Taxes for freelancers and the self-employed in Australia in 2025

This guide touches on tax rates, registration requirements, deductions, and compliance obligations for Australian freelancers and sole traders to help you get a flavour. We’ll also introduce services which may be able to help you, like professional tax advisors and Wise Business – ideal for managing your business finances across AUD and many other currencies.

The tax system for freelancers and self-employed workers in Australia

The tax authority in Australia is called the Australian Taxation Office (ATO). Most people who live and work in Australia need to submit an annual tax return, including people who are employed or who do not earn enough to pay tax. As a freelancer or self employed professional you’ll need to complete and file your tax return annually – usually by the end of October.

There’s no specific freelancer tax in Australia – instead you’ll pay income tax based on your earnings, and any other taxes which may apply such as GST and the Medicare levy.

Exactly what tax you pay will depend on your residency, the amount you earn and other factors – and while the Australian taxation system is relatively straightforward it may not be familiar if you’re an expat. This guide walks through some key pointers to help you navigate your way through the tax registration, filing and payment process.

Tax is complicated – and especially so if you’re an international freelancer or sole trader as you may have other duties and liabilities in your home country as well as Australia. Get professional advice to make sure you submit and pay taxes in the correct way, based on your unique situation.

What taxes do freelancers have to pay in Australia?

Freelancers may pay various different taxes, depending on the exact nature of their business and the income generated. Taxes can include:

• Income tax: Payable on all taxable income, at progressive rates which vary depending on your income and residency
• Medicare levies: Basic levies of 2% apply on most people, but this cost is waived for low earners. Some very high earners pay additional surcharges which can add an extra 1.5% to the total amount paid
• Goods and services tax (GST): Similar to VAT in some countries, freelancers who have a turnover of above 75,000 AUD annually must register and collect GST – you can also voluntarily register if you have a lower turnover
• Super contributions: As a freelancer you may not be obliged to pay super contributions yourself, but you can choose to make voluntary super payments instead – these are held in a retirement account and can be drawn as a pension in later life

Income tax for freelancers in Australia

If you’re a freelancer or sole trader in Australia you’ll pay tax on your earnings under the personal income tax (PIT) rules.

Individuals who are considered to be tax resident in Australia will pay tax to the ATO on worldwide earnings, while non-residents are likely to only pay on Australian derived income. The tax is progressive, with different rates based on your residency.

The PIT rates for Australian residents in 2025/6 are as follows:

Taxable income	Tax rate
Up to 18,200 AUD	Nil
18,201 AUD – 45,000 AUD	16%
45,001 AUD – 135,000 AUD	30%
135,001 AUD – 190,000 AUD	37%
190,001 AUD or more	45%

The PIT rates for Australian non-residents in 2025/6 are as follows:

Taxable income	Tax rate
Up to 135,000 AUD	30%
135,001 AUD – 190,00 AUD	37%
190,001 AUD or more	45%

How to register as freelancer for taxes in Australia

As a freelancer or sole trader in Australia you’ll pay your taxes using your own personal tax file number (TFN). If you don’t already have this, you can apply from the Australian government website – there’s also a handy tool to find your TFN if you can’t remember it.

As a freelancer in Australia you may also choose to register as a sole trader and get an Australian business number (ABN) – or in some cases you might not be required to register for an ABN. Larger businesses which need to register for goods and services tax (GST) are obliged to have an ABN.

If you decide to register for an ABN you’ll need the following;

• Your own tax file number (TFN)
• The TFNs of any partners, directors or other key stakeholders
• Your own proof of identity
• Details of your business activities and location
• Contact information for your business

Other information may be required, which you can find on the Australian Business Register website.

Tax deductions and credits for freelancers in Australia

You may find you qualify for small business tax concessions or deductions in Australia. There are small business concessions based on aggregated turnover as well as specific concessions for people working in niche or demand industries. If you have a turnover of 2 million AUD or under, you may be able to access a capital gains tax reduction to reduce, disregard or defer some or all of a capital gain from an active asset used in a small business. Other schemes are offered for larger businesses.

