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A sole trader pays tax on business profit at the same rates as any individual — there is no separate business tax rate. Enter your ABN income and expenses to see your tax, the small business income tax offset, your quarterly PAYG instalment and how much to set aside for your own super.
Your total ABN / gross business income (this is your GST turnover).
Deductible costs of running the business — tools, vehicle, home office, software.
Salary or other taxable income from outside the business (optional).
Concessional contributions you claim as a deduction (optional). Reduces your taxable income.
Total tax
$15,120
After-tax income
$64,880
Quarterly PAYG instalment (guide)
$3,780
A rough quarter of your yearly tax. The ATO sets your actual instalment from your last return.
You likely need to register for GST
Your business income is at or above the $75,000 GST turnover threshold. Once registered you charge 10% GST and lodge a BAS. Work the GST out with the GST calculator.
Set aside for your own super
$9,600 a year
No one pays you super — this is 12% of your net business income, the same rate an employee gets. Personal contributions you claim are deductible, up to the concessional cap.
$85,000 of ABN income less $10,000 of expenses is $75,000 of net business income.
Tax and Medicare come to about $13,520 (after the $1,000 small business offset), leaving roughly $61,480. Set aside about $3,380 a quarter for PAYG and $9,000 for your own super.
$120,000 of ABN income less $20,000 of expenses is $100,000 of net business income.
Tax and Medicare are about $21,520, leaving roughly $78,480. Well over the $75,000 GST threshold, so registration is required.
Doing your own books at tax time?
The EOFY Tax Toolkit has the deduction checklists and spreadsheets sole traders use to keep every claim.
A sole trader is not taxed separately from you — your business profit is added to your other income and taxed at the individual marginal rates, with the Medicare levy on top. There is no tax-free “business” rate. The upside is the small business income tax offset and the fact you only pay tax on profit, after your deductible expenses.
Once your business income is established, the ATO usually moves you onto PAYG instalments — regular pre-payments towards your expected tax bill, most often paid quarterly with your BAS. They are credited against your final tax when you lodge, so they are not an extra tax, just a way to spread it. This calculator estimates the quarterly instalment as a quarter of the year's tax; the ATO sets your actual amount or rate from your last return.
If your aggregated turnover is under $5 million, you get the small business income tax offset: 16% of the income tax on your net small business income, capped at $1,000 per person each year. The ATO applies it automatically when you lodge — you do not claim it separately — but it is worth knowing it is there, because it quietly trims the tax on your business profit.
No employer pays super for you, so your retirement saving is entirely up to you. Personal contributions you make to a complying fund can be claimed as a tax deduction (up to the annual concessional cap), which both builds your super and lowers your tax. A simple rule of thumb is to set aside the same 12% an employee would get on their wage.
Tax rates, the small business income tax offset, PAYG instalments and the GST threshold are the ATO's published figures. This is an estimate — confirm with the ATO or your registered tax agent.
As a sole trader you and your business are the same entity for tax. You report your business income and expenses in your individual tax return, and the profit is taxed at the ordinary individual rates plus the Medicare levy.
You do not pay yourself a wage or withhold PAYG from drawings. Instead, the ATO collects your tax through PAYG instalments during the year and squares it up when you lodge.
Because there is no employer, there is no compulsory super for you — but personal contributions are deductible, and the small business income tax offset reduces the tax on your profit.
ATO rates checked against official sources — verified 19 July 2026
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
Rates and thresholds last updated for the 2026–27 financial year.