🗓️ Life event guide
Going Freelance in Australia
How to set your rates, structure your finances, register for ABN and GST, and stay on top of tax as a sole trader.
💼 Life event guide·10 min read·Updated March 2026
The setup checklist
1
Register for an ABNFree
abr.gov.au — 15 minutes. Your ABN identifies you as a business entity for invoicing and tax purposes.
2
Register a business name (if needed)$44/yr
Only required if you trade under a name other than your own. Optional for many sole traders.
3
Open a business bank account$0–$15/mo
Keeps business and personal finances separate. Saves hours at tax time.
4
Set up bookkeeping software$20–$35/mo
Xero, MYOB, or QuickBooks. Essential for tracking income, expenses, and GST if registered.
5
Get professional indemnity insurance$800–$2,500/yr
Most corporate clients require it before they'll engage you.
6
Register for GST (if near $75k threshold)Free
Required above $75,000 turnover. Optional but may be advantageous below that.
7
Find a tax agent or accountant$1,000–$2,500/yr
Worth every dollar — they'll find deductions you'd miss and keep your BAS correct.
Setting your rate
The most common mistake: dividing your target salary by 260 days. That ignores tax, super, leave, sick days, and overhead. The right formula:
Day rate = (Target income × overhead buffer) ÷ billable days
Then add 15–20% for non-billable time (admin, proposals, gaps between contracts).
| Target income | Min day rate | Recommended |
|---|---|---|
| $80,000/yr | $600 | $720 |
| $100,000/yr | $750 | $900 |
| $120,000/yr | $900 | $1,080 |
| $150,000/yr | $1,125 | $1,350 |
Based on 200 billable days/yr, 50% overhead buffer. Calculate your exact rate →
Tax-deductible expenses
As a sole trader, legitimate business expenses reduce your taxable income. Common deductions:
✓Home office (occupancy + running costs)
✓Professional indemnity insurance
✓Accountant and bookkeeper fees
✓Subscriptions and software
✓Professional development and training
✓Work-related phone and internet
✓Equipment and technology
✓Industry memberships and subscriptions
✓Business travel
✓Marketing and advertising
Frequently asked questions
Do I need an ABN to freelance in Australia?
Yes. If you're carrying on a business (even part-time), you should have an ABN. Without one, clients must withhold 47% tax (the top marginal rate) from any payment to you under the no-ABN withholding rules. Registering is free and takes 15 minutes at abr.gov.au. You can use your individual TFN as a sole trader — you don't need a separate company structure to start.
When do I need to register for GST?
GST registration is mandatory once your annual turnover from your business activity reaches $75,000. Below that, it's optional. Once registered, you add 10% GST to invoices, collect it, and remit it to the ATO quarterly via a Business Activity Statement (BAS). You can also claim GST credits on your business expenses. Registration is free.
How does tax work as a sole trader?
As a sole trader, your business income is treated as personal income and taxed at individual rates. You pay income tax on profit (income minus deductible expenses). You also pay the Medicare Levy (2%). Unlike employees, tax isn't withheld from your income — you pay it in quarterly PAYG instalments once the ATO sets you up for them, and reconcile at tax time. Keep receipts for all business expenses.
Do I have to pay super as a freelancer?
You're not required to pay yourself super (unlike employees), but you should. The Super Guarantee is 12% for employees — many financial advisers recommend matching this rate when setting your day rate. You can contribute to any super fund as a sole trader and claim a tax deduction on personal contributions, which is a significant tax advantage.
What insurance do I need as a freelancer?
Professional indemnity insurance is required by most corporate clients and protects you if a client claims your work caused financial loss. Public liability covers third-party injury or property damage. Income protection is strongly recommended — you have no sick pay as a contractor. Most tech and professional service freelancers need PI ($800–$2,000/yr) at minimum.