Sole trader tax return in Australia: how to lodge it, and what to do if you missed 31 October

Last checked 3 November 2026 against ATO, business.gov.au, TPB and Moneysmart guidance.

A sole trader tax return is not a separate business return. In Australia you report your business income and deductions in your own individual tax return, using an extra "business and professional items" schedule, and the ATO works out the tax. You have to lodge even if your income is below the tax-free threshold, and if you lodge yourself the due date is 31 October.

This guide covers what goes in the return, the business section in myTax, the personal services income (PSI) questions, and your options if the 31 October 2026 deadline has passed. For ABNs, GST, BAS and record-keeping, see our guide to sole trader accounting in Australia.

Do sole traders have to lodge a tax return?

Yes. The ATO says that if you operate your business as a sole trader you must lodge a tax return, even if your income is below the tax-free threshold. It also says you need to lodge if you carried on a business even if the business has not earnt any income, because there is no threshold for business income (ATO, Income tax return).

business.gov.au puts the same rule in plain terms: a sole trader lodges an individual tax return, includes all business income using a separate business schedule, and does not lodge a separate return for the business. You need to lodge even if you make a loss (business.gov.au).

What goes in a sole trader tax return

According to the ATO, a sole trader's return is made up of the individual tax return, including the supplementary section, and the business and professional items schedule. In it you report:

• your business income
• the business deductions you can claim
• other income, such as salary and wages, dividends and rental income
• any deductions you can claim as an individual

You do not have to calculate the tax yourself. The ATO says it works out the amount when you lodge and issues an assessment showing what you owe or your refund. If you paid PAYG instalments during the year, they are credited automatically in that assessment (ATO).

Your profit is taxed at individual rates, so check the ATO's resident tax rates for the income year you are lodging.

Documents to gather before you start

Our editorial checklist, based on what the ATO asks you to report:

1. Your ABN, main business name and main business address.
2. Total business income, from invoices and bank statements.
3. Business expense records, with the business share worked out for mixed-use items.
4. Income statements and other income details (interest, dividends, rent).
5. Records of PAYG instalments paid.

The ATO says you must keep records explaining all transactions relating to your tax affairs, and most business records must be kept for 5 years (ATO record-keeping rules).

How to lodge: myTax, a registered tax agent, or paper

The ATO lists three ways to lodge an individual return: online with myTax, through a registered tax agent, or on paper. It says lodging online or through an agent is the fastest way to get your return finalised (ATO).

myTax. The ATO says myTax is available for all individuals and sole traders who lodge their own return, through a myGov account linked to the ATO. Most third-party information is pre-filled by late July, and refunds generally arrive within 2 weeks (ATO, myTax).

A registered tax agent. The ATO notes that tax agents must be registered with the Tax Practitioners Board (TPB) (ATO). Registered agents are the only people who can charge a fee to prepare your return.

Paper. Still available, but slower.

Find a registered tax agent: browse individual tax return accountants in New South Wales, Victoria, Queensland, Western Australia or South Australia, or search the full Fiscly directory.

Completing the business section in myTax, step by step

The ATO's myTax 2026 instructions for business and professional items apply to the 1 July 2025 to 30 June 2026 income year. The section appears when you select sole trader or business income at "Personalise return" (ATO, myTax 2026 Business and professional items). In summary:

1. Check the pre-fill. If you have an active ABN, the ATO pre-fills your main business name, ABN and main business address, plus information from its Personal services income tool. Check it and correct anything that is out of date.
2. Answer the PSI questions. myTax asks whether you received personal services income. If you did, it walks you through the results test, whether you hold a personal services business determination, the 80% rule, and the unrelated clients, employment and business premises tests. More on this below.
3. Choose your main business or professional activity. If you cannot find a matching description, the ATO suggests using its business industry code tool and entering the description it returns.
4. Enter the number of business activities you ran as a sole trader and in partnership during the year.
5. Select the status of the business: continuing, commenced or ceased.
6. Enter or confirm your income and expenses, then save and review.

The pre-fill note for contractors

The ATO says that if you work as a contractor providing services covered by the taxable payments reporting system, the amounts your clients reported in their Taxable payments annual report (TPAR) are now pre-filled in your return. Most TPAR data is only available after 28 August, so lodging earlier can mean it is missing and lead to amendments later (ATO). If you are a tradie or other contractor, see the ATO's TPAR guidance and check every pre-filled amount against your own invoices.

Personal services income: the questions that change your deductions

The ATO defines personal services income (PSI) as income produced mainly (more than 50%) from your skills or efforts as an individual (ATO, PSI).

What matters is whether the PSI rules apply. The ATO says you can self-assess as a personal services business (PSB), meaning the rules do not apply, if you either meet the results test or meet one of the other PSB tests and pass the 80% rule. The other tests are the unrelated clients test, the employment test and the business premises test (ATO, Working out if the PSI rules apply).

When the PSI rules do apply, the ATO says they affect how you report that income and which deductions you can claim. Even when they do not apply, you still declare the PSI in your return. The answer depends on how your contracts and clients are set up, and the ATO suggests professional advice if you are unsure.

