How Much Does It Cost to Set Up as a Sole Trader in Australia?

Deepinder Kaur

10 mins read

Published:

20 November 2025

Updated:

29 December 2025

Ready to set up your sole trader business?

If you’re starting a small business, freelancing, or turning a side hustle into real income, you’ve probably found yourself asking two questions: “How much does it cost to set up as a sole trader?” and “Should I just register a company instead?” It’s a common crossroads and a confusing one because a company and a sole trader are completely different business structures with different setup steps, fees and obligations.

This guide cuts through that noise and shows you what actually matters:

How much it costs to start as a sole trader in Australia
What you’ll pay for your ABN, business name, licences and insurance
The ongoing costs of tax, BAS and compliance.

We’ll also touch on DIY vs professional support, and where working with experienced sole trader accountants can genuinely save you time, tax and hassle as your business grows.

Unsure what you need to set up as a sole trader?

Can you register a company as a sole trader?

No, you can’t register a company as a sole trader.

A sole trader and a company (Pty Ltd) are two completely separate structures.

Here’s the simplest way to understand the difference:

Structure	What is it	Costs	Liability	Best for
Sole trader	You and the business are the same legal entity	$0–$300 setup	Unlimited liability	Freelancers, tradies, side hustles, early-stage businesses
Company	A separate legal entity	$611 for setup	Limited liability	Growing/established businesses, higher risk industries

How much does it cost to register as a sole trader in Australia?

Here’s the good news:

It can cost $0 to start a sole trader business.

Registering for an ABN is completely free.

However, most sole traders spend between $100 to $1,500+ depending on:

Whether they need a business name
Industry licences
Insurance
Tools and software
Accounting support

What are the essential costs to set up as a sole trader in Australia?

Here’s a breakdown of the core setup costs every new sole trader should expect in Australia.

Category	Cost	Notes
Australian Business Number (ABN)	$0	ABN application via the Australian Business Register is free
Business name registration	$45: 1 year $104: 3 years	Only needed if trading under a name that is not your own personal name
TFN and GST registrations	$0	If you already have a personal TFN, you’ll use it when lodging your return that includes sole trader income. GST registration is free but required once turnover crosses $75k You’ll need to lodge BAS (usually quarterly). Good bookkeeping saves time and reduces errors

The Complete Guide to Sole Trader GST Registration: When & How to Register

Professional fees for setting up and running a sole trader business

As a sole trader, you can technically DIY a lot of your setup. But in reality, most business owners end up needing some professional help, especially if they want to stay on the ATO’s good side and avoid nasty surprises at tax time.

1. Accounting and tax compliance ($300 – $1,500+ per year)

Even if you’re doing some of the bookkeeping yourself, most sole traders will still have at least some professional compliance costs each year, such as:

Preparing and lodging your individual tax return (including your sole trader business schedule)
Reviewing your records and ensuring income and expenses are classified correctly
Preparing and lodging Business Activity Statement if you’re registered for GST
Offering ad hoc tax advice as things change (buying a vehicle, hiring staff, expanding services, etc.)

For a straightforward sole trader, you might expect anywhere from $300 to $1,500+ per year, depending on:

How complex your affairs are
Whether you’re registered for GST
Whether bookkeeping is bundled in or handled separately

2. Bookkeeping support

Once you’re up and running, the real value is in ongoing support, not just a once-a-year tax return.

BAS & GST: Preparing and lodging BAS, checking GST is coded correctly so you don’t overpay or underpay.
Tax planning: Keeping an eye on profit through the year and lodging your return with all eligible deductions.
Bookkeeping: Categorising transactions, reconciling bank feeds, and keeping your accounts tidy and up to date.

For most sole traders, ongoing support sits around $50–$250+ per month, depending on your transaction volume, GST registration, payroll needs, and how much you want to outsource vs do yourself.

What are the ongoing costs of running a sole trader business?

Once you’re up and running, these are the ongoing costs you’ll need to stay on top of as a sole trader.

