Tax for Dog Walkers in Australia — ATO Basics for Sole Traders (2026)

Dog walking income is taxable in Australia. You declare it as a sole trader in your personal tax return each year, you pay at your marginal rate, and there is no PAYE employer withholding it throughout the year for you. Here's a plain-English walkthrough of what that means in practice.

1. Your Income Is Assessable Income

Every dollar you receive for dog walking, dog sitting, overnight boarding, or any associated pet care service is assessable income under the Income Tax Assessment Act 1997. The ATO does not exempt hobby income or casual side-hustle income — if you received money for a service, it goes on your return.

Where it goes in your tax return: You declare business income and expenses under the "Business and professional items" section of your individual tax return (whether you lodge via myTax, a tax agent, or your accountant). Net profit — income minus deductible expenses — is added to any other income you have and taxed at your marginal rate.

No employer is withholding tax for you. Unlike employment where your employer runs PAYG withholding every pay cycle, as a sole trader you receive your full booking amount and are responsible for setting aside the tax yourself. This is the most common cash-flow trap for first-year walkers: spending the full amount you earn and being surprised at tax time.

A useful rule of thumb: if dog walking is your primary income, set aside approximately 25–30% of each payment for tax. If it's supplementary income on top of employment, the marginal rate on the extra income could be higher depending on your total combined income — set aside more.

2. You're a Sole Trader — What That Means Practically

Being a sole trader means:

• You and your business are legally the same entity
• All business debts and obligations are your personal responsibility
• Your business income is declared on your personal tax return (not a separate company return)
• You don't pay yourself a salary — you simply withdraw money from the business as you need it

There's no requirement to have a separate business bank account as a sole trader, but having one makes record keeping dramatically easier. It means you can run an income/expense report at any time without manually filtering personal transactions.

3. PAYG Instalments

PAYG instalments are the ATO's mechanism for collecting tax on business income throughout the year, rather than in one lump sum after you lodge your return.

Here's how you enter the system: in your first year of dog walking, you lodge your tax return at the end of the financial year (by 31 October if self-lodging, or your tax agent's schedule if using one). If your total tax liability from business income in that year exceeded approximately $1,000, the ATO will automatically register you for PAYG instalments for the following year.

Once registered, you'll receive an activity statement each quarter asking you to pay an instalment amount — essentially a prepayment toward the following year's tax bill. The ATO calculates the instalment amount based on your previous year's income. If your income changes significantly (up or down), you can vary the instalment amount, but be careful: if you vary it down and your actual income ends up higher, you may face a GDP adjustment penalty.

The practical impact: If your dog walking income is meaningful, expect to be paying quarterly PAYG instalments from your second year onwards. Budget for it.

4. Deductible Expenses

As a sole trader, legitimate business expenses reduce your assessable income. Only expenses incurred in earning your business income are deductible — personal costs are not.

What dog walkers can generally deduct:

Insurance premiums Your public liability insurance premium is fully deductible. If you have a combined personal-and-business policy (e.g., a car insurance policy that covers both private and business use), only the business-use proportion is deductible.

Phone costs Your mobile phone is likely used for both personal and business purposes — taking booking enquiries, communicating with owners, running the TruePath app, using GPS during walks. Estimate what percentage of your total phone use is business-related and deduct that proportion of your bill. Keep a one-month usage log to justify your percentage if audited.

Pet first aid course The cost of a pet first aid course is directly related to your capacity to provide safe dog walking services, making it a deductible business expense. Keep the receipt and the certificate.

Equipment and supplies Leads, poop bags, water bottles, collapsible bowls, treat pouches, first aid supplies, and similar consumables are deductible. If you purchase a higher-cost item like a quality running vest or a crossbody walker's bag, the same principle applies — business-use items are deductible.

Vehicle costs (if applicable) If you drive between clients — picking up dogs from their homes and driving to a park, or driving from one client to the next — that travel is a business expense. The ATO has two methods for claiming vehicle costs:

• Cents per kilometre method: Claim a flat rate (currently 88 cents/km for 2025–26) for up to 5,000 business kilometres per year. Simple, no logbook required.
• Logbook method: Keep a logbook for at least 12 continuous weeks recording all trips (date, distance, purpose). Calculate what percentage of your total vehicle use is business-related. Apply that percentage to your total vehicle running costs (fuel, registration, insurance, depreciation, servicing). This method can yield a higher deduction if your business-use percentage is high, but requires the logbook records.

