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Remember to complete the form at the end to move on to the next stage.

 

Register as a Sole Trader

You have made the decision to register your business as a Sole Trader. Well done.

This page gives you all the steps you need to do to make it happen.

The same advice can be found in Module 2.2 Setting up your Business.

To become a sole trader you need register your business name also get an ABN.

You can do both of these at Business.gov.au official website. Click the button to go the registration page and start the process. 

Register at business.gov.au

 

When you get to the page, you should firstly select 'Australia Business Number (ABN)' and 'Business Name' as the 2 new registrations to apply for.

As you are not setting up a Company you do not select 'Australian Company and Company name'.

 

Further down on the same page there are several other registration options; GST, PAYG, Fringe Benefit Tax (FBT) etc.

In most cases, all of these are not relevant to your new side hustle business so you don't need to tick them.

The reason why is"

  • PAYG withholding and the Fringe Benefits Tax are only relevant when you employ someone. As its just you starting your side hustle, you are not an employee.
  • Luxury Car Tax and Wine Equalisation Tax are for niche services.
  • You can't register  for Fuel Tax Credits if you are not applying for GST.

You only need to register for GST if you think you will earn over $75K in a tax year (or are starting a taxi service). Your side-hustle will probably not reach $75K revenue in your first tax year so I wouldn't worry about registering. If you do have a stellar first year and are getting close to $75K then you can then register for GST nearer the time.

You can also register for GST now if you want to. But the additional administrative tax reporting probably isn't worth it as you will need to do quarterly GST Business Activity Statements (BAS). That is mandatory reporting every 3 months! Minimise reporting where possible.

The only benefit of registering now is if you are purchasing a lot of goods and services to help your business grow and want to claim back the GST you spent. But you really shouldn't be spending a lot of cash in the early days of your side hustle.

 

Once you have selected all your relevant registrations, click 'Next' to start the process. You will need the following information to complete the process

  • your name and contact details.
  • address and contact details for your new business.
  • details of each person or organisation associated with the business (e.g. partner, director, secretary or shareholder). As you are a Sole Trader, it will be just you.
  • details of business activities.
  • Your tax file number.
  • proof of identity information such as name, address and birth details.
  • business activity details.
  • proposed business name, which you have jsut worked out.

The process should now more than 15 minutes and the cost for setting up a sole trader is $42 for 1 year and $98 for 3 years. I would go 3 years because 1 isn't enough time.

Once completed, you should get your ABN straight away. 

 

WELL DONE

You have a registered business and have an ABN!

Complete the form at the end of this page to move to the next stage around getting a business bank account.

But firstly, do you need an accountant?

 

Do I need an accountant?

As Sole Traders are easy to set-up and manage through your own personal tax return, you probably don't need an accountant initially.

The cost for an accountant would be around $2000 to $4000 per year which could drive your decision.

As your business grows in size and complexity there will come a point when you should get an accountant. I will leave this up to you to decide when the right time is for you.

If you already have an accountant you use for your personal tax, then check with them that they can also do your new business.

If you would like to get an accountant, please click this link to learn the steps in getting one that is right for you, Module 2.3 Getting an Accountant.

If you chose to "Do It Yourself" remember these 3 things:

  1. Keeping records of any business transactions. This is call book keeping.
  2. Create a monthly report to help determine if you making money or losing money.
  3. Remember you will need to pay Income tax at the end of the year if you made a profit. So have enough money to cover this. It is not automatically deducted like you are used to.

COMPLETE THE FORM

Once you have registered your business as a Sole Trader, the next step is to set-up your business bank account. 

Please add your email below and click the button to move to the next step.