Sole trader or company?
Put in a rough annual profit and see an indicative, simplified tax comparison. It's one piece of a bigger decision — but it's the piece everyone asks about first.
subbies and running costs.
Sole trader
Profit is taxed as your personal income.
Effective tax rate ≈ 24%. The money is yours as soon as it's earned — no extra step.
Company
Profit is taxed at a flat rate inside the company.
That money isn't yours yet. Paying it to yourself as wages or dividends adds personal tax — franking credits soften it, but usually don't erase it.
Read this before deciding anything
At $120,000 profit, the headline tax is almost identical — about $29,188 as a sole trader versus $30,000 in a company. At this level, the decision is really about liability protection, admin cost and where the business is heading, not tax.
It's not just about tax
A company also brings limited liability (your house isn't on the line the same way), a cleaner look for bigger contracts, and options for bringing in partners — but it costs more to run: ASIC fees, separate tax returns, stricter rules about taking money out. The right answer depends on your income pattern, family situation, risk and plans. This comparison is deliberately simplified and is not personal advice.
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