Sole Trader vs Company Tax Calculator — Australia 2025-26
See exactly how much more (or less) you keep after tax as a sole trader versus a Pty Ltd company. Accounts for income tax, Medicare Levy, franking credits, LITO, HECS, and ASIC fees. Side-by-side comparison in 30 seconds.
Your Details
Net profit from your business
Non-business income (default $0)
How you take profit from the company
Sole Trader
✓ Better for youEffective rate: 29.9%
Pty Ltd Company
Effective rate: 30.5%
Sole trader saves you $1,310/year
At your income level of $150,000, the sole trader structure returns $1,310 more per year after accounting for ASIC fees and company setup costs. The Small Business Tax Offset and LITO reduce your effective sole trader rate significantly at this income level.
5-Year Cumulative Take-Home
| Period | Sole Trader | Company | Difference |
|---|---|---|---|
| Year 1 | $105,183 | $103,873 | -$1,310 |
| Year 2 | $210,366 | $207,746 | -$2,620 |
| Year 3 | $315,549 | $311,619 | -$3,930 |
| Year 4 | $420,732 | $415,492 | -$5,240 |
| Year 5 | $525,915 | $519,365 | -$6,550 |
Frequently Asked Questions
Is it worth setting up a company in Australia?+
At profits above ~$150,000–$180,000, the 25% company tax rate plus franked dividend distribution often results in a lower effective rate than sole trader marginal rates. But companies have ASIC fees and more administrative complexity — model both structures for your specific situation.
At what income should I switch from sole trader to company?+
There's no single answer — it depends on your income, HECS debt, private health status, and extraction method. Generally, modelling makes sense from $100,000+ in business profit. Our calculator shows the exact dollar difference for you.
What is the company tax rate in Australia 2025-26?+
25% for base rate entities (turnover under $50M, 80%+ active income). The general rate for larger companies is 30%.
What are the disadvantages of a company structure in Australia?+
ASIC fees (~$310/year), more complex tax returns, no 50% CGT discount on assets, higher accounting costs, and inability to directly offset business losses against personal income.
This tool provides estimates for informational purposes only using FY 2025-26 tax rates. Individual circumstances vary significantly. This does not constitute financial, tax, or legal advice. For advice specific to your situation, consult a registered tax agent or financial adviser.