Know exactly what to set aside from every invoice.
This sole trader tax calculator for Australia estimates the income tax, Medicare levy and offsets on your ABN income, then tells you what percentage of every invoice to set aside. Enter what you've invoiced, what the business spent and any wage income. It uses the ATO's resident rates for 2025–26 and the lower 2026–27 rates.
In the US? Use the self employment tax calculator.
A sole trader who invoices $100,000 and has $15,000 of expenses has a taxable income of $85,000 and pays about $16,988 in 2025–26 — 17% of what they invoiced.
Set aside 17% of every invoice. InvoiceSonic logs every invoice you send and shows what you've collected each month — and at tax time there's a one-click CSV export for your accountant.
| Taxable income | 2025–26 rate | 2026–27 rate |
|---|---|---|
| $0 – $18,200 | Nil | Nil |
| $18,201 – $45,000 | 16% | 15% |
| $45,001 – $135,000 | 30% | 30% |
| $135,001 – $190,000 | 37% | 37% |
| Over $190,000 | 45% | 45% |
As a sole trader, your business profit is added to any other income and taxed at the individual resident rates. There is no separate business tax. The calculator takes what you've invoiced, subtracts business expenses to get your net business income, and adds any wage or salary income to reach your taxable income.
It then applies the resident tax rates, subtracts the low income tax offset (up to $700) and the small business income tax offset (16% of the tax on your business income, capped at $1,000), and adds the 2% Medicare levy. The result is your estimated tax for the year.
You can claim expenses you incur in earning your business income — tools and equipment, software, work-related vehicle and travel costs, a share of home-office costs, insurance and professional fees — as long as you keep records to substantiate them. Personal super contributions you claim a deduction for also reduce your taxable income.
This calculator takes your total business expenses as one figure and subtracts them from what you've invoiced to get your net business income. Enter only genuine business costs; private use has to be apportioned out.
Once you've lodged a return showing business income, the ATO will put you into PAYG instalments so you pay tax on that income during the year instead of in one lump. You enter automatically when your instalment income is $4,000 or more, your tax payable is $1,000 or more and your estimated tax is $500 or more.
Quarterly instalments are due on 28 October, 28 February, 28 April, 28 July. The calculator's quarterly figure is your estimated tax on business income divided by four; the ATO will send you its own instalment amount or rate.
Income you earn under an ABN is taxed at the same rates as a wage, but nobody withholds tax from it. That is what catches new sole traders out: an employer takes tax out of every pay, while your clients pay the full invoice and the bill arrives when you lodge your return. In the worked example above, that bill is $16,988 on $100,000 invoiced.
To use this as an ABN tax calculator, enter your ABN income as business income and any job income as other income. The set-aside figure shows only the extra tax your ABN income creates, because tax on your wages is already withheld.
A sole trader pays nothing on the first $18,200 of taxable income, then 16% (15% from 1 July 2026) up to $45,000, 30% up to $135,000, 37% up to $190,000 and 45% above that, plus the 2% Medicare levy. Offsets reduce the bill for lower incomes and for small businesses.
For example: A sole trader who invoices $100,000 and has $15,000 of expenses has a taxable income of $85,000 and pays about $16,988 in 2025–26 — 17% of what they invoiced.
Set aside the percentage the calculator shows, from every invoice as it's paid, into a separate savings account. A flat 25–30% is common advice, but on this calculator's numbers it's too much below about $130,000 — $100,000 invoiced with no expenses needs 22% — and too little above about $200,000, where every extra dollar loses 47 cents including the Medicare levy. Work it out from your own numbers.
If you're registered for GST, set aside the GST you collect as well. It isn't your money, and it's paid separately on your BAS.
GST is not part of your income tax. You must register once your GST turnover reaches, or you expect it to reach, $75,000 in a 12-month period; you have 21 days to register. After that you add 10% GST to your invoices and pay it to the ATO. Enter your business income excluding GST in this calculator.
No. Sole traders pay the same income tax rates and Medicare levy as employees on the same taxable income. The difference is timing: no tax is withheld from your invoices, so you have to put money aside yourself or pay PAYG instalments. Sole traders with turnover under $5 million can also get the small business income tax offset, worth up to $1,000.
Yes, if you're an Australian resident for tax purposes. The first $18,200 of your total taxable income, from your business and any job combined, is tax-free. Claiming the threshold with your employer only changes what's withheld, not the tax you're assessed. If your wages already use up the $18,200, every dollar of business income is taxed at your marginal rate; if they don't, the unused part of the threshold covers your first business dollars.
The ATO works it out from the net small business income you report in your tax return. It's 16% of the tax on that income, capped at $1,000 a year, and only available if your business turnover is under $5 million.
You reduce taxable income by claiming business expenses you can substantiate, such as tools, equipment, software, vehicle use and a share of home-office costs. Personal super contributions you claim a deduction for also reduce taxable income. This calculator takes your total expenses as one figure.
After you lodge your return for the year ending 30 June and receive your notice of assessment — the due date is printed on it. If you're in PAYG instalments you pay quarterly on 28 October, 28 February, 28 April and 28 July instead. Your first year is usually the one that surprises people, because nothing has been paid along the way.
No. It covers income tax, the Medicare levy, the low income tax offset and the small business income tax offset. It doesn't include HELP repayments, the Medicare levy surcharge, voluntary super or family Medicare levy thresholds, so treat the result as an estimate.
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General information only, based on ATO resident rates checked September 2026, and not tax advice. The 2026–27 Medicare levy low-income threshold uses the 2025–26 figure until the ATO publishes a new one. Check ato.gov.au or your accountant for your situation.