Escort tax – Getting your ATO income and work-related deductions right
By Mayfair Confidential
Escort tax – Getting your ATO income and work-related deductions right

Given tax time is just around the corner, we thought it be a good idea to reach out to Empire Industry Finance in order to give you the best possible head start on tax deduction as well as giving you an update on current tax requirements and obligations in Australia.

  • So tell us a little about Empire Industry Finance and the services that you have provided to adult service providers since 2017?

Empire Industry Finance is a boutique accounting firm for the adult entertainment industry and other cash-based industries such as tattoo, photography, and alternative arts. We are run by past and present industry workers who recognise the importance of offering confidential and non-judgmental service to help clients feel at ease. We specialise in end-to-end, flexible, and personalised financial services for small to medium enterprises, individuals, and not for profit organisations.

  • Have there been any recent updates on tax requirements and obligations for adult providers in Australia?

There have not been any updates lately for the adult industry but with the rise of Only Fans there’s been a lot of incorrect tax advise circulating and it’s important to speak to an accountant to make sure you’re doing the right thing by your taxes. As Only Fans is an overseas company you aren’t required to pay GST on income made, even if you are required to register for GST for your business.

  • What are some of the major tax deductions that an adult service provider / sex worker / escort can claim this financial year?

Deducting work related expenses is pretty straight forward, if the item or service is only used for work purposes it’s typically able to be deducted but if it crosses over into your personal life it’s not. For instance, fake eyelashes worn for shows are deductable however permanent eyelash extension appointments are not deductable as you can’t take them off once you’re done working. Things such as stage make up, costumes and heels, marketing, advertising, computer, and admin costs can all be deductions. If you work from home you can claim the percentage used for work of rent, utility bills, water power and gas

  • Is the total cost of advertising in the adult industry tax deductable?

Yep! All costs incurred in promoting your business are claimable. Including branded merchandise, photoshoots, event or expo fees and any website or subscription fees. Same with travel costs, when travelling for work purposes the cost of accommodation and flights are deductable. If the trip is part business part personal you can only claim the part that relates to work.

  •  If you could give us the biggest ‘do’ and the biggest ‘don’t’ when it comes tracking income and expenses over a financial year? Is keeping receipts for expenses still a thing?

As a sole trader you must keep your own records of your income and work-related costs. Bookkeeping with an accounting program such as Xero is a great way to easily track of your expenses which is something that we can help with. For our clients, we use Dropbox which they can upload photos of receipts and expenses to whenever they want.

Biggest do is keeping work and personal bank accounts separate. Having a business bank account and card used for all work income and expenses makes tax time so much easier.

Biggest don’t for not only tracking income and expenses, but life in general, is completely ignoring your finances and not being prepared to pay your tax. As annoying as taxes can be they are inevitable, and you’ll thank yourself for staying on top of things rather than letting it slip.

  • When it comes to tax returns, what would you say is the difference between a simple, standard and complex return? Do you have different price points to accommodate different needs? Are these fees tax deductable?

Our tax return tier breaks down like this:

Simple – Someone who is on salary or wages with minimum deductions, or a small business could also fall into this category if there is minimal work needed to file the return.

Standard – Suits someone who works a civvy job as well as having a side hustle or has a medium size business.

Complex – Someone who has a medium to large business, has employees, needs to pay GST, or just has more complex accounting needs.

There are different price points, ranging from $299 to $899 depending on the package chosen and any additional services needed. All accounting fees are tax deductable!

  • While you are based in Victoria, do you also offer booking and accounting services to adult service providers across Australia?

While the majority of the Empire team live in Melbourne and around rural Victoria, we service clients across Australia as well as internationally. We are a primarily cloud-based firm and offer remote as well as in person meetings, we’re continually building on the way our business operates in line with our company values and the changing needs of our clients.

Want to know more? Contact the team at Empire Finance here for a free 15 minute chat