Self-employed tax in Australia
Sole traders in Australia report business profit on their individual tax return and pay tax at personal marginal rates, plus the Medicare levy. GST applies once turnover reaches A$75,000. Here are the 2025-26 headline figures.
The headline figures
- Resident income tax 2025-26 (on net profit): 0% up to $18,200, 16% to $45,000, 30% to $135,000, 37% to $190,000, then 45% — plus a 2% Medicare levy.
- GST registration is compulsory once your annual turnover reaches A$75,000; then you charge 10% GST and lodge a quarterly Business Activity Statement (BAS).
- The ATO enrols most sole traders into PAYG instalments after their first year — quarterly prepayments toward your annual tax. A common rule of thumb is to set aside 25–30% of profit.
- Claim the 88c/km car rate and keep records of all deductible business expenses to lower your taxable profit.
Quick tax estimate
Estimate your Australia tax below. For the full breakdown, open the dedicated Australia calculator.
Estimated total tax
A$7,428
Effective rate 14.3% on A$52,000 net profit
GST: below the A$75,000 turnover threshold you don't need to register for GST. Sole traders report business profit on their individual tax return and usually pay PAYG instalments quarterly. The Medicare levy shown is a simplified 2% estimate.
Estimates use the 2025-26 ATO resident income-tax brackets plus a simplified 2% Medicare levy above the low-income threshold. GST (10%) is separate. Simplified estimate for planning only — not tax advice.
Australia freelancer tax — FAQ
How much tax does a sole trader pay in Australia?
You pay individual income tax on your net business profit at resident marginal rates (0% up to $18,200, then 16%, 30%, 37% and 45%), plus the 2% Medicare levy. There is no separate company tax for sole traders.
When do I have to register for GST?
Once your annual GST turnover reaches or is expected to reach A$75,000. You then charge 10% GST on taxable sales and lodge a quarterly BAS. Below the threshold, registration is optional.
What are PAYG instalments?
After your first year the ATO usually asks you to pre-pay your income tax in quarterly PAYG instalments, based on your last return. Setting aside 25–30% of each payment covers it comfortably.
Figures are current headline guidance for the self-employed, verified against official sources — not tax advice. Check current rules or an accountant for your situation.