How sole trader tax works
As a sole trader you don't lodge a separate business return. Your business income and expenses go into your individual tax return, and you pay tax at the normal individual rates on your net profit (income minus deductible expenses).
There's no tax automatically withheld from what you earn, so it's smart to set money aside through the year for your tax bill.
What you can deduct
You can claim expenses that genuinely relate to earning your business income.
- Tools, equipment and software (immediate for lower-cost items)
- Home-office running costs, and a share of your car for business trips
- Phone, internet, subscriptions and professional fees
- Insurance, marketing, and bank/merchant fees
- Last year's fee for managing your tax affairs
GST & PAYG instalments
You must register for GST once your business turnover reaches $75,000 (some activities require it earlier). Once registered, you charge GST and lodge activity statements.
The ATO may also ask you to pay PAYG instalments — prepayments toward your expected tax — so your bill doesn't all land at once.
Super, records & a second job
Sole traders generally fund their own super, and personal contributions may be deductible if you're eligible. Keep your business records separate from personal spending — a dedicated account makes tax time far easier.
If you also have a regular job, your salary and your ABN income go on the same return; your consultant will bring them together and work out the result.
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Frequently asked
Do I need to register for GST?
Once your turnover reaches $75,000 you must register (some activities, like rideshare, require it sooner). Below that it's generally optional.
Can I claim a home office as a sole trader?
Yes — you can claim the running costs for the space and hours you work from home for the business, and potentially occupancy costs in some cases. Keep records.
Do I pay my own super?
Generally yes — as a sole trader you fund your own super, and eligible personal contributions may be deductible.
What if I have both a job and an ABN?
They go on one return — your PAYG salary plus your business income. Because tax isn't withheld from ABN income, setting some aside avoids a surprise bill.
This guide is general information only and does not take your personal circumstances into account, so it isn't tax advice. CFM Group is a referral service that connects you with an independent registered Australian tax agent who reviews and lodges your return. Always confirm your own situation with the ATO or your tax agent.