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Running your own business as a sole trader or freelancer in Perth offers flexibility and independence — but it also means you’re responsible for every aspect of your finances, including tax. Without an employer to withhold tax or handle superannuation, it’s crucial to have a solid strategy in place. That’s where working with experienced Perth Accountants can make all the difference.
Here are key tax tips to help sole traders and freelancers stay compliant, avoid surprises, and keep more of what you earn.
1. Set Aside Tax from Every Payment
Unlike employees, tax isn’t automatically withheld from your income. It’s up to you to put aside enough money to cover:
Income tax
Medicare levy
GST (if registered)
PAYG instalments (if applicable)
A good rule of thumb is to set aside 25–30% of each payment you receive. This helps avoid a shock when your tax return is due.
2. Know What You Can Claim
You’re entitled to claim deductions for expenses directly related to earning your income. Common deductions for sole traders and freelancers in Perth include:
Home office expenses (internet, electricity, a portion of rent or mortgage interest)
Phone and mobile data usage
Computer equipment and software
Marketing and website costs
Training courses that enhance your current skills
Professional fees, including accountants and legal advice
Subscriptions and memberships to industry bodies
Always keep detailed records and receipts. If in doubt, Perth Accountants can help you determine what’s legitimate and how to calculate your claim correctly.
3. Understand GST Obligations
If your business earns $75,000 or more per year, you must register for GST and include it in your invoices. You’ll also need to lodge Business Activity Statements (BAS) regularly.
Even if you’re under the threshold, voluntary GST registration can sometimes be beneficial — for example, if you incur large expenses you want to claim GST credits on.
Your accountant can assess whether GST registration suits your situation.
4. Track Every Dollar — Digitally
Gone are the days of shoeboxes full of receipts. Digital tools make it easy to:
Track income and expenses in real-time
Reconcile bank transactions
Generate invoices
Automate GST and BAS reporting
Produce reports to help you understand your cash flow
Using platforms like Xero, MYOB, or QuickBooks (and getting help setting them up from an accountant) will make tax time much less stressful.
5. Consider Super Contributions
While you’re not legally required to pay yourself super as a sole trader, contributing to super can:
Reduce your taxable income
Set you up for retirement
Offer tax-effective investment opportunities
You can make personal contributions and claim a tax deduction — up to the concessional contributions cap ($27,500 for most in 2024–25).
Planning this with an accountant ensures you get the tax benefit and stay within the rules.
6. Pay Yourself the Right Way
Sole traders can’t pay themselves a wage like company owners can. Instead, you draw money from the business as personal income. However, it’s important to separate:
Business income and expenses
Personal withdrawals
Tax and GST set-asides
Keeping a separate bank account for your business helps maintain clarity and improves your professional image.
7. Lodge and Pay On Time
Missing lodgement or payment deadlines can result in:
Penalties and interest from the ATO
Cash flow issues if you haven’t budgeted
Loss of credibility with clients or lenders
Your accountant can help you set up a sched
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