Disclaimer: This calculator provides estimates only and should not be considered financial, tax or legal advice. Tax obligations for sole traders depend on your individual circumstances. GST registration thresholds and PAYG instalment rules are set by the ATO. Always consult a registered tax agent for advice specific to your situation. Evercend Pty Limited does not hold an Australian Financial Services Licence.
Sole trader tax calculator inputs and results
Business income
Equipment, software, vehicle, professional fees, home office, etc.
Personal income
PAYG salary or other income outside the business.
Settings
Required if your turnover exceeds $75,000 per year.
Enter your ABN income to begin
Add your annual ABN income and deductible expenses to estimate your tax, quarterly PAYG instalments and how much to set aside from each invoice.
Sole trader tax in Australia
This calculator estimates the tax position of a sole trader for the 2026-27 income year. A sole trader is not a separate entity for income tax, so business profit is reported in the individual tax return and taxed at individual marginal rates. The estimate brings together the income tax on net business profit, the Medicare levy, and, where relevant, PAYG instalments and GST registration, so the full picture of a sole trader's obligations sits in one place.
How to use this calculator
Enter net business profit
Enter net business profit, which is business income minus deductible business expenses, along with any other individual income.
Apply marginal rates
The calculator applies the individual marginal rates and the Medicare levy to the combined taxable income.
Check GST and PAYG
Use the GST and PAYG notes below to check whether registration and quarterly instalments are likely to apply to the situation entered.
How this calculator works
A sole trader and the business are the same entity for income tax. Net business profit is added to any other income and taxed at the individual marginal rates, with the same tax-free threshold and Medicare levy that apply to wages. There is no separate business tax rate for sole traders. Net business profit is business income minus deductible business expenses. An expense is generally deductible where it is incurred in earning assessable income and is not private or capital in nature. The calculator works from the net profit figure entered. GST is separate from income tax. Registration for GST is required when GST turnover reaches $75,000, or when it is expected to reach that level, with registration due within 21 days. Taxi, limousine and ride-sourcing providers must register regardless of turnover. Once registered, a sole trader charges 10% GST on taxable sales, lodges a business activity statement, and can claim GST credits on eligible purchases. PAYG instalments are prepayments toward the expected income tax on business and investment income, spread across the year. Individuals, including sole traders, automatically enter the system when the latest return shows instalment income of $4,000 or more, tax payable of $1,000 or more, and notional tax of at least $500. Instalments paid through the year are credited against the final tax bill at lodgment. A sole trader is not required to pay the super guarantee for their own work. Personal contributions to super can be made and may be claimed as a deduction, within the concessional contributions cap. The small business income tax offset can also reduce the tax on business profit, at 16% of the tax on net small business income, capped at $1,000 a year, where aggregated turnover is under $5 million.
Assumptions used
Figures use the 2026-27 individual income tax rates and the 2 percent Medicare levy. The Medicare levy can be reduced or nil at lower incomes. The estimate covers income tax and the Medicare levy on the profit entered. GST is handled separately through the business activity statement and is not part of the income tax figure. The estimate assumes the profit figure entered is for the full income year and does not model offsets, the decline in value of assets, or prior-year losses unless entered.
Worked example
Assume business income of $95,000 and deductible business expenses of $25,000 for the 2026-27 income year, with no other income.
Net business profit is $95,000 minus $25,000, which is $70,000. The $70,000 is added to taxable income and taxed at the individual marginal rates, with the Medicare levy applied on top. If GST turnover is $75,000 or more, GST registration and quarterly business activity statements would also apply, separately from the income tax above.
Taxable income in this example is $70,000, taxed at individual marginal rates plus the Medicare levy. This is an example only and is not a prediction for any individual.
What changes your sole trader tax
Several things change how much tax a sole trader pays. The main ones are:
Net business profit
Income tax is worked out on profit, which is business income minus deductible business expenses, added to any other individual income.
Marginal rates and Medicare levy
Business profit is taxed at the same individual rates and 2 percent Medicare levy as wages. There is no separate business tax rate.
GST registration
Registration is required at $75,000 GST turnover or when expected, within 21 days. Taxi, limousine and ride-sourcing providers must register regardless of turnover.
PAYG instalments
Sole traders often prepay income tax in quarterly instalments once the entry thresholds are met. Instalments are credited against the final tax bill.
Small business income tax offset
A 16% offset on the tax relating to net small business income, capped at $1,000 a year, applies where aggregated turnover is under $5 million.
Super
No super guarantee is required on a sole trader's own work. Personal deductible contributions can be made within the concessional cap.
Rates and assumptions used
| Item | Value used | Source |
|---|---|---|
| GST registration | $75,000 GST turnover, register within 21 days | ATO |
| GST rate on taxable sales | 10% | ATO |
| PAYG instalments automatic entry | Instalment income $4,000+, tax payable $1,000+, notional tax $500+ | ATO |
| Small business income tax offset | 16% of tax on net small business income, capped $1,000, turnover under $5m | ATO |
Figures checked against the sources above on 10 August 2026.
Frequently asked questions
No. Business profit is added to any other income and taxed at the individual marginal rates, with the same tax-free threshold and Medicare levy that apply to wages.
Related calculators and guides
Sources
- •ATO, Registering for GST
- •ATO, GST registration for taxi, limousine and ride-sourcing
- •ATO, Starting PAYG instalments
- •ATO, Small business income tax offset
- •ATO, Tax rates for Australian residents
Content reviewed and figures checked against the sources above on 10 August 2026.