Sole trader or partnership income

What goes into the income test

Your assessable income as a sole trader or business partner is the gross income minus the deductions we allow.

If you’re a sole trader

All the income counts in your test. You can deduct some expenses.

If you’re in a partnership

The income that counts in your test depends on how big your share of the business is. The partnership agreement says what this is.

You can deduct some expenses.

What deductions we allow

You can’t claim as many deductions in the income test as you can in your tax return.

What you can claim

You can claim:

• costs needed to earn business income
• depreciation of business assets
• employee superannuation.

What you can’t claim

You can’t claim:

• past year losses
• losses from another business
• superannuation for sole traders or business partners
• some capital costs.

What details we need

You’ll need to give us:

• your most recent annual financial statements, or
• a profit and loss statement for a recent period, usually 13 weeks.

A profit and loss statement for a recent period is only needed if:

• you don’t have an annual statement yet
• the income has changed since the last statement.