If you run a business under your own name in Australia, the calendar has one date circled in red: 31 October 2026. That is the day self-lodgers must have their 2025-26 income tax return in the hands of the Australian Taxation Office (ATO). The 2025-26 income year ran from 1 July 2025 to 30 June 2026, and for sole traders and other ABN holders who prepare their own return, the clock is now running. This guide walks through the deadline, what you actually need to report, how your business profit is taxed, and what a late return costs.
The deadline that matters: 31 October 2026
The general rule is simple. If you lodge your own income tax return, whether online through myTax in your myGov account or on paper, it is due by 31 October following the end of the income year. For the year ended 30 June 2026, that means 31 October 2026.
There is one practical wrinkle worth knowing. In 2026, 31 October falls on a Saturday. When a due date lands on a weekend or public holiday, the ATO accepts lodgment and payment on the next business day without penalty, which pushes the effective cut-off to Monday 2 November 2026. Treat 31 October as your target anyway, because building in a buffer protects you if anything goes wrong at the last minute.
You can start lodging from 1 July 2026, but rushing in on day one is rarely wise. Employers, banks, health funds and government agencies report your data to the ATO through July, and that information flows into the myTax pre-fill. Most self-lodgers get the cleanest result by waiting until late July or August, when the pre-fill is complete.
Who counts as a self-lodger
You are a self-lodger if you prepare and submit your return yourself rather than through a registered tax agent. For most sole traders this means logging into myGov, opening the ATO service, and using myTax. The system pre-fills your salary and wage income, interest, dividends and private health details, then guides you through the sections you add manually, including your business income and expenses.
Being a self-lodger keeps you on the standard 31 October deadline. There is no automatic extension for lodging on your own, so if you know your affairs are complex or you are likely to run late, it is worth deciding early whether to bring in a professional.
myTax is free and available around the clock, and for most single-person businesses it handles the business schedule without any trouble. The main reason sole traders come unstuck is not the software but the data: unreconciled bank accounts, missing invoices, or expenses claimed without a receipt to back them up. If your books are tidy, self-lodging a straightforward sole trader return often takes under an hour.
Using a registered tax agent: a later deadline with a catch
Registered tax agents operate under a lodgment program that gives their clients later due dates, often well into the following year and in many cases as late as 15 May 2027. That extension can ease cash flow and give you more time to gather records.
The catch is the one most people miss. To access an agent's extended dates, you generally need to be on that agent's client list by 31 October 2026. If you leave it until November to appoint an agent, you have already missed the self-lodger deadline and you may not qualify for the extended program for that year. If you want the longer runway, engage your agent before the October cut-off, not after it.
Key dates, rates and penalties at a glance
| Item | Detail for the 2025-26 income year |
|---|---|
| Income year covered | 1 July 2025 to 30 June 2026 |
| Self-lodger due date | 31 October 2026 (a Saturday, so effectively Monday 2 November 2026) |
| myTax lodgment opens | 1 July 2026 (pre-fill usually complete late July) |
| Tax agent clients | Later dates apply, but you must be on the agent's books by 31 October 2026 |
| Tax-free threshold | $18,200 |
| Resident rate, $18,201 to $45,000 | 16 cents per dollar over $18,200 |
| Resident rate, $45,001 to $135,000 | 30 cents per dollar over $45,000, plus $4,288 |
| Resident rate, $135,001 to $190,000 | 37 cents per dollar over $135,000, plus $31,288 |
| Resident rate, $190,001 and over | 45 cents per dollar over $190,000, plus $51,638 |
| GST registration threshold | $75,000 in annual turnover |
| Failure To Lodge penalty | 1 penalty unit per 28 days late, maximum 5 units |
| Penalty unit value from 1 July 2026 | $364 (up from $330) |
Rates above exclude the Medicare levy, which is generally 2 per cent of taxable income. You can pressure-test your own numbers with our Australian sole trader tax calculator before you lodge.
What sole traders must report: the business schedule
As a sole trader you and your business are the same legal person. There is no separate company return. Instead, your return includes a business schedule (the business and professional items section in myTax) where you report your gross business income and claim your deductible business expenses. The net figure, your business profit, then flows into your personal return alongside any wages, interest or other income.
