Freelance Tax Set-Aside Calculator — Australia
Australian sole traders pay income tax at individual rates plus the 2% Medicare levy — there’s no separate self-employment tax, but there’s also no employer paying your superannuation. The ATO’s Pay As You Go (PAYG) instalment system moves you onto quarterly prepayments after your first notable tax bill. Many freelancers voluntarily set aside 9–12% extra for super, since nobody else will.
2025–26 income year. Data reviewed August 2026.
What’s in this estimate
- The tax-free threshold is $18,200; the Medicare levy adds 2% above the low-income threshold.
- Register for GST once turnover passes $75,000 — then you’re invoicing +10% and remitting quarterly.
- PAYG instalments typically begin automatically after your first year with tax payable over $500.
- Super is not compulsory for sole traders — but concessional contributions are tax-deductible.
Primary source: ATO — Individual income tax rates. Rates and thresholds are reviewed when new tax-year figures are published; always confirm current numbers against the official source before filing.
How to use the number
The headline percentage applies to gross revenue, not profit — because invoices are what actually land in your account. When a client pays $5,000, move that percentage into a separate tax account the same day. The buffer input adds a small cushion on top of the pure calculation: prepayment systems and mid-year rate changes punish exact planning.
Frequently asked questions
How much should an Australian freelancer set aside for tax?
Around 25–30% of profit covers most sole traders under $135,000, rising to 35%+ in the top brackets once the Medicare levy is included. Add roughly 10% more if you want to pay yourself superannuation like an employer would.
Do I need an ABN?
Yes — clients must withhold 47% from payments if you invoice without an ABN. Registration is free and immediate for most sole traders.
What about GST on my invoices?
Below $75,000 turnover GST registration is optional. Once registered you add 10% GST to invoices, claim credits on business purchases, and lodge Business Activity Statements (usually quarterly).
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Simplified estimate for planning only — not tax advice. It assumes all profit is taxed as self-employment income for a single individual with no other income, and excludes credits, reliefs and regional variations noted above. Confirm withATO — Individual income tax rates or an accountant.Full disclaimer.