Register as a sole trader in Australia: steps, costs

Published Monday 20 April 2026

Table of contents

• What is a sole trader?
• Which business structure is best for you?
• Pros and cons of being a sole trader
• Sole trader registration costs
• How to register as a sole trader
• FAQs on registering as a sole trader

Key takeaways

• Register as a sole trader in as little as 1–2 hours by completing your ABN, business name, and GST registration in one session through the Australian Government's Business Registration Service.
• Apply for a business name with ASIC only if you plan to trade under a name other than your own legal name, as using your legal name requires no registration and costs nothing.
• Register for GST once your annual turnover reaches $75,000 or more, as this is a legal requirement that also lets you claim back the GST you pay on business purchases.
• Recognize that as a sole trader you are personally liable for all business debts, so consider switching to a company structure if your business grows, takes on higher risk, or needs outside investment.

What is a sole trader?

A sole trader is the simplest business structure in Australia, where one person owns and operates the entire business. You have complete control over all decisions and keep all the profits, but you're also personally responsible for any debts.

Key characteristics of a sole trader structure:

• Single ownership: one person owns the business with no partners or directors
• Full control: complete authority over all business decisions and operations
• Hiring flexibility: ability to employ staff despite "sole" referring only to ownership
• Personal liability: responsibility for all business debts using personal assets

Who should register as a sole trader?

• New entrepreneurs: starting a first business with minimal setup requirements
• Freelancers and contractors: formalising existing self-employment arrangements
• Service providers: operating as consultants, tradespeople, or professionals
• Small retailers: testing business concepts before committing to larger structures

Which business structure is best for you?

A sole trader structure suits most people starting a small business or working for themselves. It's the simplest and cheapest way to get started, with minimal paperwork and reporting requirements.

Choose a sole trader structure if you:

• want the simplest setup with lowest costs
• plan to run the business yourself
• have low risk of business debts
• want to test a business idea before committing to a more complex structure

Consider a company structure if you:

• want to limit personal liability for business debts
• plan to bring on investors or business partners
• expect high turnover where company tax rates may be advantageous

You can always start as a sole trader and change to a company later as your business grows.

Pros and cons of being a sole trader

The main benefit of being a sole trader is simplicity and low cost, while the main drawback is personal liability for business debts.

Benefits:

• Low startup costs: minimal registration fees with no ongoing compliance costs
• Simple reporting: business income reported directly on your personal tax return
• Complete profit control: all profits belong to you without sharing with partners
• Quick setup: registration completed in hours rather than weeks

Drawbacks:

• Personal liability: your personal assets are at risk if the business has debts
• Limited growth options: difficulty raising investment capital or bringing in partners
• Self-managed obligations: responsibility for your own superannuation and tax payments
• Harder to sell: business value tied closely to your personal involvement

Sole trader registration costs

Registering as a sole trader can be free if you use your own legal name and don't need industry licences. The ABN application costs nothing.

Potential registration costs:

• ABN registration: free
• Business name (one year): $45 for a new application for registration
• Business name (three years): $104 for the registration of a business
• Industry licences and permits: varies by industry
• Professional advice: optional but recommended

Budget for these potential expenses from the start, especially if your industry requires specific licences or permits.

How to register as a sole trader

Registering as a sole trader takes 1–2 hours online and involves four steps. Most people can complete the process in a single session through the Australian Government's Business Registration Service.

The four registration steps are:

1. Get an individual tax file number (TFN) for paying income tax
2. Apply for an Australian Business Number (ABN)
3. Register a business name with ASIC, if you're not using your legal name
4. Register for GST, if your projected annual turnover is $75,000 or more

Time-saving tip: The Business Registration Service lets you complete steps 2, 3, and 4 simultaneously using one online form.

1. Get an individual tax file number (TFN)

A tax file number (TFN) is your unique identifier for tax purposes, and you need one before registering as a sole trader. Most Australian residents already have a TFN from previous tax returns.

If you don't have one, apply through the Australian Taxation Office (ATO) before starting your business registration.

2. Apply for an Australian Business Number (ABN)

An Australian Business Number (ABN) is a unique 11-digit number that's mandatory for most business activities in Australia. You need an ABN to operate legally as a sole trader.

Your ABN enables you to:

• register for GST when required
• claim business tax deductions
• invoice other businesses without having tax withheld
• interact with government agencies

Apply for an ABN through the Business Registration Service. Find out more about what an ABN is and how to get one.

3. Register a business name

You only need to register a business name if you're trading under a name other than your own legal name. If you operate as "John Smith," no registration is required. If you trade as "John Smith Consulting" or "ABC Services," you must register with ASIC.

Business name registration:

• Using your legal name: no registration required
• Using any other name: registration with ASIC required

Registration fees:

• One year: $45
• Three years: $104

Register your business name through the Business Registration Service. A registered business name lets you operate in any state or territory in Australia. See the business name fees on the ASIC website for the latest pricing.

Difference between a business name and a trade mark

A registered business name doesn't mean you have exclusive ownership of it. Other people can register and use similar names. To gain exclusivity over your business name, you need to register it as a trade mark with IP Australia.

Learn more about registering a business name and trade mark.

4. Register for GST

You must register for Goods and Services Tax (GST) if your annual turnover is $75,000 or more. You can also choose to register voluntarily if your turnover is below this threshold.

Benefits of GST registration:

• Claim GST credits: get back the GST you pay on business purchases
• Business credibility: show you're running a legitimate business
• B2B invoicing: issue tax invoices to other businesses

Register for GST through the Business Registration Service when you register your ABN, or add it later through the ATO. Once registered, you'll need to lodge Business Activity Statements (BAS) regularly to report and pay your GST obligations.

Learn more about registering for GST and understanding your GST obligations.

FAQs on registering as a sole trader

Here are answers to common questions about sole trader registration in Australia.

Can I register as a sole trader if I have a full-time job?

Yes, you can register as a sole trader while employed full-time. Many people start their business as a side venture before transitioning to full-time self-employment. You'll need to declare all income on your tax return, including both your employment income and sole trader income.

How long does it take to register as a sole trader?

Registration typically takes 1–2 hours to complete online. Your ABN is usually issued immediately, while business name registration may take a few hours to process. Once approved, you can start trading straight away.

Do I need an accountant to register as a sole trader?

No, you don't need an accountant to register as a sole trader. The process is straightforward and can be completed online through the Business Registration Service. However, many sole traders benefit from professional advice on tax planning, record keeping, and business structure decisions.

What's the difference between a sole trader and a company?

A sole trader is a simple structure where you and the business are legally the same entity. You're personally liable for all business debts. A company is a separate legal entity that limits your personal liability, but requires more complex setup and ongoing compliance. Companies also have different tax rates and reporting requirements.

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

Yes, you can change your business structure from a sole trader to a company as your business grows. This involves setting up a new company structure and transferring your business assets and operations. Many businesses start as sole traders to test their concept before incorporating.