Taking on an apprentice is one of the most valuable investments a trade business can make — but it comes with specific legal obligations that many small tradie employers don't fully understand. From award wages and TAFE allowances to government subsidies and training agreements, here's what you need to know as an employer before you sign someone up.

What Is an Apprenticeship in Australia?

An apprenticeship is a formal training contract between an employer and a trainee. It combines on-the-job training (working in your trade business) with formal off-the-job training (TAFE, TAFE equivalent, or an RTO).

Apprenticeships are regulated by state and territory training authorities and must be registered with an Australian Apprenticeship Support Network (AASN) provider.

Trade apprenticeships typically run:

  • Electrical: 4 years
  • Plumbing: 4 years
  • Carpentry/Joinery: 3 years
  • Painting: 3 years
  • HVAC Refrigeration: 4 years
  • Concreting: 2–3 years

Upon completion, the apprentice receives a nationally recognised qualification (typically a Certificate III in the relevant trade) and is eligible for full tradesperson classification under the relevant modern award.

Your Obligations as an Apprentice Employer

1. Formalise the Training Contract

Before your apprentice starts working, you must formalise the training arrangement through an AASN provider (Australian Apprenticeship Support Network). The AASN:

  • Registers the training contract with the state training authority
  • Connects you with government subsidies and incentives
  • Provides support and advice throughout the apprenticeship

Finding an AASN: Search at australianapprenticeships.gov.au for an AASN in your region.

2. Provide a Structured Training Plan

You must work with the apprentice and the AASN to create a Training Plan — a document outlining what skills and competencies the apprentice will develop, and in what timeframe.

This isn't optional admin. It's a legal condition of the training contract and is used to assess whether the employer is fulfilling their training obligations.

3. Release the Apprentice for TAFE

Apprentices must attend regular off-the-job training at TAFE or an equivalent RTO. You are legally required to release the apprentice during normal working hours to attend training.

Most apprentices attend TAFE one day per week (block releases are also common — several weeks at TAFE at once, followed by on-site work).

You continue paying the apprentice's full wage during TAFE attendance. TAFE days are paid working days.

4. Supervise and Mentor

Apprentices must be supervised by a qualified tradesperson at all times when performing work that requires a licence or qualification. An apprentice plumber cannot perform licensed plumbing work unsupervised — this is both a legal obligation and a safety requirement.

What You Must Pay Apprentices

The Award Rate

Apprentice wages are set by the relevant Modern Award and are calculated as a percentage of the qualified tradesperson rate. These percentages increase with each year of apprenticeship.

Building and Construction Award (Carpenters, Painters, Concreters):

  • 1st year — 42% — ~$445
  • 2nd year — 55% — ~$581
  • 3rd year — 75% — ~$793
  • 4th year — 88% — ~$931

Electrical Contracting Award (Electricians):

  • 1st year — 40% — ~$504
  • 2nd year — 55% — ~$694
  • 3rd year — 75% — ~$945
  • 4th year — 88% — ~$1,109

Plumbing Award:

  • 1st year — 42% — ~$510
  • 2nd year — 55% — ~$668
  • 3rd year — 75% — ~$911
  • 4th year — 88% — ~$1,070

Always check the current award rates at fairwork.gov.au — these are updated annually on 1 July.

Adult Apprentice Minimum

If your apprentice is 21 or over (an adult apprentice), the award percentage cannot result in a wage below the National Minimum Wage. In 2025–26, the National Minimum Wage is $915.90 per week. If the percentage-based rate falls below this, the adult apprentice must receive the minimum wage floor.

The TAFE Allowance: Often Forgotten

Many apprentice employers don't realise they're required to pay certain TAFE-related costs.

Under most trade awards, you must pay the apprentice's TAFE/training fees and reimburse the cost of prescribed textbooks required for the course. This doesn't mean all stationery or personal study materials — just the officially prescribed course materials.

Some awards also include a tool allowance, which must be paid from a specific year of the apprenticeship onward.

Check the specific award for your trade — requirements vary.

Superannuation for Apprentices

Apprentices are employees and are entitled to superannuation. The employer must pay the Super Guarantee (11.5% for 2025–26) on the apprentice's ordinary time earnings.

Common mistake: Some employers believe apprentices earning under a certain threshold don't attract super. Since 1 July 2022, the previous $450/month threshold was removed. All employees — regardless of how much they earn — are entitled to super.

Super is paid quarterly into the apprentice's nominated super fund.

Leave Entitlements for Apprentices

Apprentices have the same leave entitlements as any full-time employee:

  • Annual leave: 4 weeks per year
  • Sick and carer's leave: 10 days per year
  • Public holidays: paid
  • Long service leave: accrues under state-based legislation

Annual leave during TAFE block release: If the apprentice is on a block release (at TAFE full-time for a month), this is training time — not annual leave. You pay their ordinary wage. The apprentice's annual leave balance is not affected.

Government Subsidies and Incentives for Apprentice Employers

This is where many employer tradies leave money on the table. Several government programs provide cash payments to employers who take on apprentices.

