Last updated: 1 March 2024

Legal Guide for Social Media Influencers – According to the ACCC, 81% of Australian Influencers surveyed may be breaking the law. And for Australian fashion influencers, the percentage is even higher at 96%!

These shocking results were published in April 2023 by the Australian Competition and Consumer Commission (ACCC) in their sixth interim report of the Digital Platform Services Inquiry. The ACCC said many of the issues identified in the survey concerned content that pushes the boundaries of Australia’s paid advertising rulebook and misleading endorsements and testimonials.

TLDR: Quick Summary of this Legal Guide

If you are a social media influencer, you MUST disclose if you are being paid through an affiliate program, sponsorship deal, paid partnership, or receiving any ‘benefit’ to promote products/services, including free items.
If you don’t disclose a sponsorship, you risk violating Australian Consumer Law and being fined by the ACCC. Both the ACCC and the ATO are now cracking down on influencers.
You can write off expenses related to your job as a social media influencer, but you must also declare income, including non-monetary compensation such as clothes, holidays, appliances and any ‘services’ you receive.
Social media influencers and brands hiring social media influencers need to have a signed Influencer Marketing Agreement in place.
An Influencer Marketing Agreement details the scope of any partnership, the brand style requirements, who owns the content, disclosure requirements, payment terms, how to handle disputes, etc.

If you are a social media influencer or are considering hiring a social media influencer, this legal guide is for you. Read on to understand the pros and cons of being an influencer, your legal responsibilities, and how to avoid trouble.

Click on any of the questions below to jump to that section of this legal guide.

Legal issues covered in this guide

If you still have a question after reading this legal guide, get in touch, as we’d love to keep adding your questions to this comprehensive guide.

If you want to be a social media influencer, there’s no definitive follower count required to establish yourself. Influence can vary widely depending on the niche, platform, and engagement rate. However, as a general guide:

Mega-influencers have over a million followers
Macro-influencers have 100,000 to a million followers
Micro-influencers have 10,000-100,000 followers
Nano-influencers have 1,000-10,000 followers

Nano and micro-influencers might have fewer followers, but they often have the highest engagement rates because it’s much easier for them to interact with an audience one-on-one.

How much do Australian influencers charge?

Australian influencers can typically charge these amounts per post, video or story:

Mega-influencers: $100 to $20,000 per post
Macro-influencers: $80 to $1,600 per post
Between mega and macro-influencer: maximum $4,800 per post, $2,900 per video and $1,000 per story

Alternatively, brands can also pay influencers a monthly fee of up to $12,000 for a specific number of monthly posts.

Do influencers have to disclose a promotional affiliate ad?

Yes, influencers do have to disclose a promotional affiliate ad. Failing to disclose affiliate-sponsored content could violate the law and result in a misleading or deceptive advertising fine. If you are an influencer, and you are being paid, given free products or services, or receiving any benefit to promote the product or service, it is vital that you are transparent and disclose any sponsored content to be on the right side of the law.

image of social media influencer disclosure hashtags

The easiest way to disclose a promotional affiliate ad or sponsored affiliate content is to prominently display a hashtag or label with your content, such as:

#ad
#gifted
#sponsored
#paidpromotion

Ensure the label is easy to read; don’t deliberately use a font that is too small to read or a colour that blends with your background. And stick to the well-recognised hashtags and avoid making up your own, like #sponcon or <ad>.

Do influencers have to disclose if they are paid?

Yes, influencers must disclose if they are paid or receive any benefit at all through affiliate programs, sponsorships or partnerships. Make note of the guidelines above and avoid vague disclosures, such as the following:

Thanking brands
Tagging brands in posts
Product placement in photos or videos
Using promotional/discount codes or website referral links in posts

What happens if I don’t disclose a sponsorship or benefit?

If you don’t disclose a sponsorship, you risk violating Australian Consumer Law’s transparency requirements and may face significant fines for misleading or deceptive advertising. Engaging in such advertising is a breach of the law. Not revealing sponsored content exposes you to legal penalties for this deceptive action.

Is there an Australian influencer marketing code of practice?

Yes, there is an Australian influencer marketing code of practice established by the Australian Influencer Marketing Council (AiMCO) in 2020. This voluntary code guides ethical and transparent practices in the industry, covering areas like fair disclosure, brand safety, and responsible content creation.

What are the government regulations on influencers?

