How to Become a Sole Trader in Australia: What to Register

Short answer: Becoming a sole trader in Australia takes one registration — a free ABN from the Australian Business Register. You do not get a business TFN; your personal tax file number covers both. GST registration becomes compulsory only at $75,000 of turnover in any 12 months, or from your first fare if you drive rideshare. You lodge one individual tax return with a business schedule after 30 June, due 31 October if you prepare it yourself. Keep records five years.

Australia sits between the extremes: lighter than incorporating a company, heavier than New Zealand, where nothing at all is required. The registrations that genuinely apply are short in number and mostly free, and the ATO publishes each threshold plainly. What follows is the list that actually applies in week one, and the list that only applies later. Once you are trading, sole trader taxes in Australia covers the numbers in depth.

Do I need to register to become a sole trader in Australia?

You are a sole trader from the moment you carry on a business on your own account. There is no sole trader register to join and no licence to hold. What exists instead is a set of registrations triggered by specific facts about what you do and how much you bill.

Situation	Registration required?
Carrying on a business under your own name	ABN — free, and unavoidable in practice
Trading under a business name (“Northside Electrical”)	Business name with ASIC — separate from the ABN, and it carries a fee
GST turnover reaches $75,000 in any 12 months	GST — within 21 days
Taxi, limousine or ride-sourcing travel	GST from the first dollar, whatever the turnover
Paying employees	PAYG withholding, plus super obligations
Claiming fuel tax credits	GST, then fuel tax credits

An ABN is not, strictly, forced on you. The withholding rule makes it feel that way. Where a supplier does not quote an ABN and the payment for goods or services is more than $75 excluding GST, the payer must withhold at the top rate of tax — currently 47%, being the 45% top marginal rate plus the 2% Medicare levy — and send it to the ATO. No business client wants that paperwork, and no contractor wants to wait until they lodge to recover it. Quoting your ABN on every invoice is what gets you paid in full; the rest of the detail is in how to invoice as a sole trader in Australia.

The ABN is also public. ABN Lookup shows your entity name, status, entity type, GST registration and the state and postcode of your main business location — so trading under your own legal name puts your own name on the register.

Do I need a separate TFN for my business?

No. A sole trader uses their existing personal tax file number for the business — the ATO states this directly. Business income and personal income sit under the same number, which is why there is only one tax return.

Identifier	Do you need it?	Cost
TFN	Yes — your existing personal one	Free
ABN	Yes, in practice	Free
Business name (ASIC)	Only if trading under a name that is not your own	ASIC fee
GST registration	Only once you meet the turnover test	Free
ACN	Only if you incorporate a company	A different structure entirely

If you do not hold a TFN yet, you can apply for one during the ABN application. Companies, trusts and partnerships are separate entities and do have their own TFNs, which is where the confusion usually starts.

How do I apply for an ABN?

Free, online, through the Australian Business Register at abr.gov.au. Quoting your TFN speeds identity matching, and a complete application can return an ABN immediately. Applying through business.gov.au instead bundles the ABN with business name, GST and PAYG withholding registration in one pass.

Entitlement is the part people skim: you must be carrying on or starting an enterprise in Australia. A hobby is not an enterprise, and an ABN obtained on the strength of one occasional sale can be reviewed or cancelled. Genuinely commercial, ongoing work qualifies.

When do I have to register for GST?

The threshold is $75,000 of GST turnover, and it is not a financial-year figure. The ATO applies two tests, and reaching the threshold on either one is enough.

Test	What it measures
Current GST turnover	This month plus the previous 11 months
Projected GST turnover	This month plus the next 11 months

Once you cross it you must register within 21 days, and while you are unregistered the ATO’s instruction is to check turnover every month, not annually. Turnover means gross income less GST — not profit — so a courier billing $80,000 with $35,000 of running costs is over the threshold, not under it.

