Tax for Indie Game Developers in Australia

If you build and sell games in Australia, the money you make is taxable. It does not matter whether you sell through Steam, itch.io, the Epic Games Store, the App Store or Google Play, or whether you are a solo developer working nights or a small studio. Once you are creating games with the intention of earning income, the ATO treats you as running a business, and your profit must be declared. This guide explains how indie game developer tax works in Australia.

Game development is a slow burn: months or years of costs before a single sale. The good news is that the tax system is built to handle exactly that, and getting the structure right early can save you a lot of money and stress.

Is Indie Game Income Taxable?

Yes. If you sell a game to make money, you are generally running a business as a sole trader (unless you have set up a company). Your sales, minus your allowable expenses, are your taxable profit. That profit is added to any other income you earn for the year and taxed at your individual marginal rate, with the standard tax-free threshold of $18,200 applying across your total income.

If development is genuinely just a hobby with no real intention to profit, it may not be taxable, but the moment you list a game for sale and start earning, the ATO will usually consider it a business.

How Indie Developers Get Paid

Game income can arrive from several places, and all of it counts:

• Storefront sales. Steam, itch.io, Epic, GOG, the App Store and Google Play.
• In-app purchases and DLC. Microtransactions, cosmetics, expansions and season passes.
• Ad revenue. Especially for free mobile titles.
• Crowdfunding. Kickstarter or similar pledges are generally assessable income when received.
• Grants and contract work. Screen Australia or state grants, and paid work building games or assets for others.

Remember that platforms take a cut (Steam's 30%, for example) before they pay you. You declare the amount you actually receive, and the platform fee itself is a deductible expense.

Handling USD and Overseas Payouts

Most storefronts pay in US dollars. Your Australian return must be in AUD, so convert each payout using the exchange rate on the date you received it, or use the ATO's average annual rate. If a platform withholds US tax, completing a W-8BEN form and claiming the Australia–US treaty benefit usually reduces that withholding, and any foreign tax you do pay may be claimable as a foreign income tax offset.

What Indie Game Developers Can Claim

Running a game business means you can claim the costs of making and selling your game:

• Development hardware such as your PC, laptop, test devices and consoles (depreciated if over $300)
• Engines and software like Unity, Unreal, Godot licences, Blender add-ons, IDEs, and version control
• Marketplace assets including art packs, models, music, sound effects and plugins bought for your game
• Contractors and freelancers you pay for art, audio, QA or code
• Store and developer fees such as Steam Direct, the Apple and Google developer program fees
• Marketing including trailers, festival submissions, press kits and paid ads
• Home office running costs via the home office deduction, plus internet and the business share of electricity
• Learning like courses, tutorials and reference books that build your development skills

GST and the $75,000 Threshold

If your total business turnover reaches $75,000 in a financial year, you must register for GST. Sales made to overseas customers through international storefronts can be treated differently to Australian sales, which gets technical fast. If you are near the threshold, get advice before you register so you handle it correctly. Our GST guide for creators covers the basics.

Carrying Losses Forward

Because development often runs at a loss for a year or two before release, it is worth knowing that business losses can sometimes be offset against your other income, or carried forward to reduce tax when your game finally sells. The rules (the non-commercial loss rules) have conditions, so this is an area where advice pays for itself.

Frequently Asked Questions

Do I pay tax on money I make from selling a game?

Yes. Once you sell a game with the intention of making money, your net profit is assessable income and must be declared in your Australian tax return. It is taxed at your individual marginal rate along with any other income you earn.

Is Steam or App Store income taxable in Australia if the money comes from overseas?

Yes. As an Australian tax resident you are taxed on your worldwide income, so payouts from Steam, itch.io, the App Store or Google Play are assessable even though they are paid by a foreign company in US dollars. Convert each payout to AUD using the rate on the date you received it.

Can I claim the cost of Unity, Unreal or asset packs?

Yes. Software subscriptions, engine licence fees, marketplace assets, plugins and tools bought to build and ship your game are deductible business expenses. Larger one-off items such as a development PC are usually depreciated over time if they cost more than $300.