Sole trader tax calculator

As a sole trader, your business profit is part of your personal income. It is added to any salary and taxed at the resident rates. The first $18,200 is tax free. From 1 July 2026 the rate on income between $18,201 and $45,000 falls from 16 % to 15 %. The low income tax offset of up to $700 applies too.

The Medicare levy adds 2 % of taxable income. People on low incomes pay less or nothing.

If your turnover is under $5 million you get the small business income tax offset: 16 % of the income tax on your business profit, up to $1,000 a year. The calculator then shows what the business adds to your tax and a quarter of that as a guide to your PAYG instalments.

• You are an Australian resident for the whole income year and trade as a sole trader, not through a company or trust.
• Net business income is income minus deductible business expenses. The calculator does not work out expenses or depreciation. Other income is taxable income after deductions.
• Tax uses the resident rates: 16 % (2025-26) or 15 % (2026-27) from $18,201, 30 % from $45,001, 37 % from $135,001 and 45 % from $190,001. The low income tax offset is included.
• The Medicare levy is 2 % with the low-income reduction for a single person: none up to $28,011, then 10 % of the excess until the full 2 % applies. A later Budget may still raise the 2026-27 threshold.
• The small business income tax offset is 16 % of the tax on your business income, up to $1,000, if turnover is under $5 million.
• The quarterly figure is a quarter of the tax the business adds this year. The ATO sets your actual instalment from your last return.
• Super for yourself is voluntary. Personal super contributions you claim as a deduction, the Medicare levy surcharge, HELP repayments and GST are not included.

Do sole traders pay a different tax rate?

No. A sole trader pays the same individual rates as an employee. The business profit is added to your other income.

Do I get the $1,000 standard deduction?

Only for wages. From 2026-27 employees can deduct $1,000 for work expenses without receipts, but business income does not count. Claim your actual business expenses instead.

When do I have to pay PAYG instalments?

The ATO puts you into PAYG instalments once your business and investment income is $4,000 or more, your tax on your last return was $1,000 or more and your estimated tax is $500 or more. Quarterly instalments are due on 28 October, 28 February, 28 April and 28 July.

Do I have to pay super for myself?

No. The 12 % super guarantee is for employees. As a sole trader you can make personal contributions and may be able to claim them as a tax deduction.

Do I need to register for GST?

You must register once your GST turnover is $75,000 or more a year. GST is collected for the ATO and is not part of your income tax.

• www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/concessions-offsets-and-rebates/small-business-income-tax-offset
• www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/payg-instalments
• www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
• www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy
• www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/super-for-sole-traders
• www.legislation.gov.au/C2004A05138/latest/text
• www.legislation.gov.au/C2004A03348/latest/text
• www.legislation.gov.au/C2004A03351/latest/text