If you’re earning through an ABN, ABN tax calculation can feel overwhelming — especially if you’re new to freelancing, gig work, or sole trading.
However, with the right guidance and tools, managing your tax becomes much easier. Below, we’ll walk you through each step so you can confidently set aside the correct amount for tax.
🧮 Step 1: Know Your Gross ABN Income
First, calculate your total income before deducting any business expenses or GST.
Example:
You earned $60,000 in 2025 from freelancing.
Gross Income = $60,000
💸 Step 2: Subtract Business Expenses
Next, determine your net income by subtracting deductible business expenses. This is the amount you’ll actually be taxed on.
Common deductible expenses include:
- Phone and internet bills
- Laptop, tools, or software
- Travel or vehicle use (for business)
- Marketing or website costs
- Home office expenses
Example:
$60,000 gross income – $10,000 expenses = Taxable Income: $50,000
🧾 Step 3: Choose a Tax Calculation Method
At this point, you can calculate tax using two different methods depending on your income level and preferences.
✅ Option A: Flat 19% Rate (For income under $60,000)
This method is simple and ideal for those earning below the $60k threshold.
Calculation:
$50,000 × 19% = $9,500 tax
✅ Option B: ATO Tax Brackets (2025)
If you want more accuracy — especially for higher incomes or detailed deductions — use the official ATO method. You can view the official ATO tax rates for 2025.
| Income Range | Tax Rate |
|---|---|
| $0 – $18,200 | Tax-free |
| $18,201 – $45,000 | 19% of income over $18,200 |
| $45,001 – $120,000 | $5,092 + 32.5% of income over $45,000 |
Example Calculation:
- $50,000 – $45,000 = $5,000 over
- 32.5% of $5,000 = $1,625
- Total Tax = $5,092 + $1,625 = $6,717
➕ Step 4: Add the Medicare Levy
In addition, most ABN earners must pay the 2% Medicare Levy on their taxable income. For full details, visit the Medicare Levy overview by ATO.
Calculation:
$50,000 × 2% = $1,000
Final Tax (ATO method) = $6,717 + $1,000 = $7,717
🧠 Which Tax Method Should You Use?
Choosing the right method depends on your income and deductions. Here’s a quick breakdown:
| Income Level | Recommended Method |
|---|---|
| Below $60,000 | Flat 19% Rate (Simpler) |
| Above $60,000 | ATO Brackets (More Accurate) |
| Claiming Expenses | ATO Brackets |
📲 Use ABN TaxMate to Automate Your ABN Tax Calculation
Let’s be honest — calculating all this manually is time-consuming. That’s why we built ABN TaxMate, a free tool that:
✅ Calculate tax using both methods
✅ Add the Medicare Levy
✅ Enter weekly income and expenses
✅ Download a clean PDF summary for tax time
🎯 Try the ABN Tax Calculator Now
Therefore, instead of stressing about numbers and rules, use ABN TaxMate to save time, avoid ATO penalties, and stay in control of your finances.
📌 Quick Summary
| Step | What to Do |
|---|---|
| 1. | Income: Enter total amount earned |
| 2. | Expenses: Subtract allowable business costs |
| 3. | Tax: Choose flat 19% or ATO tax brackets |
| 4. | Levy: Add 2% Medicare Levy |
✅ Final Thoughts
Finally, remember that tax doesn’t have to be complicated. With the right knowledge — and the right tools — you can manage your ABN tax responsibilities without stress.
Let ABN TaxMate handle the calculations, so you can focus on what matters most: growing your business.
