Running a business from home and your legal obligations in Australia

Running a business from home is one of the cheapest ways to test an idea in Australia. You avoid a commercial lease, keep overheads down, and can start trading while the business is still small. But the address on your invoices does not change the law that applies to you. A home-based business is still a business, and it picks up most of the same obligations as one operating from a shopfront: council planning rules, tax registrations, the Australian Consumer Law, privacy and spam laws, and, as soon as you hire anyone, employment and work health and safety duties.

The good news is that most of these obligations are straightforward for a small operator, and none of them require you to become a lawyer. This guide sets out who each obligation applies to, what you actually have to do, and what happens if you do not do it, so you can work through the list before your first sale.

Who these obligations apply to

The obligations attach at different points, and a few have thresholds that decide whether they apply to you at all. Work through this list to see where your business sits:

Premises approvals: council planning rules, and any lease, mortgage or strata by-laws, apply to the property itself. There is no turnover threshold. If you trade from the home, they apply to you.
GST: you must register once your GST turnover reaches $75,000 in a 12-month period, or earlier if you choose to register voluntarily.
Australian Consumer Law: applies to anyone supplying goods or services to consumers in trade or commerce. It bites from your very first sale, with no size threshold.
Privacy Act: generally applies only to businesses with annual turnover above $3 million, but carve-outs catch smaller operators, including businesses that handle health information, provide health services, or trade in personal information.
Spam Act: applies to any commercial email or text message with an Australian link, whatever your size.
Employment and WHS: obligations start the moment you engage your first worker, even a part-time casual, with no headcount threshold.

Get the right to use your home for business

Before anything else, confirm that you are actually allowed to run the business from the premises. This is the obligation most home businesses overlook, because nothing happens automatically and the rules sit in three separate places.

Council planning rules

In most states and territories, planning schemes allow low-impact home businesses through a category usually called a "home occupation" or "home business". These categories come with conditions designed to protect the residential character of the area, typically covering the number of customer visits, signage, noise, parking, hours of operation and how much of the home the business can use.

Some activities fall outside those categories. Depending on your state and council, preparing food for sale, running beauty or hairdressing services, light manufacturing, or keeping stock for an online store can require development consent, a permit, or a separate registration such as food business registration. The only reliable way to know where you sit is to check your council's planning scheme and ask the planning department early, before you invest in fit-out or stock. Operating without the approval you need can lead to fines, stop orders and orders to cease trading.

Lease, mortgage and strata approvals

If you rent, your lease may restrict business use or require the landlord's written consent, and some leases set conditions on client visits, signage or parking. Get the consent in writing and keep it, because a verbal arrangement is hard to prove later.

If you own the property with a mortgage, check the loan terms. Some lenders restrict commercial uses they consider risky, particularly ones that increase foot traffic or liability.

If the home is in a strata scheme or community title, check the by-laws. By-laws commonly restrict business activity, deliveries, visitor access and signage, and many schemes require the owners corporation's written approval even for quiet, online-only operations. Breaching a by-law can expose you to fines from the owners corporation and an order to stop the activity.

Register for tax and business names

Once the premises are sorted, set up the registrations that let you invoice, pay tax and trade under your chosen name.

Apply for an ABN

An Australian Business Number (ABN) is the identifier you will use for invoicing, business banking and tax. Most home businesses are eligible to apply through the Australian Business Register, and the application is free. You will also need the ABN when you register for GST.

Register your business name

If you trade under a name other than your personal name, for example "Luna Home Bakery" rather than "Luna Nguyen", the name must be registered with ASIC through the business names register. Before you commit to a name, search the register and the trade mark database for anything confusingly similar, because a registered business name does not by itself stop someone else using the name as a trade mark.

Register for GST

You must register for GST once your GST turnover reaches $75,000 in a 12-month period, and you can register voluntarily below that. Once registered, you add 10% GST to most sales and pass that amount to the ATO through your activity statements. Failing to register when you are required to can mean paying GST out of your own pocket plus penalties, so it is worth working out your turnover projection before you start.

Sell honestly under the Australian Consumer Law

The Australian Consumer Law (the ACL), which sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth), applies to home businesses exactly as it applies to large retailers. Section 18 of the ACL prohibits misleading or deceptive conduct in trade or commerce, which covers the claims on your website, your social media posts, your product descriptions and your pricing. It is not a defence that you did not intend to mislead anyone; the question is whether the conduct is likely to mislead.

The ACL also imposes consumer guarantees on everything you sell. Goods must be of acceptable quality, match their description, and be fit for the purpose you advertised them for, and services must be carried out with due care and skill. Your refund and repair practices need to match those guarantees, not just your own store policy, and any warranty you offer must comply with the ACL's requirements.

The penalties are serious. For a contravention of the misleading conduct provisions, a company can be ordered to pay the greater of $100 million, three times the benefit it obtained from the conduct, or 30% of its adjusted turnover during the breach period, and an individual can be ordered to pay up to $2.5 million. Even where penalties are not pursued, a customer can take action against you for losses caused by misleading conduct.

