Starting a Tradie Business in Australia — The Complete 2026 Setup Guide

Starting your own tradie business is the best financial decision many tradespeople ever make. You control your income, your schedule and your future. But getting the setup right from day one avoids expensive mistakes later. This guide covers every step.

Step 1: Choose Your Business Structure

Most tradies start as a sole trader — it's the simplest and cheapest way to operate. You register an ABN, lodge one tax return each year, and all the income is yours (after tax). Your personal assets are legally at risk, but this is managed through good insurance.

A company (Pty Ltd) creates a separate legal entity with stronger asset protection and potentially lower tax on profits above ~$100,000. The setup and ongoing admin cost is higher. Most tradies don't need a company until they're well-established and profitable.

Talk to an accountant before you start if you're unsure — the setup cost is worth it for the right advice from day one.

Step 2: Register Your ABN

Apply free at abr.gov.au. Takes 15 minutes. You'll need your tax file number and a choice of business structure. Your ABN is typically issued within a few business days and allows you to legally invoice clients and register for GST.

Choose a business name at the same time if you want to trade under a name other than your own (e.g. "Smith Electrical" instead of "John Smith"). Register it at asic.gov.au for $42/year.

Step 3: Get Your Licences and Insurance

Check your state licensing authority for trade-specific requirements — most trades require a contractor licence separate from your trade qualification.

For insurance, get public liability cover before your first job — most clients and builders require it. Compare tradie insurance options here →. BizCover lets you get covered and download your certificate in under 10 minutes.

Step 4: Open a Business Bank Account

This is non-negotiable. Open a separate account for business income and expenses. Mixing personal and business money makes tax time painful and creates ATO audit risks. Free options include Zeller, Up Business and some big-bank basic business accounts.

Step 5: Set Up Accounting Software

You need software to invoice clients, track expenses, and prepare your BAS quarterly. Good options for tradies:

• Rounded — from $15/month, built for sole traders, includes BAS prep
• Xero — from $35/month, most popular in Australia, works with most accountants
• ServiceM8 — from $29/month, job management + invoicing, integrates with Xero

Step 6: Register for GST (If Needed)

Register for GST when your annual turnover exceeds $75,000 — or immediately if you expect to hit that within 12 months. Add 10% GST to every invoice and set it aside. Lodge your BAS quarterly and claim back GST on your business purchases.

Step 7: Set Your Rates

Don't undersell yourself. As a business owner you now pay for your own super, insurance, vehicle, tools, slow periods and sick days. Your rate needs to cover all of this.

A rough guide: take your target annual income, add 30–40% for business costs and taxes, then divide by realistic billable hours (1,000–1,200 for most sole traders). That's your minimum hourly rate. Research what other tradespeople in your area are charging and don't race to the bottom.

Step 8: Get Your First Clients

Your network is your most valuable asset when starting out:

• Tell every builder, contractor and supplier you've ever worked with that you're out on your own
• Set up a free Google Business Profile — it's the fastest way to appear in local search results
• List on Hipages, Airtasker and ServiceSeeking for residential work
• Ask your first satisfied clients for a Google review — five reviews puts you ahead of 90% of local competitors

→ Related: Best Business Bank Accounts for Australian Tradies 2026 — compare fees, features and zero-fee options.

→ Related: Best Business Bank Accounts for Australian Tradies 2026 — compare fees, features and zero-fee options.

The First 30 Days -- Your Setup Checklist

Setting Your Rates -- The Number Most New Tradies Get Wrong

Most tradies going out on their own initially charge what their old employer billed -- without accounting for the fact that the employer was covering super, insurance, vehicles, admin time, sick days and public holidays. As a self-employed tradie you need to cover all of these yourself.

Use our free hourly rate calculator to work out the minimum you need to charge based on your actual costs and target income.

