Australia Sole Trader Tax Calculator 2024-25
Calculate Australian income tax, Medicare levy and GST obligations for sole traders. Includes LITO offset and net business income breakdown for 2024-25.
A$
Revenue minus deductible business expenses A$
Salary, investments, rental income
Medicare levy: 2% • LITO: up to $700
A$0
After-Tax Income
A$0
Income Tax
A$0
Medicare Levy (2%)
A$0
GST to Collect (if registered)
Tax Breakdown
How to Use This Australian Sole Trader Tax Calculator
Enter your net business income β your total business receipts minus deductible expenses such as home office costs, equipment, vehicle use, insurance and professional services. If you have other income sources (salary, investments), include those separately to see your total tax position.
This calculator uses ATO 2024-25 tax rates and applies the Low Income Tax Offset (LITO) automatically.
The Formula
Total Taxable Income = Business Income + Other Income
Income Tax = Apply marginal rates to taxable income
LITO = Up to $700 (phases out between $37,500β$66,667)
Medicare Levy = 2% of taxable income (reduced for low incomes)
Net Tax = Income Tax β LITO + Medicare Levy
After-Tax = Total Income β Net Tax
GST Obligation = Business Turnover Γ 10% (if registered)
Income Tax = Apply marginal rates to taxable income
LITO = Up to $700 (phases out between $37,500β$66,667)
Medicare Levy = 2% of taxable income (reduced for low incomes)
Net Tax = Income Tax β LITO + Medicare Levy
After-Tax = Total Income β Net Tax
GST Obligation = Business Turnover Γ 10% (if registered)
Example
Tom, sole trader designer, A$80,000 net business income in 2024-25:
Taxable income: $80,000
Income tax: $18,200 Γ 0% + $26,800 Γ 19% + $35,000 Γ 32.5% = $16,522
LITO: $0 (phases out above $66,667)
Medicare levy: $80,000 Γ 2% = $1,600
Total tax: $18,122
After-tax income: A$61,878 (A$5,157/month)
Taxable income: $80,000
Income tax: $18,200 Γ 0% + $26,800 Γ 19% + $35,000 Γ 32.5% = $16,522
LITO: $0 (phases out above $66,667)
Medicare levy: $80,000 Γ 2% = $1,600
Total tax: $18,122
After-tax income: A$61,878 (A$5,157/month)
Extended
ABN Registration Guide & Tax Obligations
Step-by-step ABN setup and overview of your ongoing tax obligations as a sole trader
Everything you need to know about setting up as an Australian sole trader and your ongoing tax obligations.
ABN Registration Checklist
| Step | Action | Where | Cost |
|---|---|---|---|
| 1 | Apply for ABN | Australian Business Register (abr.business.gov.au) | Free |
| 2 | Register business name (optional) | ASIC Connect | $44/yr or $102/3yr |
| 3 | Register for GST (if turnover β₯ $75K) | ATO Business Portal | Free |
| 4 | Set up PAYG instalments | ATO myGov / Business Portal | Free |
| 5 | Open business bank account | Your bank | Varies |
| 6 | Keep business records for 5 years | Accounting software or spreadsheet | Freeβ$50/mo |
Key Tax Deadlines
| Obligation | Frequency | Due Date |
|---|---|---|
| Income Tax Return (self-lodged) | Annual | 31 October (or May if tax agent) |
| GST (if registered, monthly) | Monthly | 28th of following month |
| GST (quarterly) | Quarterly | 28 Oct, 28 Feb, 28 Apr, 28 Jul |
| PAYG Instalments | Quarterly | 28 Oct, 28 Feb, 28 Apr, 28 Jul |
| Super for eligible workers | Quarterly | 28 Oct, 28 Jan, 28 Apr, 28 Jul |
Tax at Different Income Levels
| Business Income | Income Tax | Medicare | After LITO | Take-Home | Eff. Rate |
|---|
Frequently Asked Questions
What taxes does an Australian sole trader pay?
Australian sole traders pay income tax on their business profits at marginal rates (0%β45% plus 2% Medicare levy). Unlike employees, there is no tax withheld at source β you pay tax through the PAYG instalment system. You may also need to charge GST (10%) if your turnover exceeds $75,000.
What are the 2024-25 Australian income tax rates?
For 2024-25: 0% on income up to $18,200 (tax-free threshold); 19% on $18,201β$45,000; 32.5% on $45,001β$120,000; 37% on $120,001β$180,000; 45% on income above $180,000. The 2% Medicare levy applies to most taxpayers, with low-income exemptions below $26,000.
Do I need to register for GST as a sole trader?
You must register for GST if your annual GST turnover is $75,000 or more ($150,000 for non-profit organisations). Once registered, you charge 10% GST on taxable sales and claim GST credits on business purchases. GST is separate from income tax β it is collected on behalf of the ATO, not income to you.
What is the Low Income Tax Offset (LITO)?
The Low Income Tax Offset reduces tax payable for lower-income earners. For 2024-25, the maximum LITO is $700 for taxable income up to $37,500. It phases out at 5 cents per dollar between $37,500 and $45,000, then 1.5 cents per dollar between $45,000 and $66,667. The Low and Middle Income Tax Offset (LMITO) ended in 2022-23.
What is ABN registration and why does a sole trader need it?
An Australian Business Number (ABN) is an 11-digit identifier issued by the ATO. Sole traders need an ABN to legally operate a business, issue tax invoices, register for GST, claim fuel tax credits, and register a business name. ABN registration is free and can be done online through the Australian Business Register. Without an ABN, your clients may withhold 47% from payments (top withholding rate).