So, you’re making bank (or plan to) on OnlyFans, are a full service sex worker, or managing a growing adult content brand, amazing! But when it comes to taxes, legal protection, and business growth, should you be a sole trader or upgrade to a company?
Let’s break it down!
What is a Sole Trader?
If you’re just starting out or keeping things streamlined, a sole trader structure could be your best bet. Here’s why:
- Easy to set up and low cost – No complex paperwork, just register an ABN, and you’re good to go.
- Full control – You run the show, keep all your profits, and make all the decisions.
- Fewer tax and compliance headaches – Less reporting, no company tax rates, and simpler bookkeeping (which Empire can assist with).
Things to Consider as a sole trader
- You’re personally liable for any debts or legal issues, which means there is no separation between you and your business.
- As you earn more, tax rates can climb fast. Once you hit around $45K+ in taxable income, your tax obligations increase, naturally.
- If you want to hire employees or scale your business, this setup may hold you back. That is when we would suggest you switch to a company structure. Don’t be afraid of committing to this growth, it is an exciting time for your business!
Do I need an ABN as a sole trader?
If you’re running your adult industry business as a sole trader, you’ll need an Australian Business Number (ABN) for invoicing, tax purposes, and GST registration if you earn over $75K annually. Without an ABN, businesses may withhold tax at the highest rate, and you can’t claim business expenses properly. Registering for an ABN is free and easy, ensuring your business runs smoothly! Empire can support you through this process.
Keep in mind, you still will need an ABN as a company structure.
What is a company structure?
If you’re making consistent income or expanding your adult industry business, setting up a company could be a smart move. Here’s why:
- Tax Benefits – Companies pay a flat tax rate (currently around 30%), which could be lower than your personal tax rate.
- Limited Liability – Unlike sole traders, your personal assets (house, car) are protected if something goes wrong.
- More Credibility and Growth Potential – Want to work with brands, hire staff, or expand into new ventures? A company structure makes you look more professional.
- Long-Term Planning – Companies can retain profits, reinvest in the business, and make scaling up a lot easier.
Things to consider as a company
- More paperwork and costs – Company registration, compliance, and reporting require more effort (that’s where Empire comes in!).
- Less flexibility – You have to follow company laws, keep proper records, and separate business funds from personal cash.
- Public visibility – Your company details (including directors’ names) are searchable, which might not be ideal for privacy which is a consideration if you would like to remain anonymous – if you are looking for real privacy, a Trust structure might be more the goal for you, but after a short chat to us, we could help you assess what might the best structure for you.
So, which one is right for you?
- Stay a sole trader if you’re just starting out, keeping things simple, and don’t need the extra legal protection. If you’re making under $150K per year and don’t have employees, this structure usually makes the most sense.
- Become a company if you’re making significant income, want to protect your personal assets, or plan to grow your adult industry brand. If you’re earning over $150K+ per year, a company structure might save you a lot in taxes.
Not sure which way to go? That’s what Empire are here for! As sex worker accountants, we help anyone working in the industry make the best decision for them and their business.
Book a discovery call with one of our accountants so we can help you build your Empire.