Australian Consumer Law (ACL) is the most important legislation to be aware of. ACL is designed to protect Australian consumers and includes two critical regulations for influencers:

Mandatory Disclosure of Sponsored Content: Influencers must clearly and conspicuously disclose any paid partnerships, sponsorships, or endorsements. This transparency empowers audiences to make informed decisions about the content they consume.
Restrictions on Financial Product Promotion and Advice: Individuals promoting financial products or offering financial advice must hold the appropriate licenses or be authorised representatives of a licensed firm. This safeguards consumers from potentially misleading or harmful financial information.

Other regulations apply depending on an influencer’s activity, specific industries, or platforms. For instance, the Australian Association of National Advertisers (AANA) issues advertising standards that could be relevant in certain situations. The ATO is also very clear on what must be declared for influencers, as these ‘affiliate benefits’ are considered income.

Therefore, understanding the specific context of an influencer’s activity is essential to determine the applicable regulations accurately. Consulting legal professionals or industry resources is always recommended for more detailed and tailored guidance.

What are the legal obligations of an influencer?

The legal obligations of an influencer require adherence to the same laws and regulations as any other form of advertising:

Be truthful and not misleading
Ensure they have disclosed their affiliate relationship
Carry the correct licensing where financial products are involved

Influencers have the creative freedom to share their genuine experiences, but this comes with the responsibility to be transparent. Influencers are also running a business and must declare their income and any ‘benefits’ from partnerships to the ATO.

What are the new TGA guidelines for influencers?

The new Therapeutic Goods Administration (TGA) guidelines for influencers cover social media endorsement of therapeutic goods (i.e. medicines, medical devices, etc.). The TGA Code bans paid or incentivised testimonials by influencers. Section 24(4) of the 2021 TGA Code doesn’t stop influencers from making unpaid testimonials about therapeutic goods. Still, influencers are not allowed to be involved with producing, selling, marketing and supplying the goods.

What is the ACCC crackdown on influencers?

The current ACCC crackdown on influencers is focused on ensuring transparency and honesty in online endorsements and advertising. This initiative stems from concerns that influencers, advertisers, and brands may attempt to hide the financial incentives behind product promotions and recommendations, preventing consumers from making informed decisions.

in australia 40% of consumers follow social media influencers

This is particularly relevant for micro-influencers, who, despite having fewer followers, can foster seemingly authentic relationships that lend credibility to hidden advertising content. To address this, the ACCC is keeping a close watch on influencers of all sizes, with plans to implement educational programs and impose fines to promote greater transparency in the future.

Can influencers get sued?

Yes, influencers can get sued for posting misleading reviews and not declaring their affiliate relationships. This could attract a penalty from the ACCC for individuals of up to $2.5m.

As a social media influencer, you must protect your online presence and reputation. You should also have an effective, professional, clear agreement and terms with your sponsors. This is a strong protection for your reputation and ensures your sponsor understands what you provide.

Another of your greatest potential threats is being hacked and having your online profiles compromised. Here are some essential steps to consider:

Create strong login passwords
Change your passwords regularly
Use 2-factor authentication
Avoid public Wifi or shared computers
Never share your IDs (e.g. driver’s licence, tax file number, etc.)
Consider using an online identity protection service (e.g. Aura)

No, as a social media influencer, you don’t typically need to register for an Australian Business Number (ABN) unless you meet the ATO threshold. If being an influencer has become more than just a hobby and you receive income from it consistently, consider registering as a business. You can apply online, and it doesn’t cost anything. It only takes a day to get a unique ABN.

If your earnings are more than $75,000 in a financial year, you need to register for GST and keep records of all income generated by your content to ensure you pay the correct amounts in tax.

Do I need an Influencer Agreement?

Yes, having an Influencer Agreement with your clients is necessary. This document clarifies the scope of work, expectations, compensation, and procedures for resolving disputes or ending the partnership. It protects both parties and helps prevent misunderstandings. It also protects you and your clients.

Do influencers pay tax on non-monetary compensation?

Yes, influencers must declare income and pay tax on non-monetary compensation. The Australian Taxation Office (ATO) considers items like jewellery, cars, designer clothing, holidays, and even free services received as payment for services as taxable income. These benefits must be reported in your annual tax return as part of your income, ensuring compliance with tax laws and avoiding potential issues with the ATO.

The ATO website has more information about being a social media influencer and paying taxes.

Yes, professional social media influencers can write off expenses, such as computers, cameras, and software, provided these expenses are directly related to earning income. It’s important to keep detailed records and receipts of these purchases to substantiate your claims on your tax return. Always consult your accountant or tax professional on your individual circumstances.