Ongoing costs	What it is	Frequency	Typical costs
Income tax	As a sole trader, your business profit is taxed as your personal income at individual marginal tax rates.	Annually (when you lodge your tax return).	No fixed dollar amount depends on your total taxable income. Good records and smart deductions can significantly reduce what you owe.
GST compliance	Once registered, you must collect 10% GST on most sales and report it, minus GST credits on eligible purchases.	Usually quarterly via Business Activity Statements (BAS).	No direct “fee”, but there’s time and/or professional cost: many sole traders pay a bookkeeper/accountant to prepare and lodge BAS accurately.
Superannuation	For you as the owner, super is voluntary, but strongly recommended for long-term wealth. If you employ staff, super for them is compulsory.	Ongoing contributions (timing depends on how you manage your cash flow and employee obligations).	For yourself: whatever you choose to contribute. For employees: legislated % of ordinary time earnings, plus admin time or software to manage payments.
Accounting and tax compliance	Professional help with your annual tax return, reviewing records, plus any BAS and ad hoc tax advice.	Annually (tax return) plus quarterly if BAS is included.	$300–$1,500+ per year, depending on complexity, GST status, and whether bookkeeping is bundled or separate.
Business name renewal	Renewal of your registered business name with ASIC (only if you trade under a name that isn’t your personal legal name).	Every 1 year or 3 years, depending on what you chose.	$45: 1 year $104: 3 years

Other sole trader setup costs

Even after you’ve sorted your ABN and business name, there are practical setup costs that almost every sole trader ends up paying.

Category	What it covers	Typical costs	Notes
Website and domain	Your online “shopfront”, domain name plus a basic website or landing page.	Domain: around $20–$50 per year. Website: from low-cost DIY builders (a small monthly fee) through to custom builds that can run into the thousands.	Not regulated, but very common. Most businesses will at least secure a domain that matches their trading name.
Business bank account	A separate account for business income and expenses.	Many business transaction accounts range from $0 to $10+ per month in account-keeping fees, depending on the bank and product.	Keeping business and personal finances separate makes bookkeeping and tax much easier and is strongly recommended, even though it’s not a legal requirement for sole traders.
Software & subscriptions	Tools to run your business, accounting software, invoicing tools, project management, email, CRM, booking systems, etc	Can range from $0 (free tiers) to $100+ per month, depending on how many tools you use and which plans you choose.	Not a regulatory cost, but very common in practice and worth factoring into your real “cost to operate”.
Business insurance	Cover for things going wrong, for example public liability, professional indemnity, or product liability.	Premiums vary widely by industry and risk profile, but many small sole traders will see annual premiums in the hundreds to low thousands of dollars.	The exact cover you need depends on what you do, where you operate, and contract requirements. Some industries and clients effectively require specific insurance before they’ll work with you.

Avoid overpaying in tax or missing obligations.

Hiring employees as a sole trader

The moment you move from “just me” to hiring staff, you take on the same core obligations as any other Australian employer.

Item	What it covers	Typical obligation	Notes
Wages and salaries	Paying your employees for their work under the relevant award, enterprise agreement or contract.	Depends on award rates and market conditions for your industry and role.	You must at least meet minimum wage and award conditions, including penalties, loadings and allowances where applicable.
Superannuation guarantee	Mandatory employer super contributions on eligible employees’ ordinary time earnings	From 1 July 2025, the super guarantee rate is 12% of ordinary time earnings.	You must pay super at least quarterly to your employees’ nominated funds by the due dates, or risk penalties and loss of deductions.
Workers’ compensation insurance	Insurance that covers employees for work-related injuries or illnesses.	Compulsory in every state and territory once you have employees. Premiums vary based on your state scheme, industry risk rating and total wages.	Each state/territory regulator sets its own rules and rates. You can use tools like ABLIS or your state workers’ comp authority to check exact obligations for your business.
Payroll software / services	Systems to manage wages, PAYG withholding, Single Touch Payroll (STP) reporting and super payments.	Ranges from low-cost software subscriptions (often bundled with accounting software) to outsourced payroll services that charge a fee per employee or per pay run.	STP-enabled software is effectively essential now, you must report payroll data to the ATO digitally via STP when you pay employees.

