Sole Trader Tax Return Australia: Which Form and How to Lodge

Short answer: A sole trader lodges one return — the individual tax return, its supplementary section, and the business and professional items schedule. There is no separate business return. Your income and expenses are worked out on the schedule, and the net income or loss carries into the supplementary section. Most people lodge through myTax in ATO online services. The 2026 return covers 1 July 2025 to 30 June 2026, is due 31 October 2026 if you lodge it yourself, and tax owing is due 21 November 2026.

The confusion is usually about the form. People expect an ABN to come with its own return, the way a company does. It does not: the business result is a section of your personal return, sitting alongside salary, interest and everything else. Every figure below comes from the Australian Taxation Office and assumes a resident sole trader with a standard 30 June year end. For the rates that turn profit into a tax bill, see sole trader taxes in Australia; if you have not registered yet, start with how to become a sole trader.

Which tax return does a sole trader lodge in Australia?

One return, made of up to three parts.

Part	What it is	Do you need it?
Individual tax return	The main return everyone lodges	Always
Individual tax return, supplementary section	Extra income and deduction questions, numbered 13 onwards	Yes — business income sits here
Business and professional items schedule	Where the business figures are actually worked out	Yes, for a sole trader

The ATO states plainly that if you operate as a sole trader you lodge a tax return for individuals, including the supplementary section, and the business and professional items schedule for individuals. The schedule is what you complete if you report business income, personal services income or deferred non-commercial business losses in the supplementary section. Item and question numbering is reset each year, so check the current-year instructions rather than relying on last year’s numbers.

You must lodge even if the business made nothing, or made a loss. The ATO’s wording is direct: “You need to lodge a tax return if you carried on a business, even if your business hasn’t earnt any income”, and if you operate as a sole trader “you must lodge a tax return, even if your income is below the tax-free threshold”. The $18,200 tax-free threshold decides how much tax you pay, not whether you file.

How do I lodge a sole trader tax return?

Channel	Who it suits	Notes
myTax, in ATO online services for individuals and sole traders, via myGov	Most one-person businesses	Free, pre-filled, gives an estimate before you submit
Registered tax agent	Anyone with a complex year, or wanting later deadlines	Engage them early — the extended dates generally need you on their client list by 31 October
Paper	Rare, and much slower	50 business days to process — see below

myTax is the default. The ATO confirms it is available to all individuals and sole traders lodging their own return, reached through myGov or the ATO app, and that you complete the business section inside myTax rather than on a separate form. It shows an estimate and breakdown of your refund or debt before you submit. The myDeductions tool in the ATO app records expenses and trips during the year, and those records can be uploaded to pre-fill the return.

Paper is possible but slow: the ATO processes paper returns within 50 business days, against 12 business days for most online lodgments. If you need paper forms, request them through the ATO’s forms and instructions pages or by phoning the ATO, as not every schedule is offered as a download each year.

Which sections do I actually complete as a sole trader?

The schedule is a list of numbered items. Most will not apply to you; items that do not apply are left blank. The item numbers below reflect the schedule’s long-standing layout and are given as a guide to what the schedule asks for — the ATO republishes the schedule and its instructions each year, so confirm the numbering against the current year’s forms and instructions before you fill anything in.

Item	What it asks	Typical sole trader
P1	Personal services income	Often — see below
P2	Description of main business or professional activity	Yes
P3	Number of business activities	Yes
P4	Status of business — continuing, commenced or ceased	Yes
P5	Business name of main business, and ABN	Yes
P6	Business address of main business	Yes
P8	Business income and expenses	Yes — this is the core
P9	Business loss activity details	Only if you made a loss
P10	Small business entity simplified depreciation	If you used the instant asset write-off or the pool
P13 / P14	Trade debtors / trade creditors at 30 June	If you account on an accruals basis
P15 / P16	Total salary and wage expenses; payments to associated persons	Only if you employ, or pay a relative
P17–P20	Depreciating assets first deducted, and termination values	If you bought or sold business assets
P21	Trading stock election	Only if you hold stock

The personal services income item matters more than its position suggests. If your income is mainly a reward for your personal skills or effort rather than for a product, a structure or the use of assets, it may be personal services income, and the PSI rules can restrict what you deduct. The ATO’s rule for self-assessing as a personal services business is that “you must either meet the results test, or meet another PSB test and pass the 80% rule” — the other tests being the unrelated clients, employment and business premises tests. Work through the ATO’s PSI pages rather than guessing, because each test has its own detailed conditions.

How does my business profit get onto the tax return?

