Sole Trader vs Company Calculator

Our Sole Trader vs Company Calculator compares the estimated tax outcomes of both structures, helping you see how your business profit could be affected by your choice.

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Understand the Tax Impact of Your Business Structure

Your business structure can make a real difference to how much tax you pay and how much profit you retain. Enter your profit before tax and indicate whether the company qualifies as a base rate entity.

You can then compare the estimated tax payable, net profit after tax and effective tax rate for both structures. Use these figures to see how the tax outcome changes at your current profit level. The results are estimates and don’t account for every cost, deduction or personal circumstance that may affect your final tax position.

Choosing a Structure? Look Beyond the Tax Rate

Our tax professionals can assess your circumstances and help you understand the broader financial and tax implications of operating as a sole trader or company.

Every Calculator You Need, in One Place

One settlement figure, many moving parts. Explore the rest of your purchase numbers before you commit with our other calculators.

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AAD Taxation got me a refund I never knew I was entitled to. Professional, quick, and explained everything in plain English. They found deductions my previous accountant completely missed. Absolutely outstanding!

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As a small business owner, BAS and payroll was a nightmare. AAD took everything off my plate and the fixed pricing means no surprises. Their team responds within hours — incredible service, highly recommended.

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I had 3 overdue tax returns and was terrified of the ATO. AAD sorted everything, negotiated my penalties down, and set up a payment plan. Now I’m fully up to date. They literally saved me thousands!

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FAQs

Got Questions? We've Got Answers

Answers to common questions about sole traders, companies and tax.

What is the difference between a company and a sole trader?

A sole trader operates the business in their own name and generally reports the business income in their individual tax return. A company is a separate legal entity that lodges its own tax return and pays tax on its taxable income.

Is it always easier and less costly to file taxes as a company than as a sole proprietor?

No. The tax outcome depends on factors such as your business profit, personal income, company tax rate and how you use or distribute business profits. A company may provide a different tax outcome at some profit levels, but it isn’t automatically the better option.

How does this calculator compare the two structures?

You enter your annual business profit and select whether the company qualifies as a base rate entity. The calculator then estimates the tax payable under each structure and displays the resulting after-tax profit and effective tax rate.

What is a base rate entity?

A base rate entity is a company that meets the relevant eligibility requirements for the lower company tax rate. The rules include conditions relating to aggregated turnover and the proportion of the company’s income that is passive income.

Does the calculator include all costs of running a company?

No. The comparison focuses on the estimated tax outcomes shown by the calculator. Company setup, accounting, ASIC compliance, payroll, administration and other costs may also need to be considered when choosing a structure.

Can I change from a sole trader to a company later?

You might be able to change how your business is set up as things change. However, moving a business into a company can have tax, asset transfer and administrative implications, so professional advice before making the change is recommended.

Does the calculator tell me which structure I should choose?

No. It provides a tax comparison based on the figures entered. The most suitable structure depends on your individual circumstances, business plans, risk profile and financial goals.

What happens to company profits after company tax?

A company pays tax on its taxable income, but the treatment of profits retained in the company or later distributed to shareholders can involve additional tax considerations. Dividends and franking credits should therefore be considered when assessing the overall tax outcome.

Take the Next Step for Your Business

Whether you’re starting out or considering a restructure, our team can help you understand your options.