A sole trader business structure is a person trading as the individual legally responsible for all aspects of the business.

This includes any debts and losses, which can’t be shared with others. This is the simplest, and relatively inexpensive business structure that you can choose when starting a business in Australia.


As a sole trader, you’ll generally make all the decisions about starting and running your business, although you can employ people to help you.


If you operate your business as a sole trader, you must lodge the following (even if your income is below the tax-free threshold):

tax return for individuals including the supplementary section

business and professional items schedule for individuals.


In your return, report your taxable income or loss. This includes:

your assessable business income less the business deductions you can claim

any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income, less any allowable deductions against this income.


You don’t have to work out the amount of tax you are liable to pay. ATO will do this for you when you lodge and issue an assessment showing either the amount of tax owing to us or your refund. If you have paid PAYG instalments during the income year, ATO will automatically credit these instalments to you in your assessment.