Tax & BAS
How to Lodge Your Freelance Tax Return in Australia
A step-by-step guide to lodging your tax return as a freelancer in Australia. What to gather, where everything goes in myTax, and the mistakes that cost people money.
Your first freelance tax return feels different because it is different. When you were employed, your employer reported your income, withheld your tax, and gave you a payment summary. You plugged the numbers into myTax and the ATO handled the rest.
As a freelancer, there's no payment summary. No tax withheld at source. You're reporting business income, claiming business expenses, and working out how much you owe. It's more involved than a PAYG return, but once you know where everything goes, the process is straightforward.
Before you start: what to gather
Get everything in one place before you open myTax. Hunting for documents mid-return is how things get missed.
If you use accounting software (Xero, MYOB, QuickBooks), run a profit and loss report for the financial year. It gives you total income and categorised expenses in one document.
Where freelance income goes
This is the part that trips people up the first time. Freelance income doesn't go in the "salary and wages" section of your return. It goes in the Business and Professional Items schedule.
In myTax, you add this schedule by selecting "Business/sole trader income and expenses" under "Personalise return." This opens a separate section where you report:
- Business income. Total revenue from freelancing. All payments received from clients during the financial year.
- Business expenses. All deductible business costs. Equipment, software, insurance, home office, phone, internet, professional development, marketing.
- Net business income. Income minus expenses. This is what gets added to your taxable income alongside any other income sources.
If you also had employment income, that appears separately in the pre-filled income section. Your total taxable income is your net business income plus your employment income plus any other income (interest, dividends, rental).
Walking through myTax
Step 1: Check pre-filled information
myTax pulls data from employers, banks, health funds, and government agencies. Review everything that's been pre-filled, especially employment income, bank interest, and private health insurance details. Don't assume pre-filled means accurate. Errors happen, particularly with multiple income sources or mid-year employer changes.
Step 2: Add the business schedule
Under "Personalise return," tick "Business/sole trader, partnerships and trusts." This unlocks the Business and Professional Items schedule where your freelance income and expenses go.
You'll need your ABN and a description of your business activity. If you have multiple types of freelance work, you can report them under one business entry unless they're genuinely separate businesses.
Step 3: Report business income
Enter your total business income for the financial year. This is the total amount clients paid you, not what you invoiced. Money invoiced in June but received in July counts in the following year's return.
If you're GST registered, report the GST-exclusive amount (the total before GST). Your quarterly BAS already handled the GST side.
Step 4: Claim business deductions
Enter your deductions by category. The common ones for freelancers:
- Home office. Fixed rate method (67c/hour) or actual costs. See our home office guide for which method works better for your setup
- Equipment. Laptops, monitors, cameras, phones. Items under $20,000 get the instant asset write-off. Over $20,000, you depreciate over the asset's effective life
- Software and subscriptions. Design tools, accounting software, project management, cloud storage
- Insurance. Professional indemnity, public liability, income protection
- Phone and internet. The business-use percentage. If you use your phone 60% for business, you claim 60% of the bill
- Professional development. Courses, conferences, books directly related to your work
- Travel. Client site visits, conferences, co-working spaces
- Marketing. Website hosting, domain names, advertising, business cards
Our complete deductions list covers every category with examples and what the ATO looks for.
Step 5: Super deduction
If you made voluntary super contributions during the year, you claim the deduction in the supplementary section of your return. This is separate from your business deductions.
You need to have lodged a Notice of Intent to claim with your super fund first, and received acknowledgement, before you can claim the deduction on your return. Without the notice, you lose the deduction entirely.
Enter the amount you contributed and claimed via the Notice of Intent. This reduces your taxable income directly. At a 30% marginal rate, a $10,000 super contribution saves you about $1,500 in tax (the difference between your rate and the 15% contributions tax).
Step 6: Medicare Levy
The Medicare Levy (2% of taxable income) is calculated automatically. If you had private health insurance, enter the details from your health fund's annual statement. This affects the Medicare Levy Surcharge calculation if your income is above the threshold.
Step 7: Review and lodge
myTax shows your estimated tax position before you submit. If the number is very different from what you expected, go back and check your entries before lodging. Our tax estimation guide covers how to calculate your expected bill beforehand so there are no surprises at this step.
Common mistakes
Business income goes in the Business and Professional Items schedule, not under salary and wages. Reporting it in the wrong place means your deductions won't line up and the ATO's automated checks will flag your return.
If a client paid you $500 for a quick project in November, it still counts. All business income goes on the return, including amounts the ATO might not have pre-filled. The ATO cross-checks data from multiple sources, and unexplained gaps get noticed.
