If you sell online coaching programs, digital courses, or subscription memberships to Australian and overseas clients, your income is taxable in Australia — even if you receive payment through international platforms like Kajabi, Teachable, or Thinkific. Many coaches build six-figure businesses before ever thinking about their tax structure, which is exactly when it becomes expensive. This guide covers every key tax question for online educators and coaches, including the GST trap that catches most creators off guard.
Do I Need an ABN?
Yes. Once you are selling programs, packages, or memberships with the intention to profit, you are running a business — not a hobby. You need an ABN regardless of:
Without an ABN, businesses paying you may be required to withhold 47% of your fees. Register as a Sole Trader initially — company and trust structures become relevant as income scales.
- Whether you have another job or income source
- The size of your coaching income
- Whether your clients are in Australia or overseas
What Counts as Taxable Income?
The following are all assessable income you must declare:
Even if a client pays in USD or EUR and the money sits in a Stripe or PayPal account overseas, it is AUD-assessable income once you have derived it. Exchange rate at the date of receipt applies.
- One-on-one coaching packages and retainers
- Group programs and masterminds
- Online course sales (single purchase or payment plans)
- Monthly and annual membership subscriptions
- Digital product sales — workbooks, templates, planners
- Affiliate commissions from recommending products or tools
- Sponsorship income from podcast or YouTube channels associated with your coaching business
The GST Question Most Coaches Get Wrong
GST registration is mandatory once your annual turnover exceeds $75,000. For coaches selling high-ticket programs, this can happen in one launch cycle.
The Overseas Platform GST Trap
Overseas platforms are not Australian platforms — but that does not make your income GST-free.
The key test is: are your CLIENTS based in Australia? If yes, GST may apply to those sales.
If your clients are predominantly overseas (i.e., the service is "consumed" outside Australia), these may qualify as Exported Services and be GST-free — but this must be assessed for each transaction type.
Many coaches assume all income is GST-free because the platform is overseas. This is incorrect and creates BAS risk.
Once registered for GST, you can also claim back the GST on your business expenses — software subscriptions, advertising, equipment — which reduces your net GST liability.
Deductions You Can Claim
Legitimate deductions reduce the income you pay tax on. For online coaches, common claimable expenses include:
The ATO distinguishes between expenses that are genuinely business-related and those that are personal with a tangential business connection. Keep clear records explaining the business purpose of each expense.
- Platform fees — Kajabi, Teachable, Thinkific, Circle monthly fees
- Payment processing fees — Stripe, PayPal transaction costs
- Course creation tools — video editing software, Canva Pro, design tools
- Recording equipment — camera, microphone, ring light, video backdrop
- Computer and tablet (business-use portion)
- Email marketing platform — ConvertKit, ActiveCampaign, Mailchimp
- Advertising — Meta Ads, Google Ads, YouTube Ads spend
- Coaching supervision, mentorship or masterminds directly related to your practice
- Professional development — courses and certifications directly relevant to your coaching niche
- Home office expenses if you work from home
- Bookkeeping and accounting fees
- Personal development courses with no direct link to your coaching business
- Gym membership or general wellness (unless your coaching niche is fitness)
- Meals and entertainment without a clear business purpose
- Clothing that can be worn outside of filming or events
Income Tax — What You Actually Pay
2025-26 Individual Income Tax Rates
$0 – $18,200: 0% (tax-free threshold)
$18,201 – $45,000: 16% on each dollar above $18,200
$45,001 – $135,000: 30% on each dollar above $45,000
$135,001 – $190,000: 37% on each dollar above $135,000
Over $190,000: 45% on each dollar above $190,000
Medicare Levy (2%) applies on most income above the low-income threshold.
For coaches earning $100k–$200k+ in net profit, the tax bill at personal rates becomes substantial. This is where business structure starts to matter significantly.
Company vs Sole Trader — When Does It Make Sense?
Structure Planning Guide
Under $80k net profit: Sole Trader — simple and low cost
$80k – $150k net profit: Review your structure — tax savings from a company may be emerging
Over $150k net profit: Company (25% rate) vs personal rates of up to 47% — meaningful annual savings
Note: PSI (Personal Services Income) rules may apply if your income is derived entirely from your own skills and effort — this limits certain income-splitting strategies but does not eliminate the tax rate benefit of a company
PAYG Instalments — Plan for Quarterly Tax
Once your tax liability exceeds a certain threshold, the ATO will require quarterly PAYG Instalment payments. This means you pay income tax throughout the year rather than in one lump sum at lodgement time. Planning your cash flow for these quarterly obligations — typically 20–25% of revenue set aside — avoids a painful surprise in October.
General information only
This article provides general tax information only and does not constitute personal tax, legal, or financial advice. Tax rules can change and individual circumstances vary.
If you would like advice based on your situation, please get in touch with the practice.
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