Why use this calculator
Sole traders pay income tax on net profit — not revenue. Understanding your true tax liability helps you set aside the right amount as you earn, avoid a surprise tax bill, and make the most of deductible business expenses and super contributions.
How to use it
Enter your estimated annual revenue and business expenses. Add any other income (e.g., part-time employment). Include deductible super contributions if you make them. The calculator shows your taxable profit, income tax, Medicare levy, take-home pay, and whether you need to register for GST.
The formula
Net Profit = Revenue − Expenses. Taxable Income = Net Profit + Other Income − Super Contributions. Tax = ATO 2025-26 brackets minus LITO. Medicare Levy = 2% of taxable income. Take-Home = Net Profit − Total Tax.
Worked examples
$95k revenue, $20k expenses, $5k super contribution, no other income
Net profit $75k, taxable income $70k, ~$14k tax, ~$61k take-home
$50k revenue, $10k expenses, part-time job $30k
Net profit $40k + $30k other = $70k taxable income, ~$13k tax
When people use it
- Estimating quarterly PAYG instalments
- Checking if you need to register for GST
- Comparing sole trader vs company structure
- Planning super contributions for tax savings
Tips
- Sole traders must register for GST if annual turnover is $75,000 or more
- Deductible super contributions can significantly reduce your taxable income
- Set aside approximately 25-30% of net profit for tax as you earn
- As a sole trader, you can claim home office, vehicle, equipment, and professional development expenses
- Consider switching to a company structure if net profit consistently exceeds $100k+ for potential tax savings
Questions people ask
- When must a sole trader register for GST?
- You must register for GST once your annual turnover is $75,000 or more ($150,000 for non-profits). You can voluntarily register below this threshold. Once registered, you charge 10% GST on sales and can claim GST credits on business purchases.
- Can I claim super contributions as a sole trader?
- Yes. Personal super contributions are tax-deductible for self-employed people who earn less than 10% of their income from employment. The concessional (deductible) cap is $30,000 per year in 2025-26.
- How do I pay tax as a sole trader?
- You lodge an individual tax return including a business schedule. If the ATO expects you to owe more than $500 in tax, you'll be required to pay quarterly PAYG instalments. Keep records of all income and expenses.