Are you part of the ‘Sharing Economy’? We explain what it is, where it’s headed, and how to make it work for you.

Whether it’s helping someone move their fridge to a new apartment via Airtasker, having a backpacker spend a night in your spare room with Airbnb, or minding someone’s puppy for a few days through Mad Paws, it’s never been easier to pick up some extra cash.

These platforms and more are part of the ‘sharing economy’.

While there’s no concrete definition for the sector, the Australian Treasury explains that the sharing economy usually works by a “consumer and online seller getting into contact with each other and entering into an agreement for the online seller to provide a service and/or good online and then payment by the consumer being facilitated by the platform”.

Australia’s sharing economy was worth approximately $15.1 billion in February 2017, with an estimated 10.8 million Australians predicted to earn extra money from sharing economy services from July to December 2017.

With the number and range of platforms growing and barriers to entry falling, there’s never been a better time to earn yourself a slice of the sharing economy pie.

Three tips to help you make the most of your time in the sharing economy

1. Define your goals

Like any new undertaking, the key to making the most of the sharing economy is asking yourself what you want to get out of it.

While it can help you make some quick, easy cash, the sharing economy can also be the perfect way to dip your toes in a potential new side business.

Whether your passion lies in graphic design or dog sitting, a sharing economy platform can help you find your first clients and build up your skills and reputation, which you can eventually use to spin out your own business.

This means you can ultimately take control of your own work – without having to pay a third-party platform a slice of commission.

2. Understand your tax obligations

According to the Treasury, as the sharing economy grows, there’s an increasing risk that people selling goods and services via sharing economy platforms may not be paying the right amount of tax.

One of the reasons for this could be that sellers are often classified by platforms as independent contractors or self-employed principals, rather than traditional employees. This means that, unlike a traditional employer, a platform may not be withholding tax from the income it pays out to a seller.

Sellers may also think that the money they make from sharing economy platforms isn’t taxable because it’s simply ‘hobby income’, or that they don’t have to pay tax because they’re not really earning from a platform regularly.

But whether you’re driving for Uber every night or once a month, it’s important to keep track of how much you’re earning through these platforms and how much it all adds up to when combined with income from your other work.

It’s also important to consider whether you want to put a portion of what you’re earning aside to contribute to your super. Again, because sellers are often classified as independent contractors or self-employed principals rather than traditional employees, a platform may not have to contribute to their super.

Generally, traditional employees earning $450 or more before tax in a calendar month must have 9.5% of their ordinary time earnings contributed to their super by their employer.

An accountant will be able to help you put the right amount away for your tax and super each month.

3. Get the right protection

No one likes to think the worst, but accidents happen – so it’s important to make sure you’re protected.

Some sharing economy platforms have their own insurance policies to cover sellers and consumers. It’s important to find out if you’re adequately protected by a platform’s insurance cover. Take some time to research and determine what jobs and situations are covered and what isn’t.

It may also be worthwhile exploring whether you may need additional cover tailored to your situation, for added peace of mind.

We're here to help

If you need help understanding how much to set aside for your super, or whether you need voluntary insurance cover, you can get simple advice over the phone or face to face. It’s included as a part of your membership so there’s no extra cost.