Not as turnover. You enter the components and the schedule produces a net figure.

Part of the business income and expenses item	What goes in it
Business income	Gross payments where an ABN was not quoted, payments under a voluntary agreement or labour hire arrangement, assessable government industry payments, and other business income
Expenses	Opening stock, purchases, closing stock; contractor and commission expenses; superannuation for employees; bad debts; lease, rent and interest; depreciation; motor vehicle; repairs and maintenance; all other expenses
Reconciliation items	The adjustments that turn the accounting result into the taxable one
Net income or loss from business	The single figure that carries forward

Reconciliation items are the step most people have never heard of. Accounting profit and taxable profit are rarely the same number — accounting depreciation is not tax depreciation, and some expenses are not deductible at all. The reconciliation section is where those differences get declared rather than quietly buried in the expense lines.

The net figure goes to the net income or loss from business question in the supplementary section, joins your other income, and is taxed at ordinary individual rates plus the Medicare levy, which the ATO puts at 2% of your taxable income. One offset you do not have to claim: the small business income tax offset reduces the tax on your net small business income by 16%, capped at $1,000 per person per year, where aggregated turnover is under $5 million. That 16% rate and $1,000 cap have applied from 2021-22 onwards. The ATO works it out from your return and shows the amount on your notice of assessment.

Where do my business deductions go on the return?

In the business section — not in the work-related deduction questions. This is the most common self-preparer error. The D-numbered questions on the individual return — D1 work-related car expenses, D2 work-related travel expenses, D5 other work-related expenses — are for expenses you incur as an employee, which is how the ATO’s own instructions describe them. A sole trader’s costs belong in the business schedule. If you drive for the business, the claim goes in the schedule’s motor vehicle expenses line, not at D1. Someone with both a job and a business may use both parts of the return, but each expense follows the income it relates to and never appears twice.

The ATO’s cents per kilometre rate is 88c per kilometre for 2025-26 (the same rate as 2024-25), capped at 5,000 business kilometres per car, so a maximum claim of $4,400 on the 2026 return. The ATO has not yet published a rate for 2026-27, so check the cents per kilometre method page before relying on a figure for next year. The logbook method has no kilometre cap but requires a logbook covering at least 12 continuous weeks that is broadly representative of your travel, plus receipts for your actual running costs. Cents per kilometre versus the logbook sets the two side by side, and expenses and receipts for sole traders covers what you must hold to support either.

Two deductions sole traders claim constantly sit outside the schedule. Personal superannuation contributions are claimed in the deductions part of the supplementary section, and only once the fund has acknowledged your notice of intent to claim. The cost of managing your tax affairs, including registered agent fees, is D10 on the main return.

When is the sole trader tax return due, and when should I lodge?

Obligation	Date, for the year ended 30 June 2026
Lodge, preparing it yourself	31 October 2026
Pay, on a self-lodged return	21 November 2026
Lodge through an agent, most clients	15 May 2027
Lodge through an agent, if the latest return produced a liability of $20,000 or more	31 March 2027
Lodge through an agent, if any prior year return was outstanding at 30 June 2026	31 October 2026

Three of those dates land on a Saturday in this cycle — 31 October 2026, 21 November 2026 and 15 May 2027. The ATO’s rule covers it: “When a due date falls on a Saturday, Sunday or public holiday, you can lodge or pay on the first business day after without incurring a penalty or general interest charge.” The agent dates come from the ATO’s registered agent lodgment program, and reaching them generally depends on being on the agent’s books — the ATO tells first-time clients to contact an agent before 31 October to be part of their lodgment program.

Due and sensible are different things. Payers of contractor services lodge their Taxable Payments Annual Report by 28 August each year, so third-party data about your income keeps arriving well after 1 July. Lodging in July or early August risks omitting income you will later have to amend, with the refund clawed back. Pre-fill is not a complete picture either: cash work and private clients never appear in it.

Late lodgment attracts, in the ATO’s words, “one penalty unit for every 28 days (or part thereof) that the document is overdue, up to a maximum of 5 penalty units”. The penalty unit is $364 on or after 1 July 2026, so the ceiling for an individual is $1,820. The ATO says it will warn you by phone or in writing before applying the penalty, and that it generally will not issue a penalty notice where a late-lodged return results in a refund or a nil result — but that is stated practice, not entitlement.

How do I pay what the return says I owe?

The estimate myTax shows before you submit is not the bill. The notice of assessment is, and it carries the amount and the due date. The ATO says most returns lodged online are processed within 12 business days; paper returns are processed within 50 business days.

