New data from tax and accounting service Hnry has revealed that 45 per cent of self-employed Aussies have yet to file their tax return and 14 per cent have yet to begin their tax filing work at all, despite the threat of a $313 fine for failing to lodge their tax returns..
The Hnry Sole Trader Pulse noted that tradies, freelancers, consultants, and health and wellness professionals across the country tend to put off laborious financial admin work due to high cost, stress, confusion and the number of hours involved. Respondents cited concerns such as:
- Time constraints (43 per cent)
- Stress surrounding the tax return process (26 per cent)
- Belief that rebates will be minimal (17 per cent)
In particular, 33 per cent of sole traders feel stressed about their tax returns due to challenges in tracking down receipts (25 per cent), uncertainty regarding rebate amounts (21 per cent), and confusion over what can and can’t be claimed as a tax-deductible expense (15 per cent)
It has also been noted that the average self-employed Australian spends over $1,000 and 15 hours preparing their tax return, taking away about two working days from their week.
Olsen Joseph, a roofer sole trader, echoed these sentiments. saying, “After a long day on-site, the last thing you want to do is sit at a computer and deal with finances –- it’s not my expertise. But for all the advantages of being your own boss, it’s part of the deal. It’s tedious and time-consuming, so you tend to put it off, but that only makes it harder in the long run.”
Despite a tough few years and amid the burden of tax time, Australia’s self-employed have had a strong quarter, with 55 per cent report higher turnover since the previous quarter –- the highest since June 2022 –- while 54 per cent feel financially secure and 59 per cent are confident in their job security
Positive feelings around job satisfaction (63 per cent), work-life balance (64 per cent), and overall well-being (55 per cent) remain consistently high for sole traders –- reflecting a spirit of resilience in this cohort that makes up 10 per cent of Australia’s workforce
Karan Anand, Managing Director of Hnry Australia, offered her insights on the findings, saying, “The 1.5 million self-employed sector, growing by 50,000 annually, is the engine room of our economy. They’re a thriving, resilient bunch but with the average tax return submission taking 15 hours to complete, it’s no surprise so many are putting it off.
“Tax season can be a confusing, stressful time – from tracking down receipts to working out expenses to claim – but with the deadline looming it’s vital our sole traders have the tools and information they need to file. If you’re filing on your own, make sure to lodge by 31 October, and if you’re using a tax agent, you need to be on their books by this date or risk a $313 fine which no one wants to cop,” Anand added.
“We know tax and financial admin continues to be a significant drain on productivity. To ease the pressure, keep accurate records year-round, plan early so it’s not a last-minute scramble, and don’t hesitate to get a second opinion,” she concluded.
