Apparently the only things in life that are certain are death and taxes. While it is anyone’s guess about what death actually entails, you can know what your tax obligations are. Read on to find out what you need to know about your tax requirements for your business as a sole trader.

What Is the Sole Trader Tax Rate?

Not being required to perform a separate tax return is one of the chief benefits of being a sole trader. Thus, the individual income tax thresholds will determine the rate at which your business will be taxed. Importantly, this means that the tax-free threshold applies to your business revenue. As of 2019, the tax-free threshold is $18,200. You can check out the tax rates on the ATO’s website here.

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How Do I Lodge My Business’s Tax Return?

Since you do not do a separate tax return, your business’s tax are reported as part of your individual tax return. Instead of a separate return, you include your business’s revenue and expenses under a section for business items. Also, it is important to note that you will be responsible to pay yourself superannuation as a sole trader.

Keep in mind that just because you are a sole trader, doesn’t mean you are excluded from registering your business. You are still required to have an ABN when you are conducting business in Australia. Moreover, you will also have to meet the requirements of holding an ABN in conjunction to your tax obligations.

Are There Any Other Tax Obligations?

Depending on the size of your business you may be required to register and pay GST. If your business earns more than $75,000 a year, then you will have to pay GST. Moreover, if you have employees, you may have to make PAYG income tax obligations on their behalf.

Are There Any Tax Concessions Available?

Depending on your business, you may be eligible for tax concessions as a sole trader. You may be eligible for a CGT concession on assets that you use in the running of your business. Furthermore, you may be able eligible for GST concessions if your business’s turnover is less than $10million.


Thus, being a sole trader means your business tax obligations fall under your individual tax obligations. Keep in mind, that if you change your business structure, this will mean a change in your business’s tax requirements. If you are still confused, or would like help to manage your tax obligations, it is best to contact a tax lawyer to assist you with your tax needs.

Don’t know where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

Lachlan Ward

Lachlan is an intern at LawPath as part of the content team. He is currently studying a Juris Doctor at the University of Sydney. Lachlan has a keen interest in corporate law and commercial litigation.