Lodge any outstanding activity statements and pay any PAYG instalments first, so those credits land in the assessment rather than sitting unmatched. Instalments paid during the year are offset against the final liability — they are not an extra tax.

Then pay. Every payment needs your unique payment reference number, which you enter in the reference field; the ATO explains where to find yours in how to pay. BPAY — the ATO’s biller code is 75556 — and payments made through ATO online services are the quickest routes; card payments work but carry a fee charged by the card provider, not the ATO. If you cannot pay in full, many individuals and sole traders can set up a payment plan themselves through ATO online services, with a phone line for larger or more complex debts; the ATO publishes the current self-service limits on that page. Note that a debt on a payment plan “continues to accrue GIC, which compounds daily”.

Interest runs on what is outstanding: the general interest charge was 11.43% a year for the July–September 2026 quarter (up from 10.96% for April–June 2026), and it is reset quarterly, so check the ATO’s GIC rates for the quarter you are in. GIC and shortfall interest charges incurred on or after 1 July 2025 are no longer deductible.

The trap in a first year of trading is the absence of instalments. With no prior return, the ATO has nothing to base PAYG instalments on, so the whole first bill arrives at once, months after the income was earned and usually spent.

What records sit behind the return, and where does Keel fit?

Nothing is attached to the return. You enter figures; the evidence stays with you. The ATO’s business rule is five years, and it is precise about when the clock starts: “the 5-year retention period for each record starts from when you prepared or obtained the record or completed the transactions or acts those records relate to, whichever is later”. Some records must be kept longer than five years — the ATO sets out the exceptions in its record-keeping rules for business. The business schedule is only as good as the invoices and receipts behind it.

Keel: Invoice Maker & Receipts, by Ilura Technology OÜ, is built for that stretch of the job. It runs entirely on your iPhone: no account, no sign-in, no bank connection, no cloud sync. Its App Store privacy label reads “Data Not Collected”.

The honest tradeoff is that nothing imports itself. There is no bank feed reconciling overnight — you raise the invoice, you photograph the receipt (Apple Intelligence reads the merchant, total, tax and date on device), you log the trip. In exchange the records stay in your hands, the ledger is append-only and hash-chained, and at 30 June the Accountant Pack exports the whole year as one CSV plus a one-page summary PDF — the shape someone needs to fill in the business schedule. On the invoicing side, how to invoice as a sole trader covers what has to appear on the bill.

The free tier gives you unlimited invoices, receipts and mileage, with a “Made with Keel” footer on invoices. Keel Pro is a one-time $249.99 Lifetime purchase, not a subscription. Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

What tax return does a sole trader lodge in Australia? The individual tax return, plus the supplementary section and the business and professional items schedule. There is no separate business return and no separate return for your ABN. Business income and expenses are worked out on the schedule, and the resulting net income or loss is reported in the supplementary section alongside your other income.

How do I lodge a sole trader tax return online? Through myTax, inside ATO online services for individuals and sole traders, reached through myGov or the ATO app. The ATO says myTax is available to all individuals and sole traders lodging their own return, and you complete the business section within myTax rather than on a separate form. It is free, pre-fills what the ATO already knows, and shows an estimate and breakdown of your refund or debt before you submit.

Do I need to lodge a tax return if my business made no money? Yes. If you carried on a business you must lodge, even if it earned nothing or made a loss, and even if your income is below the $18,200 tax-free threshold. The ATO states there is no threshold for business income. A loss year is worth lodging anyway, because losses may be available against later income.

What is the business and professional items schedule? It is the part of the individual return where a sole trader’s business figures are worked out — business description, ABN, income, expenses, reconciliation items and net profit or loss. The ATO lists it as one of the three things a sole trader lodges, alongside the individual return and its supplementary section. The ATO republishes it each year, so use the current year’s version.

When is the sole trader tax return due in Australia? 31 October if you prepare it yourself, for the year ended the previous 30 June. Where a due date falls on a Saturday, Sunday or public holiday, the ATO lets you lodge or pay on the first business day after without penalty or interest. Clients of a registered tax agent generally have until 15 May, or 31 March where the latest return produced a liability of $20,000 or more.

How do I pay the tax owing on my sole trader return? The notice of assessment sets the amount and due date — 21 November is the ATO’s payment date for a return you lodge yourself. Pay by BPAY using the ATO’s biller code 75556, or through ATO online services, quoting your unique payment reference number; card payments attract a fee charged by the card provider. If you cannot pay in full, many individuals and sole traders can arrange a payment plan through ATO online services, though interest keeps compounding daily on the balance.

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