Enter your business income and expenses to see the tax and Medicare levy on your sole trader profit, with the small business income tax offset, and how much to set aside.
Before expenses, for the year
What you can deduct
A salary or other taxable income
Set aside for tax
$10,295
16% of your $65,000 profit · about $858 a month
What this means
No one takes tax from your income as you go, so move 16% of what you earn into a separate account as it comes in. Each extra $100 of profit costs about $34 in tax and charges.
Once your business income passes $4,000 a year, the ATO may put you on PAYG instalments, paid each quarter. You must register for GST once turnover reaches $75,000.
Personal super contributions you claim as a deduction are taxed at 15% in the fund instead of your marginal rate.
| Profit | $65,000 |
| Income tax | −$8,995 |
| Medicare levy | −$1,300 |
| You keep | $54,705 |
| Taxable income | Rate | With Medicare levy |
|---|---|---|
| Up to $18,200 | 0% | 0% |
| $18,201 to $45,000 | 15% | 17% |
| $45,001 to $135,000 | 30% | 32% |
| $135,001 to $190,000 | 37% | 39% |
| Over $190,000 | 45% | 47% |
If you also earn a salary, add it under More options: your business profit is taxed on top of it, at your higher rates.
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The same income tax rates as everyone else, on your business profit plus any other income, and the 2% Medicare levy. Sole traders with turnover under $5 million also get the small business income tax offset, up to $1,000 a year.
A cut of 16% of the income tax on your net small business income, up to $1,000 a year. It's worked out when you lodge your return; you don't need to apply for it.
Once your business or investment income passes $4,000 and you owe enough tax, the ATO puts you on PAYG instalments, usually paid each quarter. In your first year there's often just a bill when you lodge.
No, it's optional for sole traders. But personal contributions you claim as a deduction are taxed at 15% in your fund instead of your marginal rate, which often saves tax.
Once your GST turnover reaches $75,000 a year (or straight away if you drive for a ride-share service). Then you add 10% GST to your prices and lodge activity statements.