Business deductions go in the business schedule. Work-related expenses from employment (if you also have a job) go in the individual section. Mixing them up creates inconsistencies that can trigger an ATO review. Our standard deduction guide explains the distinction.
If you made voluntary super contributions, you need to lodge a Notice of Intent with your fund and get acknowledgement before lodging your tax return. No notice means no deduction. This catches people every year.
The self-lodgement deadline is 31 October. Miss it and you risk a failure-to-lodge penalty ($313 per 28-day period, up to five periods). Using a registered tax agent extends your deadline to around May the following year. If you know you'll be late, engaging a tax agent before 31 October buys you time.
Key deadlines
| Deadline | What |
|---|---|
| 30 June | Financial year ends. All income received and expenses paid before this date count for this year's return. |
| Mid July | myTax typically opens for the new financial year. The ATO confirms the exact date each year. |
| 31 October | Self-lodgement deadline. Lodge by this date or engage a registered tax agent before this date for an extended deadline. |
| ~15 May | Tax agent lodgement deadline for most clients (exact date varies by year and client category). |
If you owe money and lodge on time, the payment due date is on your Notice of Assessment. If you expect a large bill, the ATO offers payment plans that stop additional penalties as long as you set one up promptly.
What happens after you lodge
The ATO processes your return and issues a Notice of Assessment (NOA). It arrives in your myGov inbox, usually within two weeks for electronic returns. Sometimes faster during quiet periods, sometimes slower during peak tax season (August-October).
The NOA shows your taxable income, tax assessed, Medicare Levy, any offsets applied, and your final position: refund or amount owing.
If you're getting a refund: It's deposited into the bank account you nominated, usually within 10-14 days of the NOA.
If you owe money: The payment due date is on the NOA. Pay by that date to avoid interest charges. If you can't pay the full amount, set up a payment plan through myGov before the due date. The ATO is generally reasonable about payment plans if you're proactive.
PAYG instalments: why the ATO might put you on a quarterly schedule
If your tax bill on freelance income is above a certain threshold (typically around $1,000), the ATO will put you on PAYG instalments for the following year. This means you'll pay tax in quarterly instalments going forward, rather than one lump sum at the end of the year.
This isn't extra tax. It's prepaying next year's tax so you don't get hit with another large bill in twelve months. The instalment amount is based on your most recent return. If your income drops, you can vary the amount.
It takes some getting used to, but most freelancers find it easier to manage than saving up for a single annual bill. The quarterly rhythm aligns with BAS for those who are GST registered.
Key takeaway
A freelance tax return has more parts than a PAYG return, but the structure is logical. Gather your documents first. Report business income in the Business and Professional Items schedule (not under salary). Claim your business deductions with receipts. Lodge your Notice of Intent for super before you lodge the return. Submit by 31 October or engage a tax agent for an extended deadline. If you're uncertain about any of it, an accountant is worth the cost for year one.
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Frequently asked questions
What if I have both employment and freelance income?
You report both on the same return. Employment income appears pre-filled in the salary section. Freelance income goes in the Business and Professional Items schedule. Your total taxable income is both combined, minus deductions from each. Make sure employment-related deductions (uniforms, travel to your workplace) go in the individual section, and business deductions go in the business schedule.
Do I need to lodge a BAS and a tax return?
If you're GST registered, yes, both. BAS is quarterly and covers GST reporting and PAYG instalments. Your annual tax return covers income tax. They're separate obligations. You don't report GST on your tax return; that's handled through BAS.
What if I started freelancing partway through the year?
You still lodge a return for the full financial year. Report freelance income from the date you started. If you were employed earlier in the year, that income appears in the salary section (usually pre-filled). Your deductions are split: employment-related deductions in the individual section for the employment period, business deductions in the business schedule for the freelance period.
What if I earned very little this year?
If your total income (all sources) is below the tax-free threshold ($18,200), you may not need to lodge. But if the ATO has sent you a notice to lodge, you must respond regardless of income. And if you had tax withheld from employment during part of the year, lodging is how you get that money back as a refund.
Can I do my own return and switch to an accountant later?
Yes. There's no commitment either way. Many freelancers do their own return in year one, then bring in an accountant as things get more complex. Others start with an accountant to get the setup right, then handle it themselves once they understand the process. Our guide to deciding on an accountant covers when it's worth the cost.
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Want the complete picture?
The complete guide to freelancing in Australia. Tax, super, BAS, contracts, and pricing, explained step by step.