Practically, this means you need your records in order before you start: invoices issued, income received, and every deductible cost from tools and software to a portion of home office and vehicle running expenses. Keep the supporting documents for five years. If you are new to trading under an ABN, our ABN tax calculator can help you estimate what you will owe on that net profit.
The general test for a deduction is that the expense must be directly connected to earning your business income, it must not be private or domestic in nature, and you must have a record to prove it. Where a cost is partly business and partly private, such as a phone plan or a car used for both work and personal trips, you claim only the business-use proportion. Getting this split right, and documenting how you worked it out, is one of the most common areas the ATO reviews for sole traders.
How sole trader profit is taxed
Sole traders do not pay a flat business tax rate. Your business profit is taxed at the ordinary resident individual rates, the same scale that applies to a salaried worker. The first $18,200 of your total taxable income is tax free, then the marginal rates step up through the brackets shown in the table.
Because the tax-free threshold applies to your total income, not to your business separately, a side hustle stacked on top of a salaried job is taxed at your marginal rate from the first dollar of profit, not tax free again. The current resident rates and thresholds are published on the ATO website at ato.gov.au. These 2025-26 rates match 2024-25. Note that a further tax cut is legislated to begin on 1 July 2026, when the 16 per cent bracket drops to 15 per cent, but that change belongs to the 2026-27 year and does not affect the return you lodge by 31 October 2026.
PAYG instalments: paying tax as you earn
Unlike an employee who has tax withheld from each pay, a sole trader receives income in full and settles the tax bill later. To smooth this, the ATO uses Pay As You Go (PAYG) instalments. You are generally brought into the system automatically once your latest return shows instalment income of $4,000 or more and tax payable of $1,000 or more, along with meeting the other criteria the ATO applies.
Once you are in, you pay quarterly amounts towards your expected tax, and those instalments are credited against your final bill when you lodge. It is not an extra tax, just an earlier one. You can read how entry works on the ATO page for starting PAYG instalments. Setting money aside each quarter, even before you formally enter the system, is one of the simplest ways to avoid a nasty surprise at lodgment time.
GST registration: the $75,000 line
Goods and services tax is separate from income tax, but it shares the same paperwork mindset. You must register for GST once your business turnover reaches $75,000 in a 12 month period, or if you expect to cross that line. Below the threshold, registration is optional. Once registered, you charge 10 per cent GST on most sales, claim GST credits on business purchases, and report through a business activity statement (BAS), usually quarterly. Missing the registration point can leave you owing GST you never collected, so keep an eye on your rolling turnover as you grow.
What late lodgment costs: the Failure To Lodge penalty
Miss the deadline and the ATO can apply a Failure To Lodge (FTL) on time penalty. It is charged at one penalty unit for each period of 28 days (or part of a period) that your return is overdue, capped at five penalty units. For a small entity such as an individual sole trader, that base rate applies without a multiplier.
The dollar value comes from the Commonwealth penalty unit. It rose from $330 to $364 for matters arising on or after 1 July 2026, under the Crimes (Amount of a Penalty Unit) Instrument 2026. Because a 2025-26 return is not due until 31 October 2026, a late-lodgment penalty on it is worked out using the $364 unit. In the worst case, five units at $364 is $1,820, and interest can accrue on any unpaid tax on top of that. The ATO can also remit the penalty where you have a good reason, but that is at its discretion, not a right. The full rules sit on the ATO page for the failure to lodge on time penalty.
One point that catches people out: if you are due a refund rather than a bill, the ATO often does not apply an FTL penalty. That is not a reason to be late, though, because you are simply leaving your own money with the government for longer, and a change in your circumstances could turn an expected refund into a debt.
How to lodge on time and stay calm
The stress of the deadline usually comes from disorganised records, not from the lodgment itself. Reconcile your income and expenses through the year rather than in one October panic. Wait for the myTax pre-fill to settle in late July, check the business schedule carefully, and if your affairs are genuinely complex, appoint a registered agent well before 31 October so you keep the extended-deadline option open. Do the arithmetic early so you know whether you owe or are owed. If you are unsure of the number, run your figures through one of the Australian calculators on this site first, then lodge with confidence.