Australian Apprenticeships Incentives Program

The Federal Government provides financial incentives to employers through the AASN. Incentives vary based on trade, priority occupation, and apprentice demographics. For 2025–26:

Australian Apprentice Training Support Payment (for employers):

  • Available for employers who take on apprentices in priority occupations (most trades qualify)
  • Paid in instalments at key milestones during the apprenticeship
  • Amounts vary by trade and apprentice characteristics — check australianapprenticeships.gov.au

Hiring Incentive:

  • Additional payments for hiring Australian Apprentices in priority wage levels
  • Available through AASwnet providers

State-Based Incentives

Each state and territory offers additional apprentice employer incentives, which vary and change regularly:

  • NSW — NSW Apprentice Incentive — Varies by trade
  • VIC — Skills First Subsidies — Reduces TAFE fees
  • QLD — QLD Apprenticeship Incentive — Up to $5,000
  • WA — Employer Incentive Payment — Up to $4,000

Check your state government's training department website for current programs. Your AASN provider can identify all applicable incentives for your specific situation.

Setting Up Payroll for an Apprentice

Once you've formalised the training contract:

  1. Get the apprentice's TFN Declaration form — signed and submitted to the ATO within 14 days
  2. Set up the apprentice in your payroll software with their correct award classification and year of apprenticeship
  3. Record the correct award percentage — this increases automatically at the anniversary of their start date each year
  4. Set up STP reporting — the apprentice's earnings must be reported to the ATO via Single Touch Payroll at each pay event
  5. Set up super — open a super account in the apprentice's name if they don't nominate a fund (you can use your default fund)

Important: Set a calendar reminder to update the apprentice's wage rate at each anniversary. Forgetting to increase rates is one of the most common underpayment errors for apprentice employers.

Managing the TAFE Relationship

Your relationship with the RTO or TAFE delivering the training matters for both compliance and quality:

  • Receive and review the Training Plan — make sure it reflects the work the apprentice will actually do
  • Attend progress reviews if invited — RTOs may request employer participation in assessments
  • Sign off on competency demonstrations — some qualifications require employer sign-off on on-the-job competencies
  • Report concerns about apprentice performance to the RTO — don't manage performance issues in isolation

If your apprentice is consistently failing TAFE assessments, the RTO may contact you. Ongoing poor performance can result in the training contract being cancelled.

If an Apprentice Wants to Leave

An apprentice can cancel their training contract before completion. So can you, the employer. The process:

  1. Contact your AASN provider
  2. Complete a cancellation form (available through the AASN)
  3. The state training authority cancels the training contract

Notice periods: Awards typically require notice — both from you (employer) and the apprentice. Check the specific award.

Probationary period: Most states allow a 3-month probationary period at the start of an apprenticeship. If either party is unsatisfied during this window, the contract can be cancelled with less formality.

If you cancel an apprentice's training contract without following the proper process, you may still owe entitlements for the notice period.

Apprentice Cost vs Value Analysis

Many tradie business owners are hesitant to take on apprentices because of the cost and time required. A realistic analysis often shows they're an excellent investment.

Year 1 cost (carpentry apprentice as example):

  • Wages (38hrs/wk): ~$445/week × 52 = $23,140
  • Super (11.5%): $2,661
  • Workers comp (~4% of wages): $926
  • Training time cost (supervision, mentoring): estimate 2hrs/week × your rate
  • TAFE fees (if applicable): varies
  • Total approximate cost: ~$28,000–$32,000

Government subsidies received:

  • Federal incentives (varies): ~$4,000–$8,000 over apprenticeship
  • State incentives: varies

Year 1 net cost after subsidies: approximately $20,000–$28,000

Year 4 value (fully qualified, fourth year apprentice):

  • Wages: ~$931/week = $48,412/year
  • Value of work if charged at $70/hour for 30 billable hours/week: $109,200/year
  • Margin on apprentice labour: ~$60,000+

By year 4, a well-trained apprentice is generating significantly more value than they cost. The investment in years 1–2 pays back many times over by years 3–4 and beyond as a qualified employee.

Comparison: Apprentice vs Qualified Employee Hire

  • Weekly wage cost — ~$445 — ~$1,178
  • Annual wage — ~$23,140 — ~$61,256
  • Government subsidies — Yes — significant — No
  • Productivity (Year 1) — 20–40% of qualified — 100%
  • Training time required — High (daily supervision) — Minimal
  • Skill development potential — Yours to shape — Fixed existing skills
  • Retention likelihood — High if managed well — Moderate
  • Long-term value — Very high by Year 3–4 — High immediately

Frequently Asked Questions

Q: Can I hire an apprentice if I'm a sole trader?
Yes. Sole traders can be registered as apprentice employers. You must be able to demonstrate you can provide appropriate supervision and training — which means being a qualified tradesperson yourself in the relevant trade.

Q: What if the apprentice is injured on the job?
Workers compensation applies the same as for any employee. Ensure your policy covers apprentices (it should by default). Report any injury to your insurer promptly and manage the return-to-work process in the usual way.

Q: Do I have to keep an apprentice if my work dries up?
If your business has a genuine downturn and can't provide work or pay wages, you can apply to temporarily suspend the training contract. If you have no work for an extended period, you may be able to cancel the contract — but this should be a last resort, and proper process must be followed.

Q: Can I take on a mature-age apprentice?
Yes. There is no maximum age for an Australian apprentice. Adult (mature-age) apprentices attract different wage rules (the National Minimum Wage floor applies) and may be eligible for specific targeted incentive payments.