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Tax, super and registration essentials for tradie businesses and independent contractors in building and construction.
Published 27 May 2026
Use the following information to get your tax, super and registration essentials right if you're a business or independent contractor tradie. If you're not sure if you're a business or employee tradie, check whether you're an employee, business or both.
Whether you're setting up a small business or registering for an Australian business number (ABN) to operate as an independent contractor, you'll be 'running a business' for tax purposes.
Our starting your own business information helps understand what you need to know and do when starting your own business.
Training – complete our free short courses:
Not every business needs to be registered for GST. In general, a business will need to register for GST when it has a GST turnover of $75,000 or more.
Work out if, when and how you need to register for goods and services tax (GST).
Once you're required to register for GST, you need to do so within 21 days to avoid penalties.
When you run a business, no one withholds tax from your income for you. PAYG instalments help you:
Get set up to interact with us digitally.
Use our online services to access tax and super records, plus technical support, systems advice and online security tips.
Sole traders can use ATO online services to manage their tax and super, including registering for PAYG instalments, while business can use Online services for business for reporting and transactions.
Use our ATO app to access a range of features and tools to help you keep on top of your tax and super.
When running a business, most income you receive is assessable business income for income tax purposes. This includes cash income.
Declare all assessable income in your tax return. Your accounting method may affect which amounts you include in each income year.
As a tradie business, you may also earn income as an employee of another business in the same income year. Employee tradies has more information to help you understand your tax obligations.
Personal services income (PSI) is income received by you, or an entity connected with you, that is reward for your personal effort or skill, for example:
See Personal services income for more information.
You can also complete our free, short Personal services incomeExternal Link course.
Cash flow is the amount of money going in and out of your business. Having enough cash at the right time makes it easier to pay bills, expenses and meet your tax, super and employer obligations.
You can assess your cash flow by comparing your performance against others in your industry using small business benchmarks.
Plan ahead by managing your cash flow. Knowing when you expect money to come in and go out can help you budget for income and expenses.
Complete our free, short courses:
If you're registered for GST, you:
When the GST you collect is mixed with your cash flow, it’s easy to accidentally use it on jobs, invoices or materials, leaving you short at BAS time. The right tools can help you plan and ensure you have the funds to cover your BAS, and we have more information on managing payments to meet your GST obligations.
Complete our free, short Goods and services tax (GST)External Link course.
Your company is a separate legal entity from you as an individual for tax purposes. Using company funds to cover your lifestyle purchases can lead to complications at tax time.
Avoid using company assets for private purposes or using a single bank account for personal and company expenses.
Complete our free, short Using your business money and assetsExternal Link course.
You can claim business tax deductions for most expenses you incur if they're directly related to earning your assessable income.
You may be able to claim deductions for operating expenses, buying products or services, or the cost of depreciating assets like machinery and equipment.
The 2 most common deductions tradies want to find out more about are those for depreciating assets and home-based business expenses.
When buying depreciating assets, like tools or machinery, using the simplified depreciation rules, you can immediately deduct the business portion of the cost of eligible assets under instant asset write-off.
The eligibility criteria and limit for the instant asset write-off have changed, so it's important to check you have the latest information.
If you operate as a sole trader or independent contractor, you may also be able to claim deductions for operating a home-based business (sole trader or partnership).
Use Business income, losses, deductions and concessions to find information for your situation.
Using digital tools, getting advice and keeping accurate records will help your business stay on track.
Use our good business habits information to help get the basics right.
Training – complete our free, short courses:
You'll need to lodge a tax return and, most likely, a regular business activity statement (BAS). You may need to lodge other types too – for example, if you pay independent contractors, you may need to report contractor payments and lodge a Taxable payments annual report (TPAR).
If you're finding it hard to lodge on time, you should contact us before the due date. We'll work with you on a solution. Sometimes people don't meet their lodgment obligations on time, even with the best intentions.
You may receive a failure to lodge (FTL) on time penalty if you don't lodge by a due date but we’ll always consider your circumstances when deciding what action to take.
If you're registered for GST you'll need to lodge a business activity statement (BAS) to help you report and pay your:
Even if you have nothing to report for the period, you must lodge a 'nil' BAS by the due date. You must lodge and pay your BAS in full and on time to avoid paying interest and penalties.
Bookmark or favourite due dates for lodging and paying your BAS.
