8 September 20266 min readby FlowFi

We built a free sole trader tax calculator, here is how to use it

The question we get asked more than any other is some version of "how much should I be putting aside for tax?" It is a fair question with an annoying answer: it depends on your income, your expenses, and whether you also have a job. So we built a calculator that takes those three things and gives you a monthly number. It is free, it does not ask for an email unless you want the results sent to you, and this post explains how to use it well.

The calculator is at flowfi.com.au/tools/sole-trader-tax-calculator.

What it asks for

Three inputs and one switch.

Expected annual business income. What you expect to bill for the year, before expenses. If you are registered for GST, enter the ex-GST figure; GST is not your income.
Business expenses. What you expect to spend earning it: materials, software, phone, vehicle, insurance, the lot, at the business share. A rough figure is fine; the point is the estimate.
Other employment income. Wages from a job, if you have one. This matters more than people expect, because it uses up the tax-free threshold and the lower brackets before your business income arrives.
Include Medicare levy. On by default, because most people pay the 2%. Switch it off if you are exempt or want the income tax figure alone.

Enter what you expect, not what you hope. If the year is uncertain, run it twice, low and high, and set aside somewhere between.

What it gives back

Taxable income: business income minus expenses, plus any wages.
Estimated income tax: worked out band by band at the 2025-26 resident rates: nothing to $18,200, 16% to $45,000, 30% to $135,000, 37% to $190,000, 45% above. The 16% rate is legislated to fall from 1 July 2026, so check the ATO for the current year before relying on a later year's figure.
Medicare levy: 2% of taxable income, if switched on.
Total estimated tax and your effective tax rate, which is total tax as a share of taxable income and is always lower than your marginal rate.
Set aside for tax: the headline number, as a monthly and a weekly amount.
If you entered wages, tax attributable to your business: the extra tax the business adds on top of what your employer already withholds. The set-aside is based on this, because the wages part is already handled.
If you are registered, a GST collected estimate, so you remember that the GST is on top of income tax and not part of it.

Example one: business only

A cleaner expects $60,000 of income and $10,000 of expenses, no other job.

Taxable income: $50,000.
Income tax: 16% of the $26,800 between $18,200 and $45,000 is $4,288, plus 30% of the $5,000 above $45,000 is $1,500. Total $5,788.
Medicare levy: $1,000.
Total: $6,788. Effective rate: 13.6%.
Set aside: about $566 a month, or $131 a week.

If she is registered for GST, one eleventh of each GST-inclusive payment goes into a separate pot on top of that.

Example two: a side business alongside a job

A designer earns $70,000 in wages and expects $25,000 of freelance income with $5,000 of expenses.

Taxable income: $90,000.
Tax on $90,000 with Medicare: $19,588.
Tax on the $70,000 wages alone, which the employer is already withholding: $13,188.
Tax attributable to the business: $6,400, which is 32% of the $20,000 profit, because every dollar of it lands in the 30% bracket plus the levy.
Set aside: about $533 a month.

That 32 cents in the dollar is the number most side-hustlers do not know until the first tax bill. It is why side hustle tax gets its own guide.

Turning the number into a habit

The calculator gives a monthly figure. The habit is a transfer. Open a second account, name it Tax, and move the amount across on a fixed day each month, or a share of each payment as it lands if your income is lumpy. If you are registered for GST, a third account for the GST set-aside keeps the two obligations from blurring.

After your first profitable year the ATO will usually put you on PAYG instalments, which collect the coming year's tax quarterly through your activity statement. The money you set aside becomes the money that pays them. Nothing about the habit changes, except that the ATO now sends the bill four times instead of once.

What the calculator leaves out, on purpose

It is an estimate for planning, not a return.

Tax offsets such as the low income tax offset, which reduce tax for lower incomes. Your actual bill may be a little lower.
HELP and other study loan repayments, which rise with income and are collected through the return.
Deductible super contributions, which reduce taxable income if you make them and lodge a notice of intent. See sole trader super contributions.
PAYG instalments already paid, which are credits against the total.
Non-resident and part-year rates, private health insurance surcharges, and anything else specific to your circumstances.

If any of those apply to you, treat the result as a starting point and talk to your accountant. The point of the calculator is to stop the set-aside being zero.

The other three tools

While we were building it we built three more, all free, all on the tools page.

GST calculator: add or extract GST from a price, or estimate a quarter's 1A and 1B from total sales and purchases.
BAS due dates: the next due date with a countdown, and the full calendar.
Hourly rate calculator: work backwards from the take-home income you want to the rate you need to charge, with tax and super built in.

Each tool has an optional email-the-results box. It sends one email with your numbers and nothing else. No sequence, no newsletter.

When the estimate becomes the real thing

The calculator works on what you expect. FlowFi works on what actually happened: upload a bank statement and it categorises income and expenses, tracks GST, and shows the tax you should have set aside from real figures, updated every time you upload. The calculator is the plan; the app is the record. Start with the plan, then let the record take over.

Estimate your tax and set-aside in a minute with the free sole trader tax calculator, then let FlowFi keep the real figures from your bank statement. 14-day free trial, no card.