## Setting Up Your ABN, Tax File Number and Business Structure Before you pick up a hammer or sign your first job, you need the paperwork sorted. Australia's taxation and business registration system isn't complicated, but getting it right from day one saves you thousands later. **Apply for your ABN first.** You can do this online through the Australian Business Register (ABR) in about 10 minutes. It's free, and you'll need it before you can legally operate. Your ABN goes on every invoice, quote and tax return. If you're a sole trader, your ABN is linked to your Tax File Number (TFN). If you're registering as a company or trust, the process is slightly different—but most tradies start as sole traders. **Register for GST when you hit $75,000 in annual turnover.** You don't have to register immediately if you're under this threshold, but many tradies do it anyway because clients—especially construction companies and developers—expect GST invoices. Once registered, you'll lodge quarterly Business Activity Statements (BAS) with the ATO. This means tracking every dollar in and out. Use accounting software like Xero to automate this—it links to your bank account and calculates GST automatically. **Choose your business structure wisely.** Sole trader is simplest and cheapest ($0 setup, minimal paperwork). You're personally liable for debts, but for most tradies starting out, this is fine. A proprietary limited company costs $300–$500 to set up through ASIC and gives you liability protection, but it's more admin and accounting fees are higher. A trust sits in between. Talk to an accountant before deciding—it costs $200–$300 for advice and could save you tens of thousands in tax over five years. ## Managing Cash Flow and Pricing Your Work This is where many new tradies stumble. You might be brilliant at your trade, but if your cash flow dies, so does your business. **Price your work to cover costs plus profit—not just your hourly rate.** New tradies often charge what they think sounds reasonable, then wonder why they're not making money after paying fuel, tools, equipment and tax. You need to know your cost per hour of work. Add up: - Vehicle running costs (fuel, maintenance, registration): Calculate your fuel costs using the ATO rate of 88c/km for 2025–26 - Tools and equipment depreciation - Insurance premiums - Wages (what you need to earn) - Superannuation: You must contribute 11.5% of your wages into super - Taxes and GST - Buffer for non-billable time (quoting, admin, travel between jobs) A plumber or electrician might charge $60–$120/hour depending on location and experience. A carpenter might charge $50–$100/hour. But these are retail rates—they cover everything. Many new tradies undercut themselves by 30–40%, which is a slow-motion business disaster. **Invoice immediately and chase payment hard.** Get paid within 7 days if possible. Net 30 is standard in construction, but negotiate Net 14 when you can. Late payments are the number one cash flow killer for tradies. Use job management software like Tradify to send invoices automatically, set payment reminders, and track which clients are slow payers. You can also offer a small discount (2–3%) for payment within 7 days—it's worth the cost to keep cash flowing. **Offer deposit payments for larger jobs.** If you're quoting a $5,000 kitchen renovation, ask for 50% upfront. This covers your materials and protects you if the client cancels. For smaller jobs under $500, payment in full is reasonable. | **Expense Category** | **Annual Budget (Example)** | **Notes** | |---|---|---| | Vehicle running costs | $8,000–$12,000 | Fuel at 88c/km, maintenance, registration, insurance | | Tools & equipment | $2,000–$5,000 | New tools, replacements, repairs | | Business insurance | $1,200–$2,500 | Public liability, tools, vehicle; use BizCover for quotes | | Superannuation (11.5%) | $4,000–$8,000 | Based on $70k–$75k annual income | | Software & subscriptions | $600–$1,200 | Accounting, invoicing, job management | | Phone & internet | $800–$1,200 | Essential for quotes and communication | | Fuel & materials (direct) | Variable | Billed to clients; you're reimbursed | ## Getting the Right Insurance and Legal Protection Cutting corners on insurance is like working without a hard hat. One accident and you're finished. **Public liability insurance is non-negotiable.** It covers you if you damage a client's property or injure someone on the job. Most clients won't hire you without it. Cover of $10 million is standard for tradies, and it typically costs $600–$1,500 per year depending on your trade. Tools insurance covers theft and damage to your equipment—another $300–$800/year. Check BizCover for competitive quotes; they specialize in tradie policies. **Get the right vehicle insurance.** Standard car insurance doesn't cover you if you're using your ute for business. You need commercial vehicle insurance or an endorsement on your policy. This costs 20–40% more but it's mandatory. **Write proper contracts for large jobs.** For work under $500, a quote and verbal agreement is fine. For anything over $1,000, use a written contract that includes scope of work, timeline, payment terms, and what happens if the client changes their mind mid-project. You can find tradie-friendly templates online or ask your accountant. --- ## Frequently Asked Questions