A Statement by a Supplier is a tax form that can be used when paying someone who is a hobbyist.
The form allows the person or business who is paying the artist or creative not to withhold tax.
Only a genuine hobbyist can use a Statement by a Supplier form.
A hobbyist is someone whose motivation or expectation for creating or participating in art is not to make a profit. It is different from operating a business.
Not sure? Learn more about hobbyists: creativity for the love of it
A business cannot pay an artist or creative as a hobbyist because it would mean less paperwork for them or as a way to avoid unfair contract laws.
An artist or creative cannot pretend to be a hobbyist just because they prefer how tax is dealt with that way.
Statement by a Supplier and ABNs
Having an ABN means you are carrying on or starting up a business. This includes working for yourself as an independent contractor. Many hobbyists will not be entitled to an ABN because they do not intend to make a profit from their creative hobby as a business activity.
If you have an ABN for business activities:
- You cannot use a Statement by a Supplier for any work you would ordinarily do under that ABN. For example, if you have an ABN to do work as an illustrator, you cannot use a Statement by a Supplier for illustration work.
- You can use a Statement by a Supplier for any work you do that is different from the work you would normally do under that ABN. For example, if you have an ABN to work as an illustrator, you can use a Statement by a Supplier to record guest vocals for an album if you sing as a hobby.
In practice:
A support act for folk and fiddle night
Bernie is an up-and-coming fiddle player. She has played a number of gigs in local venues.
She has started to earn some money and has recently obtained an ABN to help play at larger venues and to grow her profile as a professional player.
Big Exciting Local Folk Club ask her to perform as a special guest at their monthly club night. She agrees.
‘Terrific, just fill out this Statement by a Supplier form. It’s how we pay all our folkies,’ the club treasurer says.
Big Exciting Local Folk Club cannot pay Bernie as a hobbyist because Bernie is carrying on a business, shown by her ABN and intention to play professionally for income.
A beautiful prop for a stage production
Karim makes beautiful paper sculptures alongside his day job as a software engineer.
Big Exciting Local Theatre Company asks him to make a paper lobster as a table centrepiece for the dinner party scene in their upcoming production.
‘Sure,’ Karim says, ‘but I don’t normally sell them. I just make them for the love of it.’
‘That’s okay,’ says the production manager. ‘If you don’t have an ABN, we can pay you as a hobbyist. Think about what you would charge to make a lobster and let us know.’
Big Exciting Local Theatre Company can suggest to Karim that he charge them as a hobbyist because he has no intention to make a business out of his creative work and has no ABN.
More in this section:
Hobbyists: creativity for the love of it
Pursuing a hobby is different from running a business or having a job. Hobbyists can make money from their art, but it isn’t the main reason they do it.
