Cashback platforms like Cashrewards can be great for sourcing — but the income side has real tax implications.
The ATO's position on cashback depends on context. For personal purchases, cashback from Cashrewards or ShopBack is generally treated as a discount on the purchase price rather than income. But when you're using cashback platforms as part of a business — buying stock for resale and receiving cashback on those purchases — the treatment changes.
In a business context, cashback received on purchases of trading stock is likely assessable income, or alternatively reduces the cost base of the stock. Either way, it affects your tax position and needs to be accounted for properly.
The simplest approach is to treat cashback as a reduction in your cost of goods sold. If you buy an item for $50 and receive $5 cashback, your effective COGS for that item is $45. This means you'll pay slightly more tax on the profit from that sale (because your COGS is lower), but it's accurate and straightforward to account for.
Alternatively, you can declare cashback as a separate line of income. Either approach is acceptable to the ATO, but you should be consistent in whichever method you choose. Discuss with your accountant which approach works best for your specific situation.
This is where it gets tricky. Cashback platforms don't always credit cashback immediately — there can be delays of weeks or months. You need a system to match cashback receipts to the original purchases. Most resellers find it easiest to maintain a simple log that records the purchase date, the retailer, the purchase amount, and the expected cashback amount. When the cashback is confirmed and paid, update the log.
For resellers making dozens of purchases per month through cashback platforms, this tracking can become time-consuming. It's one of many reasons that purpose-built reseller bookkeeping tools are valuable — they can help automate the reconciliation process.
Keep screenshots or exports from your Cashrewards/ShopBack account showing confirmed cashback amounts. These serve as evidence for the ATO if your accounts are ever questioned. Combined with purchase receipts from the retailers themselves, you'll have a complete record of your actual cost base for each item. For more on reseller record keeping, see our reseller tax guide.
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