Three points that catch people:

• Rideshare and taxi drivers register from the first dollar. Providing taxi, limousine or ride-sourcing travel means compulsory GST registration regardless of turnover — the most common expensive mistake in the gig economy.
• Missing the deadline is not neutral. If registration was required and you did not register, you may owe GST on all sales since that date even though you never charged it, plus penalties and interest.
• Voluntary registration commits you. Registering below the threshold generally locks you in for at least 12 months of activity statements.

GST is 10%. Once registered you charge it, claim credits on business purchases, and lodge a BAS — quarterly for almost every sole trader, due 28 October, 28 February, 28 April and 28 July. Lodging online may make you eligible for an extra two weeks on every quarter except the December one, which already carries a one-month extension.

What tax will I pay, and at what rates?

You pay income tax on net profit — business income minus allowable expenses — at ordinary individual rates. There is no separate business tax and no separate business rate.

Rates for 2025–26, the year that closed on 30 June 2026:

Taxable income	Tax on this income
$0 – $18,200	Nil
$18,201 – $45,000	16c for each $1 over $18,200
$45,001 – $135,000	$4,288 + 30c for each $1 over $45,000
$135,001 – $190,000	$31,288 + 37c for each $1 over $135,000
$190,001 and over	$51,638 + 45c for each $1 over $190,000

These exclude the Medicare levy of 2%. From 1 July 2026 the 16% rate falls to 15%, and to 14% from 1 July 2027 — both legislated, and both affecting the year you are trading in now rather than the return you are about to lodge. The ATO’s new legislation page carries the current position.

One offset matters from day one precisely because you do not claim it: the small business income tax offset is 16% of the tax attributable to your net small business income, capped at $1,000 a year, for aggregated turnover under $5 million. The ATO calculates it and shows it on your notice of assessment.

When is my first return due, and what do I lodge?

The income year runs 1 July to 30 June. A sole trader lodges one return — the individual return, plus the supplementary section and the business and professional items schedule. There is no separate business return.

What	When
Income year ends	30 June
Return due — preparing it yourself	31 October (next business day if it falls on a weekend)
Payment if you lodged between 1 July and 31 October	21 November (next business day if it falls on a weekend)
Return due — most clients of a registered tax agent	Generally 15 May the following year
Quarterly BAS, if GST-registered	28 Oct, 28 Feb, 28 Apr, 28 Jul

Two practical notes. First, there is no income threshold for business income: if you carried on a business you lodge, even at a loss and even below $18,200. Second, from Tax Time 2026 the ATO pre-fills amounts reported about you through Taxable Payments Annual Reports if you provide services covered by the taxable payments reporting system — and the businesses that pay you have until 28 August to lodge those reports, so lodging in July risks an omission, an amendment and a clawed-back refund. The mechanics are in the sole trader tax return explained.

Late lodgment carries a penalty of one penalty unit per 28 days overdue, to a maximum of five. The penalty unit rose to $364 on 1 July 2026, so the ceiling for an individual is now $1,820, and it is not deductible.

When do PAYG instalments start?

Not in year one, generally — which is exactly why year two hurts. The ATO enters an individual into PAYG instalments automatically when all three of these are true of your latest return and assessment: instalment income of $4,000 or more, tax payable of $1,000 or more, and estimated notional tax of $500 or more.

In your first year there is no prior return, so nothing is payable during the year and the whole bill arrives at assessment. Instalments for the following year then begin while you are still settling the first. No rule is broken; the timing is simply unkind to anyone who spent year one’s tax money. Setting aside a fixed percentage of every payment from week one is the only reliable defence.

What should I set up in week one?

None of this needs an accountant, and all of it is easier before there is a backlog.

