Sole Trader Tax Calculator
See your income tax and Medicare levy for 2026-27 in seconds, then keep the records that make the number right at tax time.
Enter your annual profit and this sole trader tax calculator shows your income tax, the 2% Medicare levy, and your take-home for the 2026-27 income year. As a sole trader your business profit is taxed as personal income, so the expenses you record are what lower the bill.
Your sole trader profit for the year: business income minus deductible expenses. Assumes this is your main income and you claim the tax-free threshold.
Enter your annual profit to see your income tax and Medicare levy for 2026-27.
Estimates only, for the 2026-27 income year, assuming you are an Australian resident sole trader claiming the tax-free threshold. The 2% Medicare levy is included; low-income earners below the ATO threshold (around $27,000 for singles, indexed each year) may pay a reduced levy or none. It does not include the Medicare levy surcharge, HELP or study-loan repayments, the low-income tax offset, or PAYG instalments. Check your figures with the ATO or a registered tax agent.
Key takeaways
Your profit is your income
A sole trader has no separate business tax. Your business profit, after deductible expenses, is added to your personal income and taxed at the individual rates, plus the 2% Medicare levy.
The first $18,200 is tax-free
If you claim the tax-free threshold, the first $18,200 of income is taxed at 0%. From 1 July 2026 the next bracket drops from 16% to 15%, so tax on the same profit is slightly lower than last year.
No compulsory super
Unlike an employee, a sole trader does not have to pay super for themselves. You can contribute voluntarily and usually claim a deduction, which also lowers the profit your tax is charged on.
Expenses decide the bill
Every deductible expense you record lowers the profit both the income tax and the Medicare levy are charged on. A receipt left in the ute is profit you pay tax on that you did not need to.
Catch every expense so your profit is right
The number above is only as good as the expenses behind it. Snap a receipt at the counter and SparkReceipt reads the merchant, date, total, and GST in seconds, then sorts it into a category. Forward an email receipt or import a bank statement and the same thing happens. Nothing is left in the glovebox to be typed up later, so the profit you report is the real one. On iPhone, Android, and the web.
Tax-time figures ready when you are
Come tax time your income and expenses are already categorised and totalled, so working out profit is a matter of reading it off, not rebuilding a year of spending. Export the figures to a spreadsheet, or invite your accountant or tax agent into the same account for free. Either way the records sit behind the return if the ATO ever asks.
How sole trader tax works in Australia
As a sole trader you run your business under your own name and Australian Business Number, and your business profit is part of your personal income. There is no separate company tax rate. For 2026-27 you pay:
- Income tax at the resident individual rates. The first $18,200 is tax-free if you claim the tax-free threshold, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that.
- The Medicare levy, 2% of your taxable income. Low-income earners below the ATO threshold pay a reduced levy or none.
You report your business income and expenses in the business section of your individual tax return. Once your business is established, the ATO may put you on PAYG instalments, where you pre-pay your expected tax in quarterly amounts rather than in one lump at the end of the year.
What you can claim as a deduction
Your tax bill starts from profit, so every deductible expense lowers it. Common ones for sole traders include:
- Stock, materials, and the direct cost of what you sell
- Tools, equipment, software, and subscriptions used for the business
- Car and travel costs for business trips (not the drive from home to a regular workplace)
- A share of your home running costs if you work from home
- Phone and internet used for work
- Accounting fees, insurance, and bank charges for the business
Keep the receipt behind each one. The ATO can ask you to show the records for a deduction, and generally you keep them for five years. The expense tracker keeps the image attached to every line.
When you lodge and pay
The Australian income year runs from 1 July to 30 June. If you lodge your own individual tax return, the deadline is 31 October. If you use a registered tax agent, you can usually lodge later, as long as you are on their books before 31 October. If you are on PAYG instalments, those fall due through the year and are credited against the final bill.
Cut the shoebox at tax time
The tax itself is fixed by your profit and the rates. What you control is how much of the year you spend reconstructing it. Recording income and expenses as they happen, with the receipt attached, turns tax time into reading off a total rather than a weekend sorting through bank statements. If you would rather hand it over, your accountant or tax agent works in the same account for free.
Frequently Asked Questions
A sole trader pays income tax on business profit at the individual resident rates, plus the 2% Medicare levy. For 2026-27 the first $18,200 is tax-free, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above. There is no separate business tax rate. Enter your profit in the calculator to see your own figure.
Yes. The 2% Medicare levy applies to your taxable income like any other resident individual. Low-income earners below the ATO threshold (around $27,000 for singles, indexed each year) pay a reduced levy or none. The Medicare levy surcharge is separate and only applies to higher earners without private hospital cover.
You can claim expenses incurred in running the business: stock and materials, tools and equipment, software and subscriptions, business car and travel, a share of home-office running costs, business phone and internet, and professional fees like accounting and insurance. Each deduction lowers the profit your tax is charged on, so keeping the receipts is what protects it.
No. Sole traders are not required to pay super for themselves. You can make voluntary contributions and usually claim a deduction for them, which also reduces your taxable profit. This calculator does not include voluntary super contributions.
The Australian income year runs from 1 July to 30 June. If you lodge your own return, it is due by 31 October. Using a registered tax agent usually gives you longer, provided you are on their books before 31 October. If the ATO has put you on PAYG instalments, you pre-pay tax through the year and it is credited against the final bill.
It uses the 2026-27 resident income tax rates and the 2% Medicare levy, and assumes you are an Australian resident claiming the tax-free threshold with sole trader profit as your income. It does not include the Medicare levy surcharge, HELP or study-loan repayments, the low-income tax offset, or PAYG instalment timing, so treat it as an estimate and confirm with the ATO or a registered tax agent.
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