Claiming business deductions correctly

The ATO's rules: the expense must be for your business, you claim only the business portion of a mixed expense, and you need records to prove it. You cannot also deduct the GST part of an expense you claim as a GST credit on your BAS (ATO, Deductions). Our sole trader accounting guide covers deductions in more detail.

The cost of managing your tax affairs is also deductible, including the cost of lodging through a registered tax agent. The ATO says you cannot claim tax advice from someone who is neither a TPB-registered tax agent nor a qualified provider registered with ASIC (ATO, Cost of managing tax affairs).

When is a sole trader tax return due?

The ATO says that if you lodge your own return, it is due by 31 October. If you lodge through a registered tax agent, the agent will tell you when they will lodge (ATO).

Most registered tax agents have a special lodgment program that lets them lodge for clients after 31 October. But the ATO also says that if you are using a tax agent for the first time, or changing agents, you should contact them before 31 October to be part of that program. Your due date then depends on your situation and when you engaged the agent (ATO).

In 2026, 31 October fell on a Saturday. The ATO told agents that they still needed to add new clients and lodge overdue prior-year returns by that date, not the next business day, or those clients would not receive the agent's lodgment program due date for their 2026 return.

Missed 31 October? What to do now

If you have not lodged your 2025–26 return and were not already on a registered agent's client list by 31 October, the ATO's general advice is to get up to date as soon as possible. It says this reduces the risk of penalties and of interest accruing on any tax debt (ATO, Lodge a prior year tax return).

Your options:

• Lodge it yourself in myTax. The ATO says myTax can lodge returns from the 2016 income year onwards, and for 2014 and 2015 if you are eligible.
• Engage a registered tax agent. The ATO notes an agent can prepare and lodge prior-year returns for you. Ask them directly what due date applies to you now, rather than assuming the lodgment program dates.

If you cannot lodge or pay on time, business.gov.au says to contact the ATO as soon as you can. The ATO says the same if you are having difficulty meeting your tax obligations.

Need help catching up? Compare sole trader accountants in New South Wales, Victoria, Queensland, Western Australia or South Australia.

Lodge it yourself, or use a tax agent?

No official guidance says every sole trader needs an agent. Moneysmart says an accountant can help you stay organised, and that you remain legally responsible for what is lodged even if someone else prepares it (Moneysmart). Here is our editorial view of where the line usually falls.

Lodging in myTax yourself is often manageable if:

• you have one simple business activity and tidy records
• you have no PSI, or clearly pass the results test
• no prior-year returns are outstanding

A registered tax agent is worth considering if:

• you earn PSI and are not sure whether the rules apply
• you have missed 31 October, have several years outstanding, or have received ATO letters
• you are a contractor whose TPAR pre-fill does not match your records
• you are also registered for GST and want your BAS and return to reconcile (see BAS and GST accountants in NSW)
• you work in building and construction and want someone who knows the industry: try tradies and construction accountants in Queensland, NSW or Victoria

Whoever you use, check them on the TPB register first. The TPB lists the risks of using an unregistered preparer, including losing protection from some ATO penalties and having no appropriate professional indemnity insurance (TPB). Our guide to choosing an accountant in Australia walks through the checks and the questions to ask.

Frequently asked questions

Do sole traders lodge a separate business tax return?

No. A sole trader lodges an individual tax return and includes business income and deductions in the business and professional items schedule. You do not lodge a separate return for the business.

Do I have to lodge if my business made a loss or earned nothing?

Yes. The ATO says you must lodge if you carried on a business, even if it earned no income, and sole traders must lodge even if their income is below the tax-free threshold. business.gov.au says you need to lodge even if you make a loss.

When is my sole trader tax return due?

If you lodge it yourself, by 31 October. If you lodge through a registered tax agent who added you to their client list in time, the agent will tell you your due date under their lodgment program.

I missed 31 October. Can I still use a tax agent?

Yes. The ATO says a registered tax agent can prepare and lodge prior-year and overdue returns. Ask them which due date now applies to you, and lodge as soon as you can to reduce the risk of penalties and interest.

What is the 80% rule for sole traders?

It is part of the personal services income rules. If you earn PSI and do not meet the results test, you generally need to pass the 80% rule and one other personal services business test to self-assess as a personal services business. myTax asks whether you received 80% or more of your PSI from one source.

Start your shortlist

Ready to hand over this year's return, or catch up on a missed one? Browse the Fiscly accountant directory by state, region or speciality, then check your top two or three on the TPB register before you book.

Are you an accountant or tax agent? Claim or add your Fiscly profile so sole traders searching in your area can find you.

General information only. This article is not financial, tax, legal or accounting advice and does not consider your personal circumstances. Rules, due dates and thresholds change, so check the linked ATO, business.gov.au, TPB and Moneysmart pages and speak to a registered tax practitioner about your situation. Fiscly does not recommend or endorse any individual accountant listed in the directory.