Sole trader

Sole traders are individuals who operate their business on their own. They are the exclusive owners and are responsible for all aspects of the business. This includes managing the business's finances, decision-making and bearing all the risks and benefits of the business. Unlike companies or partnerships, there is no legal distinction between the individual and the business.

Sole traders as employers

A sole trader who employs staff has the same obligations as any other employer, including paying award wages and superannuation, withholding PAYG tax and keeping records. Outside Western Australia, sole traders are in the national Fair Work system; in Western Australia they are covered by the state system. Because there is no separate legal entity, the owner is personally liable for business debts, including unpaid employee entitlements. For example, a plumber operating as a sole trader in Adelaide who hires an apprentice must follow the Fair Work Act and the Plumbing and Fire Sprinklers Award 2020.

Read our guide to hiring your first employee.