What are the licensing and trademark costs for sole traders

Depending on your industry, these are the licences and trademark costs you may need to factor in.

Item	What is it	Typical costs
Industry licences and permits	Licences, permits, registrations and approvals required by federal, state/territory or local government to legally operate in your industry (for example food businesses, building and trades, childcare, health, financial services, liquor, security, transport).	Costs are set by the relevant authority and can range from around $100 to several thousand dollars, depending on the type of licence, location and scale of operations.
Trade mark registration (optional)	Registering your brand (name, logo, or both) with IP Australia so you have exclusive rights over it in your chosen classes of goods and services.	As of 2025, standard online applications using IP Australia’s picklist are typically from around $250 per class in official government fees, with additional professional fees if you use an attorney or firm.

DIY vs Sleek: What does it really cost to manage your sole trader accounts?

You absolutely can DIY your sole trader accounts. The real question is whether that’s the best use of your time and what it costs you in missed deductions, admin and stress. Here’s how DIY compares with working with Sleek.

Aspect	DIY sole trader accounting	Working with Sleek
Who it’s best for	Very simple side hustles with low volume and plenty of spare time.	Sole traders who want to grow, stay compliant and get proactive tax support.
Setup	You research ABN, business name, GST and licences yourself.	Sleek guides you through ABN, business name and GST/PAYG so you only register what you need.
Bookkeeping	You categorise every transaction, reconcile bank feeds and chase invoices in your own time.	Sleek handles day-to-day bookkeeping and reconciliations so your numbers are always up to date.
Tax return and year-end	You pull reports together at the last minute and hope you’ve claimed everything correctly.	The dedicated experts prepare your return using clean data and help you claim all eligible deductions.
Tax planning	Mostly reactive, you find out your tax bill after year-end	Proactive, regular visibility on profit so you can plan for tax and cash flow ahead of time.
Risk of errors & ATO issues	Higher risk of mis-coding, late lodgements and missed obligations.	Lower risk, systems, processes and experts focused on compliance and deadlines.
Best if	You’re testing an idea, have very few transactions and enjoy doing admin	You’re serious about growing, want your weekends back, and don’t want to stress about the ATO.
Costs	No professional fee, but you “pay” in time, missed deductions and possible penalties.	Transparent, fixed-fee packages for sole traders, with bookkeeping, BAS and tax bundled.

How Sleek helps sole traders in Australia

Sleek’s services for sole traders take care of registrations, bookkeeping, BAS and tax so you can focus on doing the work, not chasing receipts and decoding ATO rules.

Fast, correct setup: We help you with ABN and business name registration, and guide you through GST/PAYG so you only register for what you actually need.
Clear, practical advice: Get straight answers on structure, deductions, record-keeping and when it makes sense to move from sole trader to a company.
All-in-one accounting support: Bookkeeping, BAS, and year-end tax returns handled under one roof, so your numbers are always up to date and ATO-ready.
Transparent, fixed pricing: Simple, fixed-fee packages for sole traders, no surprise hourly bills or hidden add-ons.

So you stay compliant, stay in control, and stay focused on growing your business, while we handle the rest in the background. Ready to get started? Schedule a call today!

Setting up as a sole trader is easy. Staying compliant isn’t

FAQs on how much does it cost to set up as a sole trader

When should a sole trader think about switching to a company?

It’s worth considering a company structure when:

Your profits are growing and your personal tax rate is climbing
You’re taking on bigger contracts or operating in a higher-risk industry
You’re planning to hire staff, bring in partners or seek investment
You want more separation between your personal assets and business risk

At that point, it’s smart to sit down with an accountant, compare the numbers and map out a planned transition rather than switching in a rush.

If I run multiple ventures under one sole trader ABN, how does that affect my costs?

You still have one ABN, but costs can rise through extra business names, more complex insurance, and combined turnover for GST and tax, which can push you into higher admin and tax planning needs.

If I start as a sole trader and later incorporate, do I “lose” my setup and branding costs?

No, most branding, website and setup costs are already claimed (or claimable) as sole trader expenses, and the business can be formally transferred into a company later with planning around tax and structuring.

Sleek is the preferred partner of entrepreneurs