Influencer Payment Regulations in

Australia

Playbook

The most common payment method used to pay influencers in Australia is PayPal and bank transfers.

In Australia, invoicing comes with specific rules. While registered businesses must issue invoices, it's worth noting that even unregistered individuals, such as sole traders, can issue invoices in some cases, though limitations may apply.

For Australian influencers, if they want to invoice clients in other countries, they may need to register for GST, even if it is not mandatory for their local turnover. This requirement is triggered when making sales to overseas customers. Influencers need to grasp these international invoicing and taxation regulations. For issuing invoices and applying the reverse charge rules, the business needs to be VAT or GST-registered. You may read more about reverse charge here.

In Australia, businesses may outsource invoicing operations to a third party or the customer if certain circumstances are met. You may use self-billing if the parties have agreed to use self-billing before issuing the invoice. The agreement should preferably be in writing and specify the terms applicable to the self-billing invoice.

As a general rule, gifts are considered to be a form of compensation, and influencers should therefore always report the value of gifts, free travel, and vouchers to their tax authorities. The taxable value is usually based on the commercial value of the gift, travel, or voucher.

It is not uncommon for companies to be legally required to report to tax agencies when they pay out compensation to an influencer. Influencer partnerships are quite different from regular partnerships, compensation may not only include monetary compensation but also gifts, vouchers, and travel. In some countries, all types of compensation sent for “payment” to the influencer should be reported. Therefore, it may be relevant to verify your reporting responsibilities on that matter.

The Australian Taxation Office (ATO) looks closely at income generated by influencers, including any gifts the influencer might receive in return for brand promotion. Both businesses and influencers may need to obtain specific taxation advice before entering these commercial agreements.

As an influencer, your income may be foreign-sourced. No matter where your income comes from, it needs to be declared. Income is more than just money and may come in different forms, including:

• Cash;
• Tips and gratuities (sometimes described as gifts);
• Collaborations with other content creators;
• Payments from platforms like YouTube or Twitch;
• Products you’ve been given to promote like clothing or make-up;
• Fees for appearing at events;
• Fees or payments from others licensing your content.

‍Exchange of income statements to other countries.

As mentioned above, it is not uncommon for companies to be legally required to report to tax agencies when they pay out compensation to an influencer. This obligation may also be applicable if you are working with an influencer from another country. Many countries sign bilateral agreements in which they agree to exchange income statements with each other. This allows tax agencies around the world to have a better overview of the compensation paid out to the people conducting business in their country and better control over who should pay taxes or not. The exchange of income statements is especially relevant when paying out compensation to individuals without a registered activity. It is therefore important to verify your reporting obligations in your country.

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Additional responsibilities - social fees, withholding of taxes, more

Before drafting an agreement with an influencer, it is important to consider if the person has a registered activity as an influencer or a company. If the influencer is acting as an individual without any registered activity, it is essential to be aware of applicable rules and regulations, as you may have additional responsibilities towards the individual. It is important to understand what legal obligations apply to you. In Australia, you may for example have withholding responsibilities or be required to pay social costs while working with unregistered individuals. It is important to be fully aware of all the responsibilities before drafting any agreement with an influencer as you may be able, depending on the applicable laws and regulations, to put some of the responsibilities onto the influencer if it is clearly stated in the agreement. If an unregistered influencer chooses to go through an agency or talent to manage their work, the agency may be liable for any withholding or paying super for the influencer. There are also special rules regarding withholding on “performing artists”. An Australian-based company may have to withhold an amount of tax from payments to performing artists who are Australian residents contracted to perform in a promotional activity. You can read more about “performing artists” and promotional activity here.

It is also important to consider any potential liabilities arising from the agreement. As such, the responsibility of each party should be clearly described in the agreement and preferably regulate topics such as the payment of indirect and direct taxes, reporting to tax authorities, or even social costs.

In most countries, influencer marketing is already regulated by national laws such as consumer protection and marketing laws or specific guidelines.

Considering influencers can reach consumers globally, examining legal implications in various countries is important. Violating the rules can lead to penalties, fines, and legal fees.

It's important to note that there are topics that are usually more strongly regulated within influencer marketing. These commonly include:

• Children and minors.
• Alcohol, religious beliefs, adult content, tobacco, cosmetic procedures, gambling products, and in certain countries politics.

Work on this is progressing quickly both on a national and a global level. It would therefore be wise to keep yourself updated on new laws and guidelines being issued on the topic.

