Hourly Rate Calculator Tax Calculator Upwork Fee Calculator Fiverr Profit Calculator PeoplePerHour Fees Freelancer.com Fees Guru Fees 99designs Fees Contra Fees Toptal Pay Calculator Compare All Platforms Project Cost Estimator Salary → Freelance Rate Day Rate Calculator Profit Margin Calculator Late Payment Calculator About
🇦🇺 Sole Trader · 2025-26 · Updated June 2026

Australia Freelance
Tax Calculator — 2025-26

Estimate your income tax, Medicare levy, PAYG instalments, and GST obligations as an Australian sole trader. Covers all ATO income tax brackets for 2025-26 and the July 2026 rate change.

Updated June 2026: Superannuation Guarantee rate increased to 12% from 1 July 2025. From 1 July 2026, the second income tax bracket drops from 16% to 15% — saving up to $268/year. GST registration threshold remains $75,000.
$18,200
Tax-free threshold 2025-26
2%
Medicare Levy rate
$75K
GST registration threshold
12%
Super rate from Jul 2025
$ AUD
$ AUD
$ AUD
Net income
$—
after expenses
Total tax
$—
income tax + Medicare
Take-home pay
$—
per year
⚠️ Estimate only. This calculator covers income tax brackets, the Low Income Tax Offset (LITO), and Medicare levy for sole traders using the standard 2% rate with the low-income phase-in. It does not model the Medicare Levy Surcharge, HECS/HELP repayments, private health insurance rebate, franking credits, capital gains, or other personal tax offsets. Consult a registered tax agent for your full tax position.

PAYG instalments are prepayments of your expected income tax, collected quarterly by the ATO. You are automatically entered into PAYG once your instalment income reaches $4,000 and your prior year tax bill reaches $1,000.

$ AUD
ATO sets your actual instalment amount based on your prior year's tax return — not the current year's estimate. This calculator shows what you should budget based on your expected income. If your income has dropped significantly, you can lodge a T variation to reduce your instalments before each quarterly due date.
⚠️ PAYG instalment amounts shown here are estimates based on current year projected income. Your actual ATO-notified instalment may differ. New freelancers in their first year typically won't enter PAYG until their first tax return is assessed. Instalments are credited against your total tax when you lodge your annual return.

You must register for GST once your annual turnover reaches $75,000. This threshold has been unchanged since GST was introduced in 2000. You must register within 21 days of exceeding it.

$ AUD
Voluntary registration: If your turnover is below $75,000, you can still register voluntarily. This lets you claim GST credits (input tax credits) on business expenses — useful if your clients are GST-registered businesses who prefer tax invoices.
⚠️ GST turnover uses a rolling 12-month measure. You must register if your turnover for the current or projected next 12 months exceeds $75,000. Non-profit organisations have a higher threshold of $150,000. Some supplies are GST-free (e.g. certain exports and financial services) — check with the ATO if your services may be exempt.

How Australian Freelance Tax is Calculated

As a sole trader in Australia, your tax is based on your net income — gross revenue minus allowable business expenses and deductible super contributions. No tax is withheld at source. You calculate and pay through your annual tax return lodged with the ATO, with quarterly PAYG prepayments if your tax bill exceeds $1,000.

Three obligations apply to your net income:

1. Income Tax

Charged on taxable income using five progressive brackets. The first $18,200 is tax-free. Rates rise from 16% to 45% on higher income. Lower earners benefit from the Low Income Tax Offset (LITO) — up to $700 off your tax bill — which phases out completely at $66,667. From 1 July 2026, the 16% bracket drops to 15% for income between $18,201 and $45,000.

2. Medicare Levy

An additional 2% of taxable income funds the public healthcare system. Most sole traders earning above $36,509 pay the full 2%. There is a phase-in zone between $29,207 and $36,509 where the levy is lower. Note: if you earn above $93,000 (single, 2025-26) and don't hold private hospital cover, the Medicare Levy Surcharge (an extra 1%–1.5%) may also apply — this calculator does not model the MLS.

3. PAYG Instalments

Once your instalment income reaches $4,000 and your prior year tax bill reaches $1,000, the ATO enrols you in PAYG — quarterly prepayments of your expected tax. Instalments are due 28 Oct, 28 Feb, 28 Apr, and 28 Jul. They are credited against your final tax when you lodge your annual return. New freelancers typically pay a lump sum in year one; PAYG kicks in from year two.

Formula
Gross revenue − Business expenses − Super contributions = Taxable income → Income tax + Medicare levy

Key Dates for Australian Freelancers

Australia's financial year runs from 1 July to 30 June. PAYG instalments and BAS lodgements follow the same quarterly due dates — 28 days after the end of each quarter.

28
Jul
Q4 PAYG instalment + BAS due

Covers the April–June quarter (the final quarter of the financial year). This is also when you should have a clear picture of your full year income to check whether your PAYG payments match your actual liability.

31
Oct
Tax return lodgement deadline (self-lodging)

If you lodge your own return (not through a registered tax agent), the deadline is 31 October. Any tax owing from the return is due by this date. Using a registered tax agent typically extends your deadline to 15 May of the following year.

28
Oct
Q1 PAYG instalment + BAS due

Covers the July–September quarter. This is the first instalment of the new financial year. If you want to vary your instalment amount, you must do so on or before this due date.

28
Feb
Q2 PAYG instalment + BAS due

Covers the October–December quarter. A good time to review your year-to-date income and check whether your PAYG rate reflects your actual earnings.

28
Apr
Q3 PAYG instalment + BAS due

Covers the January–March quarter. Three quarters through the financial year — a clear picture of your total income is emerging. Lodge a T variation now if your income is materially different from the prior year.

