Tax for Builders
Income tax, GST, BAS, PAYG and super — what you actually have to do as a sole trader or small firm, without the jargon.
Nobody withholds tax for you when you work for yourself, so the money you bank isn't all yours — a slice belongs to the ATO. Get the set-aside right and tax time is a non-event; get it wrong and the bill lands when the account's empty. Here's the whole picture for a tradie: what you owe, when, and the free tools to work each bit out.
Income tax and the set-aside
As a sole trader you pay individual resident rates on your business profit — nil up to $18,200, then 16%, 30%, 37% and 45% (2025-26) — plus the 2% Medicare levy, and HELP repayments if you've a study loan. No employer sets it aside, so you do: parking a rough 25–30% of profit as you go keeps you covered. Work out your exact slice, then track it month to month so nothing creeps up on you.
GST and your BAS
Once your turnover hits $75,000 (or you expect it to) you must register for GST: you add 10% to your invoices, claim the GST back on your purchases, and lodge a Business Activity Statement — usually quarterly. The GST you collect isn't yours either; it's the ATO's, sitting in your account until the BAS falls due. Know the figure before it lands.
PAYG instalments and no-ABN withholding
After your first profitable year the ATO usually puts you on PAYG instalments — pre-paying income tax in quarterly chunks so a whole year's bill never lands at once. And if you pay a supplier or subbie who doesn't quote an ABN, you generally have to withhold 47% and send it to the ATO; quote an ABN and nothing is withheld.
Super — for you and anyone you pay
Take on a hand and you owe the super guarantee — 12% (2025-26) of their ordinary time earnings, paid at least quarterly (payday super from 1 July 2026). Pay it late or short and the Super Guarantee Charge stings and isn't deductible. Your own super as a sole trader is optional but deductible — a quiet way to trim this year's tax.
Deductions and the instant asset write-off
Tools, the business share of your ute and fuel, PPE, insurance, your phone, the accountant — all deductible. Bigger buys can be written off in full the year you start using them under the instant asset write-off ($20,000 per asset to 30 June 2026), or depreciated above that. Claim the business portion, keep the tax invoices, and leave out everyday clothes and the daily commute.