Your tax obligations as a sales agent
As an independent sales agent in Australia, you pay tax as a sole trader. Your commission income is added to any other income you earn, and you are taxed at the individual marginal tax rates.
There is no special tax rate for commission income. It is treated the same as salary, wages, or any other personal income.
Current tax rates (2025/26)
The Australian individual tax rates are:
- $0 to $18,200: Nil
- $18,201 to $45,000: 16 cents per dollar over $18,200
- $45,001 to $135,000: $4,288 plus 30 cents per dollar over $45,000
- $135,001 to $190,000: $31,288 plus 37 cents per dollar over $135,000
- $190,001 and above: $51,638 plus 45 cents per dollar over $190,000
Plus the 2% Medicare Levy on your total taxable income.
What you can claim as deductions
This is where many agents leave money on the table. Common deductions include:
- Phone and internet: The business use percentage of your phone and internet bills
- Vehicle expenses: If you drive to meet prospects, you can claim using the cents per kilometre method or the logbook method
- Home office: If you work from home, claim a portion of your rent, electricity, and internet
- Equipment: Computer, printer, headset, and other tools used for business
- Marketing: Website costs, business cards, social media advertising
- Professional development: Courses, books, and conferences related to sales
- Travel: Flights, accommodation, and meals when travelling for business
- Accounting fees: The cost of your accountant or tax agent
How to plan for tax
The biggest mistake new agents make is spending all their commission income and getting hit with a massive tax bill at the end of the financial year.
From day one, set aside a percentage of every commission payment in a separate savings account. The right percentage depends on your total income:
- Earning under $45,000 total: Set aside 20%
- Earning $45,000 to $120,000 total: Set aside 30%
- Earning over $120,000 total: Set aside 35% to 40%
PAYG instalments
After your first year, the ATO may ask you to pay quarterly PAYG instalments based on your previous year's income. This is not extra tax. It is prepaying your estimated tax liability so you do not face a large lump sum at tax time.
Get professional help
Tax rules change regularly, and your situation may have complexities that a general guide cannot cover. Invest in a good accountant who understands sole traders and commission income. The fee pays for itself in deductions you might otherwise miss.