ABN Sole Trader vs PAYG Tax Calculator 2026

Results

PAYG Employee

Gross Income
$100,000.00
Income Tax
-$20,788.00
Medicare Levy
-$2,000.00
Take-Home Pay
$77,212.00

ABN Sole Trader

Gross Income
$100,000.00
Business Expenses
-$10,000.00
Voluntary Super
-$5,000.00
Taxable Income
$85,000.00
Income Tax
-$16,288.00
Medicare Levy
-$1,700.00
Take-Home Pay
$67,012.00
PAYG earns $10,200.00 more per year

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Frequently Asked Questions

What is the main tax difference between ABN and PAYG?

A PAYG employee pays income tax on their full salary with tax withheld each pay cycle. An ABN sole trader pays tax on net profit (revenue minus deductible expenses), which can reduce the taxable income — but must also cover their own super and business costs.

Can I claim business expenses as an ABN contractor?

Yes. Legitimate business expenses such as equipment, software, home office costs, and professional development are deductible, reducing your taxable income.

Do I need to pay super as an ABN sole trader?

You are not legally required to pay yourself superannuation as a sole trader, but voluntary contributions are deductible and reduce your tax. Some clients may also be required to pay the Superannuation Guarantee on your behalf if you are a deemed employee.

What is the tax-free threshold for ABN income?

The same $18,200 tax-free threshold applies to ABN income as to PAYG income. However, ABN earners must lodge a tax return regardless of income.

How does Medicare Levy apply to ABN income?

Medicare Levy of 2% applies to your taxable income regardless of whether you earn via ABN or PAYG. Low-income thresholds and reductions also apply equally.