Is influencer marketing regulated in Australia?

Yes, influencer marketing in Australia is regulated under a self-regulation model managed by the Australian Association of National Advertisers (AANA) through its Code of Ethics. This Code mandates that all advertising content created by social media influencers must be honest, legal, and truthful.

25% of global marketing agencies plan to spend 25% of their budget on social media influencer marketing — Source: Influencer Marketing Hub (State of Influencer Marketing 2024)

Social media influencers must clearly label promotional content to ensure audiences know when the influencer benefits from promoting a product or service. The aim is to maintain honesty, transparency, and upfront communication about their relationship with the brands they endorse, fostering trust in influencer marketing practices.

Social media influencers also fall under general Australian Consumer Law legislation requirements to ensure they meet the advertising guidelines.

What are the pros and cons of influencers?

The pros and cons of influencers include:

Influencer trust: 6 out of 10 YouTube subscribers are more receptive to an influencer’s product advice than a television or movie star.
Influencer reach: Many influencers have a large network of followers, giving a promoted product or service instant visibility.
Potential ROI: Advertising studies show that influencer marketing campaigns can, on average, create $6.50 of revenue for every dollar spent.

And on the flip side, there are also several potential cons, including:

Fake followers: Influencers charge based on follower numbers, but sometimes, they ‘purchase’ followers to appear more successful than they are.
Reputational risk: You tie your brand image to the influencers you hire. If the public sees an influencer’s actions or behaviours negatively, it could reflect poorly on your brand and result in reputational damage.
Lack of authenticity: Some influencers might not align with your brand’s values and may be inauthentic when promoting your product or service.
Short-term impact: Influencer marketing campaigns might not yield long-term results as the buzz generated around your product or service quickly dissipates after the campaign ends.
Breaching consumer law: Influencer does not meet legislative requirements and breaches consumer or other laws.

What are the legal requirements for influencer marketing?

The legal requirements for influencer marketing are that all advertising, including influencer promotions, must adhere to regulations ensuring transparency and honesty. Influencers must disclose when content is sponsored or when they’ve received ANY benefit in exchange for their posts. This includes adding disclaimers to sponsored content and informing followers of any commercial relationships. In Australia, failure to disclose can lead to penalties and fines.

For influencers that promote products and services that may be considered ‘financial’ products (‘Finfluencers’), such as Buy-Now-Pay-Later, ASIC has declared that these Finfluencers are subject to financial regulatory compliance. This means Finfluencers may require either a financial services licence, authorised representative status of a licenced financial services provider or need to ensure they are clearly NOT involved in promoting financial services or products. They cannot rely on a general advice warning but need to meet a number of other hurdles to avoid falling foul of this highly regulated area of promotional activities.

Finfluencer: ‘ASX Wolf’ vs ASIC

In April 2023, the Australian federal court banned Tyson Robert Scholz, operating as ‘ASX Wolf’, from providing financial advice on social media without a proper license. He had been offering stock tips through Instagram stories and selling memberships to private social media channels for fees ranging from $500 to $1,500 per year.

Australian Securities and Investments Commission (ASIC) warned that individuals providing financial advice on social media must comply with financial services laws or face enforcement actions. Scholz was also ordered to cover ASIC’s legal expenses, which filed the lawsuit against him. [Link]

Influencers also have other regulatory obligations, including reporting all ‘income’, including benefits received to the ATO.

Do I need to follow specific industry codes of practice when hiring an influencer?

Yes, you must follow specific industry codes of practice when hiring an influencer if your business involves financial products or services or therapeutic goods such as medicines or medical devices.

Adherence to the Influencer Marketing Code of Practice, published by the Australian Influencer Marketing Council (AiMCO), is advised for businesses outside these sectors. This Code outlines essential guidelines to ensure ethical, transparent, and honest influencer marketing practices.

Do I have to disclose if I use influencer marketing?

Yes, in influencer marketing, both brand owners and influencers must disclose their relationships clearly. In Australia, influencers must be transparent about their commercial ties with brands. This adherence to transparency is mandated to prevent misleading and deceptive advertising, as outlined in Australian Consumer Law.

Influencers who do not disclose sponsored content on their platforms risk breaking the law and could face fines for engaging in deceptive or misleading conduct. Therefore, it is crucial for influencers to disclose sponsored content, ensuring compliance with legal requirements and maintaining the trust of their audience.

