🇦🇺 Australia · 2026-27 income year
Australia tax calculator: Sole trader vs Pty Ltd
Compare how much tax an online seller pays as a sole trader versus a Pty Ltd company in Australia, using the ATO rates for 1 July 2026 to 30 June 2027, including the new 15% rate.
Australia Seller Profit Tax Comparison (2026-27)
Sole trader (income tax + Medicare levy) vs Pty Ltd company (25% base rate entity)
Sales minus all business costs, before tax.
Australian resident ($18,200 tax-free threshold + Medicare levy)
Sole trader take-home
A$64,880
18.9% effective tax (A$15,120)
Pty Ltd retained profit
A$60,000
25.0% effective tax (A$20,000)
Better structure at this profit
A$4,880
Sole trader keeps A$4,880 more
Sole trader
Pty Ltd
- Kept / retained
- Income / corporate tax
- Medicare levy
Tax bands that apply
Sole trader
- 0% tax-free threshold on A$18,200—
- 15% on A$26,800A$4,020
- 30% on A$35,000A$10,500
- Small business income tax offset (16%, max A$1,000)−A$1,000
- Medicare levy 2%A$1,600
- Income tax (after offsets)
- A$13,520
- Medicare levy
- A$1,600
- Total tax (18.9% of profit)
- A$15,120
- Sole trader take-home
- A$64,880
Pty Ltd company
- 25% base rate entity on A$80,000A$20,000
- Company tax
- A$20,000
- Total tax (25.0% of profit)
- A$20,000
- Pty Ltd retained profit
- A$60,000
Estimate only, not tax advice. It uses official Australia figures (2026-27 income year) and the assumptions listed below this calculator. A client’s real bill depends on their full circumstances, so confirm with a qualified accountant in Australia before deciding.
Rates used (2026-27 income year)
- Resident rates
- 0% to $18,200 · 15% to $45,000 · 30% to $135,000 · 37% to $190,000 · 45% above
- Foreign resident rates
- 30% to $135,000 · 37% to $190,000 · 45% above
- Medicare levy
- 2%, reduced for taxable income under $35,013 (2025-26 thresholds)
- Low income tax offset
- Up to $700, phasing out by $66,667
- Small business income tax offset
- 16% of the tax on business income, up to $1,000
- Company tax
- 25% for base rate entities (turnover under $50m)
How the estimate works
- Medicare levy low-income thresholds for 2026-27 are not yet published, so the 2025-26 thresholds ($28,011 / $35,013) are used. Medicare levy surcharge is not included (it is assumed the client has private hospital cover or is under the threshold).
- No HELP/student loan repayments, superannuation contributions or other offsets.
- Pty Ltd: the company is a base rate entity (turnover under $50 million and no more than 80% passive income) and pays the director no salary. "Profit paid out" treats all after-tax profit as fully franked dividends; franking credits are refundable to residents.
- Foreign resident: Australian-source business profit is taxed at foreign resident rates with no tax-free threshold, no Medicare levy and no low income tax offset. Fully franked dividends paid to foreign residents have no withholding tax.
- The small business income tax offset is applied to sole trader profit for both residents and foreign residents.
Official sources
Figures checked against these pages on 24 October 2026.
- ATO: Tax rates – Australian residents
- ATO: Tax rates – foreign residents
- ATO: Low income tax offset
- ATO: Small business income tax offset
- ATO: Medicare levy reduction for low-income earners
- ATO: Company tax rates
Estimate, not tax advice. This calculator gives a guide figure for comparing structures. It does not know a client’s full situation (other income, family, deductions, treaties, sales tax or VAT), and rates can change. Markify Ecommerce is an ecommerce agency, not a firm of accountants: please confirm any decision with a qualified tax adviser in Australia.
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