Handle personal information under the Privacy Act

If your business collects personal information such as names, email addresses, phone numbers or purchase details, the Privacy Act 1988 (Cth) and its Australian Privacy Principles (the APPs) set out how you must handle it. The Act generally applies to businesses with annual turnover above $3 million, but the exceptions matter for home businesses: if you provide health services or handle health information, you are covered regardless of turnover, as are credit reporting businesses and anyone who trades in personal information. Many online-only home businesses also collect customer data, so check whether you fall in.

If you are covered, the APPs require you to collect only what you need, tell people what you are collecting and why, keep the information secure, and give people access to their own information on request. In practice that means a privacy policy that is easy to find, sensible data retention, and basic security such as limited staff access and secure storage for customer databases and email lists.

The stakes went up in 2024. A serious or repeated interference with privacy can now attract a penalty for a body corporate of the greater of $50 million, three times the benefit obtained, or 30% of adjusted turnover, and $2.5 million for an individual. Other interferences with privacy carry a maximum of 2,000 penalty units, currently around $660,000, and the OAIC can also investigate complaints and require you to change your practices.

Follow the Spam Act for marketing emails and texts

The Spam Act 2003 (Cth) regulates commercial electronic messages sent to an Australian link, which means almost any marketing email or text a home business sends. Three requirements apply to every message: the recipient must have consented to receive it, the message must accurately identify who sent it, and it must include a functional unsubscribe facility that you honour promptly.

Consent can be express, such as a sign-up box, or inferred from an existing business relationship, but it cannot be assumed just because someone visited your site. Keep records of how and when consent was given. The regulator, ACMA, has taken enforcement action against small operators, and the Federal Court can order civil penalties for each contravention, so it is cheaper to build consent into your sign-up forms from day one than to fix a mailing list later.

Meet employment and work health and safety duties

Hiring even one worker brings your home business inside the Fair Work system. You must pay at least the award rate or the national minimum wage, currently $24.10 per hour from 1 July 2024, plus superannuation, issue pay slips, keep records, and provide the leave and other entitlements in the National Employment Standards. Getting the classification right matters: a person engaged as a casual or contractor can in some circumstances be found to be an employee, with back-pay and penalty exposure.

Work health and safety law also applies to your home. As the person conducting the business or undertaking, you owe a duty to everyone your work affects, including family members, contractors and customers who visit. That duty covers the obvious risks like faulty equipment, chemicals or electrical leads, but also the less obvious ones such as ergonomics for yourself and any staff, and safe access for visitors. If customers come to your home, think about what they touch and where they walk.

What happens if you get it wrong

The consequences vary by area, but they share a pattern: regulators can investigate without waiting for a customer complaint, and the penalties are not trivial:

Consumer law: penalties up to $100 million for a company or $2.5 million for an individual for misleading conduct, plus customer claims for loss.
Privacy: up to $50 million, three times the benefit, or 30% of adjusted turnover for a serious or repeated interference with privacy, and up to $2.5 million for an individual.
Spam: civil penalties ordered by the Federal Court for each contravention, plus corrective action required by ACMA.
Planning: council fines, stop orders, and orders to stop operating until approval is obtained.
Employment: Fair Work Ombudsman investigations, court-ordered penalties and back-pay for underpayment, often with interest.
WHS: prosecution of the business and, in some states, of individual officers, with significant fines for breaches that cause serious harm.

A compliance checklist for starting out

Work through these steps before you take your first order, then review them once a year:

Confirm the premises: check the council planning rules, your lease or mortgage, and any strata by-laws, and get approvals in writing.
Apply for an ABN through the Australian Business Register.
Register your business name with ASIC if you trade under a name other than your own.
Project your turnover and register for GST if it will reach $75,000.
Put your terms of sale, refund process and website legals in place so your practices match the ACL.
Write a privacy policy and set up secure storage if you collect customer information.
Set up your marketing lists with consent records and unsubscribe facilities.
Prepare employment or contractor agreements before engaging anyone, and set up payroll, super and record keeping.
Check insurance: your home and contents policy may not cover business activities, so talk to your insurer about public liability and product cover.

When a lawyer can help

A lawyer is not needed for every step, but a short engagement early can save a much larger one later. A commercial lawyer can review your lease and by-laws before you commit, confirm your structure, and draft the contracts you will rely on: customer terms, a privacy policy, employment or contractor agreements, and non-disclosure agreements for anyone you share your plans with. Where your business sells to consumers, they can check your website claims and refund process against the ACL, and if your plans involve a regulated activity such as food, health or beauty services, they can map the approvals you need. Ask for a fixed-scope review rather than ongoing advice, and you will usually get a practical list of what to fix.

The approval most home businesses miss

If there is one step to do this week, it is the premises approval, because it is the obligation that never reminds you it exists. You will notice GST when your accountant asks, and the ACL when a customer complains, but nothing will tell you your by-laws require owners corporation consent, or that your council treats your meal-prep business as needing development consent, until a neighbour complains or a council inspector arrives. Check the three documents that control your address: the planning scheme, your lease or mortgage, and the strata by-laws, and get each approval in writing before you spend money on stock or branding. A lawyer can review those documents with you in a single session, and the answers will tell you whether your home is the right launchpad for the business at all.