How do I ensure my influencers disclose their relationship to stay compliant with Australian law?

To ensure your influencers disclose their relationship and stay compliant with Australian law, it’s essential to have a formal, written and signed Agreement in place. This Agreement should explicitly require the influencer to disclose the relationship in all public posts related to your brand and ensure they will abide by marketing and other laws. Once you’ve got a signed Agreement, actively monitor all your brand mentions by the influencer to confirm adherence to the terms. You need a proactive approach to ensure compliance with Australian Consumer Law.

Can I use an influencer’s image or quote in my advertising?

No, you cannot use an influencer’s image or quote in your advertising without their permission. Some brand owners mistakenly believe that once an influencer has posted content featuring their brand, they can use, share, edit, and repurpose that content.

However, despite your brand being featured in the post, the influencer retains copyright ownership of the content and, depending on your Agreement, may not permit your reposting and re-use. Check your Agreement and specific terms carefully before using any influencer content for your own promotions. Engaging with an influencer’s content without their consent is a breach of copyright. Always obtain explicit permission or secure rights through a formal agreement before using an influencer’s content in your marketing efforts.

Who owns the content of an influencer?

Typically, the creator of a video or photo, including influencers, automatically owns the intellectual property (IP) of the content produced. Therefore, the influencer will have legal rights over created content, even for a client who has paid for the content. However, it is possible to negotiate with the influencer to either:

Transfer content ownership to the brand owner or
The influencer provides a licence, so the brand owner has the right to use the content

Ensure your Influencer Marketing Agreement clearly states who has ultimate ownership of the content and licenses you to use the content you have paid for for your promotional purposes.

Do I need an Influencer Marketing Agreement or Contract?

Absolutely, yes, having an Influencer Marketing Agreement or Contract is highly recommended when engaging with an online influencer. Many influencers operate without agreements or terms beyond a quote document. Typically, these do not cover any important terms to protect you and your brand.

This legal document should clarify the terms and conditions of the partnership arrangement between your brand and the influencer, safeguarding the interests of both parties. It should ensure you and the influencer clearly understand the collaboration expectations, deliverables, compensation, and other crucial aspects. Additionally, an agreement helps prevent potential misunderstandings and legal issues, including liability for any advertising issues, making it essential to formalise influencer partnerships.

What clauses should my Influencer Marketing Agreement include?

A well-drafted Influencer Marketing Agreement should include the following:

The scope of the partnership including the content to be created, social media platforms to be used, how long the partnership will last, and any exclusivity clauses.
Any specific brand style requirements, such as the number of brand mentions, hashtags to promote, using particular colours and highlighting specific product or service features.
Brand voice, tone, and content you want your influencers to create. This can include guidelines on the language used, the topics to be discussed, and the imagery used in posts.
Sponsored content disclosure requirements and who will be responsible for ensuring compliance.
Ownership and permitted usage rights of the content created by the influencer.
Ownership and intellectual property licensing by the brand owner, including logo, name, etc.
Payment terms, including the influencer’s fee, additional expenses, and how and when payments will be made.
Social media comment responses and interaction.
Deletion of any user-generated comment on social media that appears to be misleading. This obligation should survive the agreement termination because the post might stay on the influencer’s social media pages until the Agreement ends.
Guidelines on how your influencers can interact with your competitors and how to appropriately disclose any conflicts of interest.
Termination and breach of contract policies.

Are influencer payments tax deductible?

Yes, payments made to a social media influencer are tax-deductible if you have a business agreement with the influencer and their social media posts contribute to the success of your business. These payments are considered a business expense for advertising and promotion services rendered. The ATO has more information on tax deductions here.

Can I pay someone who doesn’t have an ABN?

Yes, you can pay someone who doesn’t have an Australian Business Number (ABN). In Australia, businesses generating over $75,000 in yearly income legally require an ABN. However, an ABN is not required for those with incomes below this threshold.

We hope you found this Legal Guide for Social Media Influencers helpful.

References

ACCC (2023), Digital Platform Services Inquiry, March 2023 Interim Report URL
Open Universities Australia, 29 September 2022, How to Become an Influencer URL
Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law), Misleading and deceptive conduct (Section 18), False or misleading representations (Section 29) URL

About the Author: Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with 20+ years experience in corporate, banking and trust law. Click for full bio of Vanessa Emilio or follow on LinkedIn.

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Legal Guide for Social Media Influencers (ACCC)