How to register as a sole trader in Australia (2026)

Becoming a sole trader in Australia is one of the quickest ways to start a business — no ASIC company registration required. Here's exactly what you need to do, what it costs, and when you should consider graduating to a Pty Ltd company instead.

What is a sole trader?

A sole trader is the simplest business structure in Australia. You operate as an individual — there is no separate legal entity, no ASIC registration required, and no company annual review to file.

The trade-off is unlimited personal liability: if your business incurs debts or is sued, your personal assets (home, car, savings) are at risk. Compare this with a Pty Ltd company, which limits liability to the company itself.

Step 1 — Apply for an ABN

Every sole trader needs an Australian Business Number (ABN). Your ABN is your business tax identity — you'll use it to:

• Issue invoices and get paid legally
• Register for GST (if required)
• Deal with the ATO and government agencies
• Apply for grants and government contracts

Apply for an ABN for free at abr.business.gov.au. Most applications are processed instantly if you have all your details ready.

Step 2 — Register a business name (optional)

If you want to trade under a name other than your legal name, you must register a business name with ASIC. For example, if your name is Jane Smith but you want to trade as “Smith Consulting”, you need to register that business name.

ASIC charges:

• $44 for a 1-year registration
• $102 for a 3-year registration

A business name registration does not protect your name from being used by others (only a trademark does that), and it does not create a separate legal entity — you are still personally liable.

Step 3 — Register for tax

As a sole trader you will:

• Lodge personal tax returns — your business profit is included in your individual income tax return and taxed at personal income tax rates
• Pay quarterly PAYG instalments once your income reaches a certain threshold (the ATO will notify you)
• Register for GST if your annual turnover exceeds $75,000

Step 4 — Set up your banking and records

While not legally required, it is strongly recommended to open a separate bank account for your business. This makes bookkeeping and tax time much simpler. You will also need to keep records of income and expenses for at least 5 years (ATO requirement).

When to upgrade from sole trader to Pty Ltd

A sole trader structure works well when you're starting out. Consider upgrading to a Pty Ltd company when:

• Your annual net profit consistently exceeds ~$80,000 (company tax rate of 25% becomes more favourable than personal rates)
• You want to limit personal liability
• You want to take on business partners or investors
• You are tendering for larger contracts that require a company structure
• You want to hire employees under a formal entity

Summary