🧾 Your Business Income & Deductions
$
$
Vehicle, home office, equipment, software, insurance etc.
$
$
Tax-deductible if you claim the personal super deduction
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Net Take-Home Profit
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—
—
Income tax payable
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Medicare levy
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Quarterly PAYG instalment
📋 Full Tax Breakdown
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Sole Trader Tax in Australia: What You Need to Know
As a sole trader, you report your business income and expenses in your personal tax return (not a company return). Your taxable income is your gross business revenue minus allowable deductions, plus any other income sources. You then pay tax at individual marginal rates.
Key Deductions for Sole Traders
- Vehicle expenses: Logbook method or cents-per-kilometre (88c/km for 2025–26)
- Home office: Fixed rate 70c/hour or actual cost method
- Equipment and tools: Instant asset write-off up to $20,000 for 2025–26
- Professional development, software, insurance, marketing
- Superannuation: Personal concessional contributions are fully deductible (up to $30,000 cap)
PAYG Instalments — Avoid the Tax Surprise
Once your tax bill exceeds $1,000, the ATO will require quarterly PAYG instalments. These are prepayments toward your annual tax bill paid in October, February, April and July. Setting aside 25–30% of each invoice for tax is a practical approach for most sole traders.
Estimates based on 2025-26 ATO rates. Not tax advice. Consult a registered tax agent for personalised guidance.