How much tax do sole traders pay in Australia?

Sole traders pay tax at the same individual income tax rates as employees, on their net business profit (income minus deductible expenses) plus any other income. There is no separate, lower 'business tax rate' for sole traders — that only applies to companies. You also pay the 2% Medicare levy. Use the calculator to see your tax and a suggested amount to set aside.

How much should I set aside for tax as a sole trader?

Because no tax is withheld from your invoices, a safe habit is to move a fixed percentage of every payment into a separate tax account as it lands. The right percentage depends on your profit — often around 20-30% for middle incomes, more if you're a high earner. This calculator works out your exact rate and rounds it up to a safe buffer.

Do sole traders get super?

No — as a sole trader nobody pays super on your behalf. You can set super aside yourself and may be able to claim a tax deduction for personal contributions (up to the concessional cap). Once your business turnover reaches $75,000 you must also register for GST and charge it on your invoices.

Sole Trader Tax Calculator

Work out your sole trader / ABN income tax for 2025-26 and — crucially — how much of every dollar to set aside, so there's no nasty surprise at tax time.

Last verified: 5 May 2026

How much tax will I pay as a sole trader?

You pay normal individual tax rates on your net profit (income minus expenses) plus the 2% Medicare levy — there's no special low business rate. Because nothing is withheld from your invoices, the trick is to set a fixed % of every payment aside as it comes in. Source: ATO.

Worked example. $90,000 income, $15,000 expenses = $75,000 profit. Tax + Medicare is about $14,800 — roughly 17% of income, so setting aside 20% of every payment keeps you safely covered with a buffer.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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How much tax will I pay as a sole trader?

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