If your business is not registered for GST and not required to lodge a BAS, you'll need to put money aside throughout the year to meet your tax obligations. This includes:
If you are new to business, or you think you will earn business and investment income over the threshold, it's a good idea to voluntarily register online to start paying pay as you go instalments. This helps smooth out your cash flow and avoid a large tax bill when you lodge your tax return.
Fuel tax credits are claimed on your BAS. We have guidance on how to record your fuel tax credit claim when completing your business activity statement.
Before you hire your first worker, you need:
Training: Complete our free, short Hiring workersExternal Link course.
Your employer obligations depend upon your situation and how each worker is classified.
Use our Hiring and paying your workers information to understand how engaging a worker triggers tax, super and reporting obligations.
Complete our free, short courses:
When hiring a worker, you must determine if they are an employee or independent contractor.
It's important to correctly classify workers because:
Apprentices, trainees, trades assistants and labourers are always treated as employees.
Apprentices and trainees do both work and recognised training to get a qualification, certificate or diploma. They can be full-time, part-time or school-based and usually have a formal training agreement with the business they work for. This is registered through a state or territory training authority or completed under a relevant law.
In most cases they are paid under an award and receive specific pay and conditions. You must meet the same tax and super obligations as you do for any other employees.
There are a range of financial incentives for employersExternal Link to take on apprentices.
If you hire your worker through a labour hire firm and pay that firm for the work undertaken by the worker in your business, your business has a contract with the labour hire firm and not the worker. It's the labour hire firm that's responsible for tax and super obligations for the worker.
Labour hire firms may be called different names, including:
They'll refer to your business as the 'host employer'.
Your PAYG withholding tax obligations depend on whether your worker is an employee or independent contractor. If your worker is an employee, you generally have to withhold amounts from payments you make to them. If they are an independent contractor, you generally don't withhold amounts from payments you make to them (unless they request withholding through a voluntary agreement).
STP reporting streamlines employer reporting to us and other government agencies. STP must be reported on time, accurately, every time, for every employee. This means it must be submitted on, or before, each payday.
Each year, you will need to complete an end-of-year finalisation declaration through STP by 14 July to ensure your employees can access their finalised information to complete their tax return.
If you provide your employees (or their family members or associates) with perks in addition to a wage or salary, you may be providing fringe benefits and may need to pay fringe benefits tax (FBT).
Depending on the circumstances, FBT can apply to a range of benefits, such as:
Use our FBT quick reference guide to find out what benefits attract FBT.
Dual cab utes and other light commercial vehicles are often provided to tradie employees. If these vehicles are available for personal use, FBT may apply. Dual cab utes aren't automatically exempt from FBT and business branding on the vehicle doesn't make private use exempt. An exemption only applies if the private use meets specific conditions.
Check how FBT applies to cars to help yourself get it right.
Complete our free short courses:
Make sure you:
You'll have different payment obligations depending on your situation. Our preparing, lodging and paying information helps work out your obligations.
You need to pay all your tax on time to avoid general interest charges (GIC) and firmer actions. You can bookmark or favourite due dates for lodging and paying.
If you’re experiencing financial difficulties and can't pay on time, you may be eligible to set up a payment plan. If you owe $200,000 or less, you may be able to set up a payment plan using ATO online services.
If you need support, contact us or your registered tax professional before the due date. We’ll work with you to find a solution.
Plan ahead by managing your cash flow. Knowing when you expect money to come in and go out can help you budget for income and expenses.
If you don’t pay or engage with us to pay your debt, we may take firmer action to collect it. This could include director penalty notices, garnishees and disclosure of business tax debt to credit reporting bureaus.
There are steps to changing, selling or closing your business. These include:
If you need to change your ABN, keep your suppliers and customers up to date. Complete our free short Closing your small businessExternal Link course.
You must keep accurate and complete records for all your transactions related to tax, GST and super as you start, run, sell, change or close your business. This will help manage your business and cash flow. Generally, you need to keep records for 5 years.
To meet your obligations and avoid mistakes, ensure you:
When you claim a deduction you need to keep records that show you incurred the expense or we may disallow your claim.
Use these resources to help keep accurate records:
Sometimes companies are liquidated, wound-up or abandoned to avoid paying their debts. A new company is then started to continue the same business activities without the debt. This is called illegal phoenix activity, and is particularly prevalent in industries relying on labour hire, including building and construction.
Protect your business from phoenix companies by knowing the warning signs of illegal phoenix activity.
Help and support is available for your business:
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