Quotes, progress claims, subbies, apprentices, a ute full of gear and a BAS every quarter: that is the rhythm of a trade business. SMT Accounting looks after the whole picture on a fixed fee.
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Sole trader or company for a trade business?
Most tradies start as a sole trader because it is quick and cheap. The conversation changes once you employ people, sign bigger contracts or earn more than you spend. A company separates the business from you personally and taxes profit at the company rate, but adds directors' duties, ASIC fees, Division 7A rules on money you draw out and a second tax return. See our guide to business structures in Australia and our company and business registration service.
Subbies working mostly for one builder: the personal services income (PSI) rules can attribute income to you personally even through a company. The ATO's results test asks whether, for at least 75% of your PSI, you are paid for a result rather than by the hour, supply your own tools and must fix defects at your own cost. Hourly-rate arrangements usually fail it, so we check before a company is formed.
GST and BAS
You must register for GST once GST turnover reaches $75,000. The BAS is usually quarterly: GST on sales and purchases, PAYG withholding for staff and PAYG instalments on your own income. The errors we fix most often: GST claimed on private ute use, on stamp duty inside insurance, and on invoices that were never valid tax invoices.
TPAR: the building and construction report due 28 August
If your business provides building and construction services and pays contractors for those services, you must lodge a Taxable payments annual report (TPAR) by 28 August each year, listing the total paid to each contractor. The 10%-of-income test used for cleaning, courier and other TPAR industries does not apply to building and construction: if you are in the industry and paid subbies, you report. Keep ABN, name and amounts tidy in your bookkeeping all year so the report takes minutes, not days.
Subcontractor or employee? The ATO's test
The question turns on the legal rights and obligations in the contract, not on what the parties call it. The ATO weighs control over how, where and when the work is done; whether the worker serves in your business or runs their own; payment for time versus a fixed price for a result; a genuine right to delegate; who supplies the tools; who bears the risk of defects; and who gets the goodwill. Apprentices, trainees, labourers and trades assistants are always employees.
Apprentices, wages and Payday Super
Apprentices are employees in every sense: award wages, PAYG withholding, Single Touch Payroll each pay run and super. From 1 July 2026, Payday Super replaces the quarterly deadline: super guarantee at 12% of qualifying earnings must be received by the fund within 7 business days of each payday, reported through STP. Our payroll and STP service sets that up and runs it.
Utes, tools and the instant asset write-off
Tools
The business share of each tool is deductible. Small businesses with aggregated turnover under $10 million can write off an asset costing less than $20,000 in the year it is first used, per asset, new or second-hand.
The ute
The $20,000 limit tests the vehicle's total cost, not your business share: a $40,000 ute used 40% for work fails it and goes into the small business pool instead.
Records
A logbook-style record of work use, receipts rather than bank statements.
Utes versus cars, protective gear and the $1,000 standard deduction for employee tradies are covered in our tradie tax deductions guide.
Progress claims, retentions and cash flow
Building work is paid in stages, and the tax follows the invoices: GST is reported when you issue a progress claim or when you are paid, depending on whether you account on an accruals or cash basis, while retentions held by a head contractor are income you may not see for months. We set up your software so claims, variations and retentions are tracked separately, so the BAS matches reality.
Licensing and registration
In Victoria, domestic building work above the regulated thresholds needs a builder registered with the Victorian Building Authority; plumbing and electrical carry their own registrations. We do not advise on licensing, but renewing a licence you need for your current work is deductible, while obtaining your first licence is not. Queensland's QBCC regime is a separate system we coordinate with if you work across the border.
What SMT does for tradies and builders
- Structure advice and set-up: ABN, GST, company or trust, PAYG withholding registration.
- Bookkeeping with job and progress-claim tracking, and subbie records that produce the TPAR in minutes.
- Quarterly BAS with a cash-flow check and PAYG instalment review.
- Payroll and STP for apprentices and staff, with Payday Super built in from 1 July 2026.
- Year-end returns, depreciation schedules and a written worker-classification check for each subbie.
Fixed fees, a registered tax agent on every lodgement, and a free first call.
Frequently asked
My subbie has an ABN, so I don't need to pay him super, right?
Not necessarily. The ATO says an ABN makes no difference. If you pay an individual under a contract that is mainly for their labour, they are paid for their personal skills rather than a result, and they cannot send someone else to do the job, they are an employee for super guarantee purposes and you must pay super on the labour part of their invoice. Contracting a company, trust or partnership is different: no super is owed for the people they send.
When is the TPAR due and who has to lodge it?
A Taxable payments annual report is due by 28 August each year. If your business provides building and construction services and paid contractors for those services during the financial year, you must lodge one. For building and construction there is no 10% turnover test; that test only applies to the other TPAR industries such as cleaning and courier services.
Should I run my trade business as a sole trader or a company?
It depends on your income, your risk, whether you employ people and where the business is heading. A sole trader is simplest and cheapest; a company separates the business from you personally and taxes profits at the company rate, but brings directors' duties, ASIC fees, Division 7A rules on money you draw and more paperwork. We model both using your actual numbers before you decide.
What changes for my apprentice from 1 July 2026?
Payday Super. From 1 July 2026 super guarantee for every employee, including apprentices, must reach their fund within 7 business days of each payday rather than by the quarterly deadline. It is calculated at 12% of qualifying earnings and reported through Single Touch Payroll each pay run. Your payroll software needs to be set up to pay super with wages.
Sources
- ATO, Work out if you need to lodge a TPAR: https://www.ato.gov.au/businesses-and-organisations/preparing-lodging-and-paying/reports-and-returns/taxable-payments-annual-report/work-out-if-you-need-to-lodge-a-tpar
- ATO, Difference between employees and independent contractors: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-independent-contractor/difference-between-employees-and-independent-contractors
- ATO, Super for independent contractors: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/work-out-if-you-have-to-pay-super/super-for-contractors
- ATO, About Payday Super: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/about-payday-super
- ATO, Registering for GST: https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst
- ATO, Instant asset write-off for eligible businesses: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off
- ATO, PSI results test: https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/personal-services-income/working-out-if-the-psi-rules-apply/results-test
- ATO, Professional memberships and accreditations: https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/memberships-accreditations-fees-and-commissions/professional-memberships-and-accreditations
- ATO, Single Touch Payroll: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/single-touch-payroll