Sole Trader Tax Calculator
Work out your tax as a sole trader or freelancer — gross income, expenses, super, and PAYG.
Concessional cap for 2025–26 is $30,000 (combined with employer SG). Contributions above the cap aren't deductible.
If your situation is straightforward — no GST, no big asset purchases — DIY online lodgement through services like H&R Block Online or Etax costs under $100 and walks you through every deduction.
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The numbers above are a starting point. For decisions involving your full financial picture — tax, debt, super, investments — a qualified Australian financial adviser can give tailored guidance.
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How does sole trader tax work in Australia?
As a sole trader, you and your business are the same legal entity for tax purposes. You report your business profit on your individual tax return and pay income tax at the same Stage 3 rates as employees, plus Medicare Levy. There's no separate "business tax rate" — the whole net income goes through the personal income tax system.
The big differences from being an employee are: you pay your own super (and can claim a deduction for it), you don't have an employer withholding PAYG so the ATO collects quarterly PAYG instalments instead, and you can deduct business expenses directly.
- Business deductions: anything genuinely incurred to earn your business income — software, internet share, home-office portion, vehicle for work, tools, professional indemnity insurance, training, accountant's fees.
- GST kicks in at $75,000 turnover. If your gross turnover hits $75,000 in any rolling 12-month period, you must register for GST within 21 days, charge 10 per cent GST on invoices, and lodge quarterly or annual BAS.
- Personal super is deductible up to $30,000 (2025–26). The concessional cap covers both your employer SG (if you have another employer) and your personal deductible contributions. Going above the cap means the excess isn't deductible.
- PAYG instalments are estimated quarterly. After your first profitable year, the ATO calculates an instalment rate based on your prior return and sends you quarterly notices. Pay these to avoid a giant bill at tax time.
- Carry-forward business losses can offset business income in future years. Personal Services Income (PSI) rules may restrict deductions if your income is mainly for your personal effort — check with an accountant.
Frequently asked questions
Yes. To invoice clients and trade legitimately, you need an Australian Business Number from the Australian Business Register (free, takes a few days). You can use our ABN Lookup tool to check whether a business you're dealing with is properly registered.
When your gross business turnover hits $75,000 in any rolling 12-month period — or if you reasonably expect it to in the next 12 months. Once registered, you charge 10 per cent GST on your invoices, claim GST credits on business purchases, and lodge BAS quarterly or annually.
A rough rule of thumb: 25–30 per cent of net profit for income tax plus Medicare, more if you earn over $135,000 (where the 37% bracket kicks in) or have a HECS loan. The calculator above gives a specific number for your situation. Set the money aside in a separate account so you're not scrambling at tax time.
After your first year filing a tax return with business income, the ATO works out an instalment rate based on that return. From then on, each quarter you'll receive a notice and pay an estimated portion of next year's tax. You can vary it down if your business slows — but if you underpay too much, you'll be charged a general interest charge.
No — sole traders cannot legally pay themselves a wage. The business profit IS your personal income. If you want to pay yourself a wage and have a clear separation, you need a company structure, where you become an employee of the company. This adds complexity (corporate tax, ASIC fees, separate returns) and usually only makes sense above certain income levels.
Yes, for business use. Two methods: the cents-per-kilometre method (87c/km for 2024–25, capped at 5,000 km) for simple cases, or the logbook method for higher business use percentages (you keep a 12-week logbook then claim a percentage of all car costs including depreciation). The logbook method usually wins for high-use vehicles.