How much tax do Australians pay self-employed?

In Australia, self-employed individuals are generally subject to income tax and other taxes similar to those paid by employees. The amount of tax they paid depends on several factors, including their taxable income, business structure, and available deductions.

The income tax rates for the 2022-2023 financial year for Australian residents are as follows:

  • 0% on income up to AUD 18,200
  • 19% on income between AUD 18,201 and AUD 45,000
  • 32.5% on income between AUD 45,001 and AUD 120,000
  • 37% on income between AUD 120,001 and AUD 180,000
  • 45% on income over AUD 180,001

Additionally, the Medicare Levy, which helps fund the country’s healthcare system, is generally payable at a rate of 2% of taxable income for most individuals.

Self-employed individuals may also be required to pay Goods and Services Tax (GST) if their annual turnover exceeds the GST threshold, which is currently AUD 75,000. The GST rate is 10% and applies to the sale of most goods and services in Australia.

It’s worth noting that self-employed individuals can claim deductions for business-related expenses, which can reduce their taxable income. Common deductions include expenses such as home office costs, vehicle expenses, professional fees, and business-related travel expenses.

Again, it’s essential to consult with a tax professional or the ATO to ensure you have the most accurate and up-to-date information based on your specific situation.