eBay accounting: Taxes for selling on eBay and ATO regulations
Kaci Carson
January 11, 2024
As an eBay seller based in Australia, reporting your income and expenses to the tax authority, Australian Tax Office (ATO), is required to stay compliant with your eBay taxes. However, managing your accounting does not have to be a tedious process, especially if you utilize tools that integrate with eBay. Accounting platforms that connect directly to your eBay account can help streamline record keeping and tax reporting obligations.
By automating the import of sales, fees, and payout information, eBay accounting integrations provide an accurate, up-to-date overview of your eBay business finances. For Australian eBay sellers, these types of purpose-built integrations simplify ATO compliance and save time, effort, and potential penalties come tax season.
Tax obligations for eBay Sellers in Australia
As an eBay seller, your income may be taxed as either personal income or business income depending on whether you sell as an individual or registered business. Business sellers must report income and may be obligated to pay income tax or corporation tax.
If your annual eBay revenue exceeds $75,000, you are required to register for an Australian Business Number (ABN) and charge Goods and Services Tax (GST) on all taxable sales. GST is Australia’s sales tax. According to eBay’s tax policy, GST should be included in the price prior to it being won/bought. You are responsible for calculating, collecting and remitting GST.
It is also important for business sellers to be aware of other taxes like Fringe Benefits Tax (FBT), depending on your business structure. To understand all of your tax obligations and eBay sales tax as a business owner, we recommend you consult with your tax advisor or an accountant that is familiar with ATO requirements for online sellers. With organization and the right professional guidance, you can establish the appropriate structure for your eBay business and meet necessary compliance standards.
ATO record keeping requirements in Australia
The ATO requires all Australian taxpayers, including eBay sellers, to maintain records of income and expenses to properly report their taxes. As an eBay seller, you must keep records of your relevant eBay tax documents, such as each transaction, including final sale prices, shipping costs, returns, and eBay fees. The ATO recommends keeping invoices, receipts, bank statements, profit and loss statements, and payment summaries from eBay.
These records should be organized and available to reference for your tax return at the end of the financial year. Here are some of the recommended eBay tax documents:
- eBay sales and invoices – Keep records of all completed transactions, sale prices and buyer information.
- eBay fees – Maintain payment summaries from eBay detailing your monthly fees to deduct expenses.
- Shipping costs – Keep receipts and invoices for all shipping and handling fees charged to buyers.
- Cost of goods sold – Retain invoices for any products you have purchased to resell on eBay.
- Income statements – Generate monthly income statements in your accounting software summarizing revenue and expenses to track your business profitability.
With well-maintained bookkeeping records, eBay sellers in Australia can maintain compliance and confidently report taxes knowing they have the adequate data for their returns. Although record keeping may seem complex, establishing good habits and the right tools early on can save time and effort in the long run.
How accounting integrations help
In the process of record keeping for your eBay storefront, it is vital to maintain best practices in the recording of your data. As your store continues to grow in both sales and in offerings the necessity for an accounting integration becomes more relevant.
By connecting your accounting platform to your eBay account through Amaka’s integration, you can automatically import sales and payout data to streamline reporting and ensure ATO compliance. Connecting eBay to accounting software like Xero, automatically syncs your eBay transactions giving you access to all your data in one place.
This gives you access to detailed records and overall simplifies the tax reporting process while also streamlining the process of reconciling your transactions. With an integration, your bookkeeping will be highly organized and provide real-time insights into your business’s financial performance.
Steps to set up the eBay integration to Xero, QuickBooks or MYOB
Setting up the eBay + Xero, eBay + QuickBooks Online and/or eBay + MYOB integration is a simple, 2-minute process. Follow the steps below to get started:
- Register or sign in to the Amaka dashboard to get started.
- Click the New integration button.
- Select eBay + Xero, eBay QuickBooks Online or eBay + MYOB from the integrations list to commence the setup.
- Click the Connect new account button underneath the eBay logo.
- Sign in to your eBay account and follow the guided authentication process to grant all relevant permissions.
- Authenticate your Xero account following the same procedure.
- Click Save + Continue.
- Follow the wizard to choose your preferred setup method, mapping, and scheduler options to complete the setup of the integration.
- Click Save + Continue to finish and activate the integration.
After completing the setup, the new integration will be listed on the app dashboard and can be viewed or edited.
Amaka offers a Guided setup option as well if you’d prefer one of our Integration Specialists walk you through the entire process. Schedule a free, 30-minute, 1-on-1 Zoom call at whatever time suits you to get started.
Key takeaways on eBay taxes and accounting
Staying updated with the latest tax regulations and seeking professional guidance when needed can help ensure compliance and avoid potential fines. By adopting a proactive approach to accounting and taxation, Australian eBay sellers can grow and manage their business to its fullest potential.