Note: travel from your home to your first client and from your last client home is generally considered private travel, not deductible. Travel between clients during the work day is business travel.

Platform fees and subscriptions Any fees paid to TruePath or other platforms as a service fee or subscription are deductible business expenses.

Training and professional development Courses, workshops, or books directly related to improving your dog walking or pet care skills are deductible.

Feature	Expense	Deductible?	Notes
Public liability insurance	Yes — fully deductible	Keep the invoice/receipt
Phone bill	Yes — business % only	Log usage for one month to support your %
Pet first aid course	Yes — fully deductible	Keep receipt and certificate
Leads, poop bags, water bottles	Yes — fully deductible	Minor equipment and consumables
Vehicle — between clients	Yes — logbook or cents/km	Not home-to-first client or last client-home
Platform fees (TruePath etc.)	Yes — fully deductible	Verify amount in platform dashboard
Dog treats used on walks	Yes — if used for client dogs	Keep reasonable records
Personal clothing	No	Generic clothing is not deductible even if worn on walks
Branded work jacket	Possibly	If clearly branded and not suitable for everyday wear, may be deductible — seek advice

5. Record Keeping

You don't need accounting software. A spreadsheet works. What you need to maintain:

• A record of every payment received (date, client, service, amount)
• A record of every business expense (date, supplier, description, amount)
• Receipts for every expense (digital copies are fine — photograph paper receipts and save them in a folder)
• If claiming vehicle expenses via the logbook method, your logbook records
• Bank statements showing the transactions (your platform dashboard will cover most income records)

The ATO requires you to keep records for five years from the date you lodge your tax return. Digital records stored in cloud storage are acceptable.

6. GST

Goods and Services Tax (GST) registration is a separate obligation from income tax, and one that most dog walkers will never need.

The rule: Register for GST if your annual turnover from all business activities equals or exceeds $75,000.

At current Australian average walking rates, $75,000/year requires roughly 42–45 one-hour walks per week, every week of the year. Most full-time walkers work below this, and part-time walkers are well below it.

If you're under $75,000: No GST obligation. You don't add GST to your invoices, you don't collect it, and you don't lodge a BAS. Your tax obligation is simply income tax declared in your annual return.

If you cross $75,000: You have 21 days from when you reasonably expect to reach the threshold to register for GST with the ATO. Once registered, you add 10% GST to your prices, collect it from clients, and remit it to the ATO quarterly via a Business Activity Statement. You can also claim GST credits on your business purchases.

7. Lodging Your Tax Return

The Australian financial year runs 1 July to 30 June. Your tax return for each year is due by 31 October if you lodge it yourself through myTax. If you use a registered tax agent, they have an extended lodgement schedule (typically to May of the following year).

myTax is the ATO's free online lodgement tool, available through myGov. It pre-populates income from employment and some platform sources. You'll need to add your sole trader income and expenses manually.

ATO Tax Clinics provide free tax help for eligible individuals — if your situation is straightforward and you can't afford a tax agent, check whether there's a clinic near you at ato.gov.au/taxclinics.

When to use an accountant: If your income is substantial, your expense claims are complex (particularly vehicle costs or home office claims), or you're uncertain about your obligations, a registered tax agent costs $150–$400 for a typical sole trader return and will often find deductions that more than cover the fee.

What to Set Aside Each Month

Here's a practical framework for setting aside tax as you earn:

These are marginal rates applied to income in each bracket, not flat rates on total income. If your dog walking earnings are in the $45–135k range when added to other income, setting aside approximately 32–35% of each payment keeps you safe.

Frequently asked questions

Do I need to lodge a separate business tax return as a dog walker?

What if I forgot to declare dog walking income in a previous year?

How do I know if the ATO has put me on PAYG instalments?

Can I deduct the cost of my own dog's food or vet bills?

Is there a minimum income below which I don't need to declare dog walking earnings?

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