATO says you may still need to declare some payments as assessable income. Keep every commission statement and bank record.
Do I need an ABN for affiliate marketing?
You need an ABN if you are carrying on a business, and many affiliate programs ask for one. If an Australian business pays you without an ABN being quoted, it may have to withhold 47% from payments over $75, excluding GST, unless you give a supplier statement. A hobby with no profit motive does not need an ABN.
When do I have to register for GST as an affiliate?
You must register when your GST turnover reaches $75,000 a year. GST turnover counts business income from all your activities, not just one affiliate program, and it includes GST-free export sales connected with Australia. You can also register voluntarily below the threshold, which lets you claim GST credits on business purchases.
Do I charge GST on commissions from overseas affiliate networks?
Often not. A service supplied to a non-resident who is not in Australia when the supply is made can be GST-free. However, GSTR 2004/7 explains that the supply is not GST-free if it is provided to another entity in Australia, unless an exception applies. Check who the contract is with and who receives the service.
How do I convert US dollar commissions into Australian dollars?
Use the exchange rate at the earlier of when the income is derived and when it is received. Regulations also let you use an average rate in many cases, and the ATO publishes monthly and yearly average rates. Record the rate you used and apply the same approach consistently across the year.
Talk to specialist before it costs you
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Talk to a registered tax agent
Nanak Accountants can set up your ABN and GST, review your overseas affiliate contracts and prepare your return. Call 1300 626 258 or book a free 15-minute discovery call.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO business indicators, GST registration, exports and GST, GSTR 2004/7, foreign currency translation, ABN withholding and record keeping pages on 7 October 2026. Rates and thresholds change, so confirm the current position before acting.