Other possible deductions depend on your work type. There are some possible deductions for working from home for example, which are aimed to support people who incur additional personal expense running a home office

If you’re thinking about claiming deductions based on working from home you can either use the fixed rate method to claim a deduction based on the number of hours worked, or the actual cost method which requires you to keep detailed expenses. It’s a good idea to get professional advice if you intend to claim this deduction to make sure you can make the best possible use of the opportunity.

If you’re making claims against your expenses, keeping food records is essential. A Wise Business account could help, with detailed transaction reports and statements which can help you keep track of all your business spending across different currencies.

How to file self-employed tax returns in Australia

The Australian financial year is from 1 July to 31 June. Tax filing must usually be complete by 31 October of the year in question.

As a freelancer or sole trader, you’ll submit your business income to the ATO under your own TFN. This is done online – you’ll need to enter your business earnings under the appropriate section of the form which you can access on the ATO tax portal. From late July every year you’ll be able to access prepopulated forms which capture some key information, which you can add to, to complete your tax return more conveniently.

You’ll be informed of any owed tax by the ATO, and you can also use the ATO’s tax calculator for Australia to get a heads up on the amount you may need to pay.

GST obligations for self-employed workers

You may need to register for GST – similar to VAT in other countries – in Australia. You’ll collect GST from customers and pass this on to the government as a GST payment. This depends on your business turnover. Here’s a summary of the key factors:

Feature	GST for self-employed workers in Australia
GST rate	10%
Registration threshold	Businesses earning 75,000 AUD or more annually
Voluntary registration	Allowed – register for 12 months or more only
Filing frequency	Quarterly for businesses turning over 20 million AUD or less Monthly for larger businesses Annually for voluntarily registered businesses

Social security contributions for self-employed workers

As a self-employed person in Australia you’ll need to pay the Medicare levy of 2%. Your bill is calculated by the ATO when you submit your regular annual tax filing.

Medicare levies may be waived for some low earners, but if your income is above around 97,000 AUD you may need to pay the Medicare Surcharge levy which is an additional 1% – 1.5%, if you choose not to have your own private medical insurance. Income for this purpose is not calculated in quite the same way that taxable income is usually worked out – so you may need to get professional advice to check the details for your own situation.

Corporate tax considerations

If you would prefer to register your business as a company in Australia the taxes you pay may be different to those you pay as a freelancer or sole trader. As a sole trader or freelancer your work income is treated in the same way as any other personal income. Companies are subject to different tax rules.

There are benefits and drawbacks to both approaches – as a sole trader you’re fully liable for any debts incurred by your company, while having a company limits your liability, for example. But on the other hand, setting up a company is more complex than registering as a sole trader, with additional expenses and reporting rules. Think carefully about the entity type that works best for you before you decide to register.

Corporate tax rates in Australia are 30% with no tax free amount. This may be reduced to 25% for some eligible small businesses.

Tax penalties and compliance in Australia

ATO interest and penalties may apply if you file incorrectly or file late – or if you don;t make all your tax payments.

If you’re late in paying, or if your tax situation changes which results in owing more than anticipated, you may have to pay interest to the ATO. Interest rates are adjusted quarterly.

If you give inaccurate information to the ATO you may have to pay a penalty.

If the errors do not result in you paying less tax than you should, the penalties are decided by issuing a charge of a certain number of penalty units, which cost 330 AUD each. An unintentional mistake costs 20 units for example, while recklessly giving inaccurate information will come with a fine of 60 units.

If the errors in your filing mean you paid too little, you may be subject to percentage fines which are calculated based on the amount underpaid and the type of error. A simple mistake may mean a fine of 25% the underpaid amount, while intentionally withholding information can cost you 75% of the underpayment.

Finding professional help in Australia

You may find it’s a good idea to get professional advice on your Australian freelance and self employment taxes.

Options can include tax preparation services, accounting firms, non-profit tax assistance, or registered tax agents which you can locate on the Tax Practitioners Board website.