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Influencer marketing regulations in Australia

Since the beginning of 2023 in Australia, the Australia Consumer and Competition Commission (ACCC) has been tracking down influencers and content creation on social media. The ACCC has received more than 150 tips from the public, mainly about beauty, lifestyle, fashion, and parenting influencers not disclosing affiliations. TikTok, Instagram, and YouTube are the main platforms for influencers to conduct their activity and therefore the ACCC is looking into brands and advertisers involved in not disclosing paid advertising. The goal is to protect consumers from misleading promotions in the digital space, and the ACCC may take enforcement actions if necessary. This lies in the interest of the consumers as consumer law also applies to social media since many businesses use social media channels like Facebook, Twitter, and YouTube to reach out to customers and promote their products and services.

The same rules that apply to all advertising and promotions apply to social media, including:

• A business’s posts on its own social media accounts;
• Advertising on other social media platforms;
• Social media posts that a business pays for;
• Social media posts that a business offers incentives to influencers to make.

The ACCC has informative guidelines on this topic about social media promotions (here) and about the ACCC investigations on social media influencers (here).

Alongside this, in February 2021, the Australian Association of National Advertisers (AANA) introduced a new “Code of Ethics” to ensure legal and honest advertising. This applies to various media, including social platforms like Instagram, Twitter, and TikTok. It's especially relevant for social media influencers who must clearly disclose sponsored content in compliance with the code.

You can read more about this at the AANA website (here)

Risk of false self-employment

If you are looking to collaborate with independent workers, it is essential to treat them as such. Influencers working independently should be treated differently from employees. It is crucial to provide them with creative and personal freedom, allowing them, for example, to choose and determine their own activities and working hours. To prevent a relationship that could be seen as an employment relationship, it is imperative to draft a clear agreement between the two parties. If the relationship is too close to an employment relationship, it may be viewed as false self-employment. This may come with legal implications for the brand. Without an unambiguous agreement, a clear distinction is not always easy; both influencers and those who use them are often unaware of how the relationship can be viewed by the authorities.

As a rule of thumb, the more instructions you give regarding the services to be performed and the more the person is bound to your organization, the more likely it is that an employment relationship exists. Also, the relationship should also be independent in facts not only on paper. This should allow for a successful collaboration. In the case of false self-employment, the brand or agency may be responsible for paying employer fees and social costs for the influencer.

In Australia, if you are looking to hire talent or an influencer for a campaign, it is important to consider whether to hire them as an employee or contractor. If you get it wrong, you could be engaging in what is known as ‘sham contracting’ (false self-employment). For businesses doing collaborations, it is important to ensure that your relationship with the influencer is as unambiguous as possible. It is important to make sure that the agreement that is established is fair and offers them the autonomy to choose their own activities and working hours. The Australian Fair Work Ombudsman has an informative guide on differences between employees and contractors, and the effect of “sham contracting”. You can find it here.

An Agreement can take many forms and does not necessarily have to be in writing. However, it’s usually recommended to sign a written Agreement with the digital creator before they start to work on a project. We recommend having a legal professional review the agreement before it's signed, to ensure that it covers all the necessary legal aspects relevant to the relationship at hand. It may be relevant to define the following points in the agreement:

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1. Define Compensation Structure and Amount

Begin by specifying the type and amount of compensation the influencer will receive for their services. This can be a flat fee, commission-based, or a combination of both. Be transparent about the compensation structure and ensure that the influencer understands whether they are considered an employee or an independent contractor, as this has tax implications.

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2. Regulatory Requirements

To prevent legal issues when working with influencers, businesses must make sure their agreements clearly state which law is applicable, and that influencers must follow Australia's consumer laws and best practice guidance. These laws, found in the Competition and Consumer Act 2010, include rules against misleading conduct and false representations about products or services.

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3. Outline Payment Schedule and Currency

Establish a clear payment schedule that details whether the influencer will receive a one-time payment or multiple installments. Also, specify the currency in which payments will be made, and discuss potential fluctuations in exchange rates to avoid confusion or disagreements.

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4. Specify Payment Terms for Content Creation and Sharing

One important consideration is whether payment should only be made upon delivery of the post or if there should be two separate fees, one for creating the content and another for sharing it upon approval by the Brand. Clearly state these terms in your agreement to ensure both parties understand when and how payments will be made for each aspect of the influencer's work.

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5. Detail Payment Methods and Third-Party Involvement

Outline the method of payment, whether it's PayPal, wire transfer, or through a third party. If you're using a third-party service provider, such as Gigapay, to handle payouts and reporting, include this information in the agreement. This helps set expectations and ensures the influencer knows who will send the payment and when to expect it.

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Want to know more about influencer partnership agreements? Use this guide to ensure your agreements cover all essential aspects and foster long-lasting, mutually beneficial relationships with your influencers.