Sole Trader Tax Calculator
Tax on your business profit for 2026-27: income tax, Medicare levy and HELP, plus how much to set aside each month so the bill never surprises you.
- Sole trader profit is taxed at the same individual rates as a salary. There is no separate business tax rate for sole traders.
- Nobody withholds tax from your invoices, so the ATO collects it through quarterly PAYG instalments instead.
| Income tax | $14,520 |
| Medicare levy | $1,600 |
| Total tax | $16,120 |
| After-tax income | $63,880 |
Resident rates for 2026-27 including the low income tax offset. Super is not included: sole traders have no super guarantee obligation to themselves.
Sole traders pay the same rates as employees
There is no special ABN tax rate. Sole trader profit lands on your individual tax return and is taxed under the ordinary 2026-27 tax brackets, with the same $18,200 tax-free threshold and the same Medicare levy. The differences sit around the edges: nobody withholds tax from your invoices, nobody pays super for you, and deductible business expenses come off your profit before tax applies. The full picture is in our ABN tax guide.
| Profit | Tax + Medicare | After tax | Effective rate |
|---|---|---|---|
| $45,000 | $4,595 | $40,405 | 10.2% |
| $80,000 | $16,120 | $63,880 | 20.2% |
| $120,000 | $28,920 | $91,080 | 24.1% |
How much should a sole trader set aside for tax?
Set aside your effective rate, not your marginal bracket. On $80,000 of profit the total tax is $16,120, which is 20.2% of profit, so moving about $1,343 a month into a separate account covers the year. Add your HELP repayment on top if you have a study loan, and remember GST is a separate bucket entirely if you are registered.
Quarterly PAYG instalments do the saving for you
After your first profitable return, the ATO enrols you in PAYG instalments and collects the tax quarterly instead of in one bill. The entry test is $4,000 of instalment income plus a tax debt over $1,000. Estimate your quarterly figure with the PAYG instalment calculator, and if a slow year makes the pre-set amount too high, you can vary it down before the due date.
Frequently asked questions
How much tax does a sole trader pay in Australia?
Do sole traders get the tax-free threshold?
Do sole traders have to pay super?
What about GST?
I have a job and a side ABN. How does that work?
Can I pay myself a wage from my sole trader business?
Narelle Hartigan is a CPA-qualified tax accountant with over a decade of experience in Australian personal taxation and payroll. She founded PAYG Calculator Australia to make tax withholding easy for every Australian worker to understand.