There are plenty of digital services which can help you prepare your Australian tax filing, which all have their own features and fees. Compare a few before you select one, to get the best fit for your specific situation. Some options to consider include:

• Quinn Group
• EY Australia
• BDO Australia

International considerations for expat freelancers

If you’re an expat working freelance in Australia you may have tax considerations locally and also in your home country. Some countries require their citizens to report and pay taxes on worldwide income, regardless of their tax residency. This means that you might owe money to more than one country’s tax authorities.

In many cases, countries have double taxation agreements to avoid people paying tax twice on the same income. However, there may still be reporting requirements – such as FATCA reporting for US citizens.

The added complexity of managing your tax obligations across different countries can mean that getting professional advice is invaluable.

If you’re managing your taxes across currencies, using Wise Business can help reduce your currency exchange costs. Get a Wise Business account today for a one time fee, and access mid-market currency exchange with low transparent fees, and easy ways to send, receive and hold a broad range of currencies.

Important business terms and phrases glossary for Australia

Name	Description
Australian Taxation Office	National tax authority in Australia
Australian Business Number (ABN)	Business registration number issued to businesses in Australia (not required by all freelancers)
Tax file number (TFN)	Australian individual tax ID number
Medicare Levy	Australia’s social security tax which covers some public health costs
Medicare Surcharge Levy	Higher rate of Medicare contribution payable by high earners in specific situations
Superannuation	Employer and employee contributions paid into retirement savings accounts (RSAs), for pension use and in some cases buying a home
Goods and Services Tax (GST)	Australia’s consumption tax – businesses with a turnover of 75,000 AUD or more must register to collect and pay this tax

Conclusion

If you’re self-employed or working freelance in Australia you’ll need to look after your own tax affairs, including filing and making payments of income tax and other costs like the Medicare levy. As an expat you might also find you have tax obligations in your home country.

Generally the ATO makes it quite simple to manage your taxes as a self employed person in Australia – but there will be action you need to take to complete your returns and make any payments in full and on time. Get professional advice if you need it – and while you’re looking out for great partners to make it easier to manage your business finances, why not also take a look at Wise Business. Open an account easily online or in an app, to hold 40+ currencies, get paid in 20+ currencies with account information and send money to 140+ countries with mid-market rates.

FAQ

1. Do freelancers pay tax in Australia?

Yes. Freelancers who are resident in Australia for tax purposes should pay tax on their worldwide income under the ATO’s personal income tax rules.

2. What is a freelance tax code in Australia?

Freelancers in Australia should register for a TFN (tax file number) which allows them to register their taxes, calculate what’s owed and make payments.

3. Do I need to register as a freelancer in Australia?

You may choose to register as a sole trader in Australia. This is obligatory in some situations, such as if you meet the GST threshold for turnover, and can be done voluntarily in other circumstances.

4. Can I be self-employed and employed in Australia?

You can be employed in Australia and also work for yourself. The most important thing is to report all your income from different sources accurately to the ATO to make sure your tax affairs are in order.

5. Can I freelance in Australia with a student visa?

You’ll need to check your specific visa conditions to see if you can freelance in Australia with your student visa. This is often not possible, as visa conditions can include a ban on working as a contractor or registering a business.

Useful resources

• Australian Taxation Office (ATO) – landing page for the ATO with navigation to all other specialist pages
• Australian government – working as an independent contractor
• Australian government – tax on multiple sources of income
• Australian government – differences between sole trader and business tax
• Australian Business Register – register as a sole trader
• Australian government – What to do at tax time, on the government’s public facing tax portal
• Australian government – Get a tax file number, or find your number if you already have one
• ATO – Tax rates for Australian residents
• ATO simple tax calculator – Helps to work out tax owed on your taxable income for the full income year.
• ATO income tax estimator – Fuller tool to help to work out your tax refund or debt estimate
• ATO – Tax and Super as a visa holder in Australia
• PwC – Australia tax summary and overview prepared by consultancy PwC
• ATO Tax Help – ATO support for people earning under 70,000 AUD to submit their tax return
• National Tax Clinics – Tax support and advice
• Tax Practitioners Board – Helpful website to find a registered tax agent