1. Apply for the ABN at abr.gov.au, with your TFN to hand.
2. Decide whether you need a business name, and register it with ASIC if you are trading as anything other than your own legal name.
3. Open a separate bank account. Not legally required, but it turns five years of records from a forensic exercise into a readable one.
4. Open a second account for tax and move a set percentage across on every payment received.
5. Set your invoice numbering and never break the sequence. Put your ABN on every invoice.
6. Start the receipt habit on day one, not in June. What counts and what does not is covered in expenses and receipts for sole traders.
7. Start a kilometre log the first time you drive for work. The cents per kilometre rate is 88 cents for 2025–26 — the year you are lodging for now — capped at 5,000 business kilometres per car per income year. The ATO had not published a 2026–27 rate at the time of writing, so check the ATO’s cents per kilometre page for the current year’s rate before you claim. The details, and when the logbook method beats it, are in cents per kilometre and car expenses.
8. Diarise 30 June, 31 October and 21 November, plus the BAS quarters if you register for GST.
9. Set a monthly reminder to check turnover against the $75,000 GST test.

How do I keep five years of records without handing them to a cloud service?

The ATO’s rule is five years, and the clock is more specific than most people assume: five years from when you prepared or obtained the record, or completed the transaction it relates to, whichever is later. Depreciating and CGT assets run longer — the whole period you hold the asset, plus five years after disposal. Records must be in English or readily convertible to English, unalterable, and producible on request. Where an expense is part business and part private, you need documents showing how you worked out the business share.

Keel: Invoice Maker & Receipts is built for exactly that pile. Invoices go out as PDFs with your own numbering, logo and brand colour; receipts are photographed and read on device by Apple Intelligence for merchant, total, tax and date; trips are logged with distance and purpose; the year exports as one file for your accountant. There is no account, no sign-in and no bank connection. The App Store privacy label reads “Data Not Collected.”

The honest tradeoff: nothing imports itself. With no bank feed, every receipt is a photograph you take and every trip is a log you start — more discipline in the moment, a smaller pile at 30 June, and what actually counts as a receipt becomes a question you answer as you go rather than the following October.

Keel is free with unlimited invoices, receipts and mileage; Keel Pro is a one-time $249.99 Lifetime purchase, not a subscription. Keel on the App Store.

Frequently asked questions

How do I register as a sole trader in Australia? You apply for an ABN free through the Australian Business Register at abr.gov.au. There is no separate sole trader register. Quote your TFN in the application to speed identity matching — a complete application can return an ABN immediately. Register a business name with ASIC only if you trade under something other than your own legal name.

Do I need an ABN to work as a freelancer in Australia? In practice, yes. Where a supplier does not quote an ABN and the payment for goods or services exceeds $75 excluding GST, the payer must withhold at the top rate of tax — currently 47%, being the 45% top marginal rate plus the 2% Medicare levy — and remit it to the ATO. You would recover it eventually through your return, but no client wants that admin and no contractor wants the cashflow hit. The ABN is free.

Do I need a separate TFN for my sole trader business? No. A sole trader uses their existing personal tax file number for both business and personal dealings with the ATO. You do not get a second one. Companies, trusts and partnerships are separate legal entities and do have their own TFNs. If you have no TFN yet, you can apply for one within the ABN application.

When do I have to register for GST as a sole trader? When your GST turnover reaches $75,000 — measured either over the current month plus the previous 11, or the current month plus the next 11. You then have 21 days to register. Drivers providing taxi, limousine or ride-sourcing travel must register from the first dollar, regardless of turnover.

When is my first tax return due as a sole trader in Australia? The income year ends 30 June and the return is due 31 October if you prepare it yourself, with payment due 21 November where you lodged between 1 July and 31 October. Where either date falls on a weekend or public holiday, the ATO allows you to lodge or pay on the next business day. Clients of a registered tax agent generally get until 15 May. You must lodge even if the business made a loss or earned nothing.

How long do I have to keep records as a sole trader in Australia? Five years, running from when you prepared or obtained the record or completed the transaction, whichever is later. Depreciating and CGT assets run longer — the whole ownership period plus five years after disposal. Records must be in English or readily convertible to English, unalterable, and producible to the ATO on request.

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This article is general information, not tax advice. Consult a qualified Australian tax professional.