30
Jun
End of financial year (EOFY)

Last day to make deductible super contributions for the current financial year (lodge your Notice of Intent before lodging your return). Also the cutoff for purchasing equipment you want to depreciate in this year's return.

Business Expenses Australian Freelancers Can Deduct

Deductible business expenses reduce your taxable income directly — lowering both your income tax and Medicare levy. The ATO requires that each expense has a direct connection to earning your business income and is not private or domestic in nature.

Category What you can claim
Home office ATO fixed rate method: 70 cents per work hour (covers electricity, internet, phone use, and stationery — but not rent or mortgage interest separately). Or use the actual cost method to claim a proportionate share of rent, utilities, and internet based on dedicated workspace area. Must have a dedicated work area.
Equipment & technology Laptop, monitors, microphone, camera, and other tools used for business. Items costing under the instant asset write-off threshold (check ATO for the current year limit) may be fully expensed immediately; items above that threshold are depreciated over their effective life.
Software & subscriptions Adobe Creative Cloud, project management tools, cloud storage, antivirus, industry databases, and other SaaS tools used for business are deductible in full. Pro-rate if used for both personal and business purposes.
Professional fees Accountant and bookkeeper fees, legal fees for business contracts, professional indemnity insurance, business bank account fees, professional association memberships.
Marketing & website Website hosting, domain registration, paid advertising (Google Ads, Meta), portfolio platform fees, business cards, and promotional materials — all deductible.
Vehicle Logbook method: claim actual vehicle running costs multiplied by your business-use percentage (requires a 12-week logbook). Cents-per-km method: claim up to 5,000 business km per year at the ATO rate (check ato.gov.au for the current rate). Keep records of all business trips.
Training & education Courses, workshops, and conferences that maintain or improve skills in your current trade are deductible. Training for a new career or unrelated field is generally not deductible.
Super as a tax strategy: Personal concessional super contributions (up to the $30,000 annual cap) are deducted from your taxable income — exactly like a business expense. A freelancer earning $100,000 who contributes $10,000 to super reduces their taxable income to $90,000, saving approximately $3,000 in income tax (at the 30% bracket). The contribution is taxed at only 15% inside the fund. Lodge your Notice of Intent with your super fund before lodging your tax return.

Frequently Asked Questions

How much tax does a freelancer pay in Australia?
An Australian sole trader pays progressive income tax plus a 2% Medicare levy. For 2025-26, there's no tax on the first $18,200, then 16% up to $45,000, 30% up to $135,000, 37% up to $190,000, and 45% above that. Lower earners benefit from the Low Income Tax Offset (LITO) — up to $700 — which phases out at $66,667. Unlike employees, no tax is withheld at source, so you pay as a lump sum on assessment (or via quarterly PAYG instalments if your bill exceeds $1,000). From 1 July 2026, the 16% bracket drops to 15%.
Do I need to register for GST as an Australian sole trader?
You must register for GST once your annual turnover reaches $75,000 — whether in the past 12 months or projected for the next 12 months. You have 21 days to register after crossing the threshold. Once registered, you charge 10% GST on all taxable invoices and lodge a BAS quarterly, but you can also claim GST credits on your business expenses. Voluntary registration below $75,000 is allowed and can be advantageous if your clients are GST-registered businesses or if you have significant deductible expenses.
What are PAYG instalments and when do they apply to me?
PAYG instalments are quarterly prepayments of your expected income tax. The ATO automatically enrols you once your instalment income reaches $4,000 and your prior year tax bill reaches $1,000. Instalments are due four times a year: 28 October (Q1), 28 February (Q2), 28 April (Q3), and 28 July (Q4). The ATO calculates your instalment amount based on your last lodged tax return. If your income drops significantly, you can lodge a T variation to reduce your payments. Most new freelancers pay a lump sum in year one and enter PAYG from year two.
Can I claim super contributions as a tax deduction as a sole trader?
Yes. Sole traders are not required to contribute to super, but you can make personal concessional contributions up to the $30,000 annual cap and claim a full tax deduction. To claim, you must lodge a "Notice of Intent to Claim" with your super fund before lodging your tax return and receiving your assessment. The contribution is taxed at only 15% inside the fund — well below the 30%–37% rates most working freelancers face — making this one of the most tax-effective strategies available. Unused concessional cap amounts from the prior five years can also be carried forward if your total super balance is below $500,000.
What business expenses can Australian freelancers deduct?
Your taxable income as a sole trader is gross revenue minus allowable business expenses. Common deductions: home office (70c/hr fixed rate method, or actual costs), equipment and technology, software subscriptions, accounting and legal fees, marketing and website costs, vehicle expenses (logbook or cents-per-km), and training directly related to your current work. Concessional super contributions up to $30,000 are also deductible. The ATO requires a direct connection between each expense and earning your business income — personal or domestic expenses are not deductible even if you use them occasionally for work.
Is it better to operate as a sole trader or company in Australia?
For most freelancers, the sole trader structure is simpler and more tax-effective at lower incomes. Sole traders benefit from the $18,200 tax-free threshold and the LITO offset — advantages companies don't receive. A base-rate entity company pays a flat 25% on retained profits, which becomes attractive once your income consistently exceeds the 37% bracket (above $135,000) — but profits you draw as salary or dividends are still taxed at your personal rate (franking credits offset the company tax already paid). The company structure adds compliance costs: separate tax return, ASIC annual review fee, higher accounting fees. Most freelancers are better served as sole traders until revenue is consistently above $150,000.

Related Tools

More tax and rate calculators for freelancers worldwide.

🌍International Tax Hub 🏛️IR35 Calculator 🇬🇧UK Self-Employed Tax 🧾UK VAT Calculator 🇨🇦Canada Tax Calculator 💰Salary → Freelance Rate 📅Day Rate Calculator 📊Profit Margin ⚖️Compare Platforms