Starting a trade business in Australia: a practical checklist

Going out on your own is one of the biggest calls you'll make as a tradie. The trade skills are the part you already have. The rest is registrations, licences, insurance, tax and the paperwork that keeps money coming in, and most of it is easier to get right before your first paid job than to untangle later.

This checklist walks through each step in the order most sole traders tackle it. Each one links to the government page that sets the rule, so you can check the detail for your state and situation. Rules change, so treat the official page as the final word.

Check you're licensed for the work you'll do

Start with your licence, because it decides what work you can legally quote. Licensing is run by the states and territories, not the federal government, and the thresholds differ a lot.

• In Queensland, the QBCC says you need a licence for most building work valued over $3,300, and for plumbing, drainage and gasfitting work of any value.
• In NSW, you need a licence for residential building work over $5,000 including GST, and for specialist work such as electrical, plumbing, gasfitting and air conditioning work at any value.
• In Victoria, domestic building work over $10,000 needs registration with the Building and Plumbing Commission, with exemptions for some single-trade work.

Electrical, plumbing and gasfitting work is licensed separately in every state and territory, usually whatever the size of the job. If you're not sure what applies, the Australian Business Licence and Information Service (ABLIS) lists the licences for your trade and location.

Get your ABN and pick a structure

Your Australian Business Number (ABN) identifies your business to the ATO, other businesses and your customers. Registering for an ABN is free through the Australian Business Register. Before you apply, decide on your business structure, because the ABN is issued to that structure.

Most tradies start as a sole trader. It's cheap and simple: you use your own tax file number, and the business's profit is taxed as your income. The trade-off is unlimited liability, which means your personal assets are at risk if the business can't pay its debts. A company costs more to set up and run but is a separate legal entity. We compare the two in Sole trader vs company in Australia, and business.gov.au explains all the structures, including partnerships and trusts.

Register a business name if you need one

If you trade under your own first name and surname, you don't need to register a business name. ASIC's example: John Smith doesn't need to register "John Smith", but would need to register "John Smith Gardening". In other words, as soon as you add your trade or anything else, it needs registering.

From 1 July 2026 a business name costs $47 for one year or $108 for three years with ASIC. Registering a name doesn't give you exclusive rights to it. For that you need a trade mark. While you're there, grab a matching domain name and social media handles.

Work out GST

You must register for GST within 21 days of your GST turnover reaching $75,000, or as soon as you expect it to reach $75,000 in the next 12 months. That's turnover, not profit. A busy sole trader charging out labour and materials can get there quickly. The ATO's registering for GST page explains how to work it out.

You can also register voluntarily below the threshold. Once you're registered, you add 10% GST to your prices, claim GST credits on what you buy for the business, and lodge a business activity statement (BAS). If your clients are mostly builders and other businesses, they can claim the GST back, so being registered rarely costs you work.

Sort out insurance before the first job

business.gov.au lists the insurance some businesses need by law, and what's optional but sensible. For most tradies, the list looks like this:

• Public liability covers injury to other people or damage to their property caused by your work. Some states require it for certain occupations, and most builders, strata managers and commercial clients won't let you on site without a certificate of currency.
• Workers compensation is compulsory once you employ staff, through your state or territory scheme. It doesn't cover you as a sole trader, so look at income protection or accident and sickness cover for yourself.
• Tools and equipment cover is worth pricing. Theft from utes and vans is a common claim.
• Home warranty insurance (also called home indemnity or domestic building insurance) applies to residential building work over a state threshold.

business.gov.au has a plain-English overview of the types of business insurance. A licensed insurance broker can tell you what your contracts and licence require.

Set up your money and tax

Open a separate bank account for the business. It isn't required for a sole trader, but business.gov.au recommends it, and it makes your bookkeeping, BAS and tax return far simpler. You must keep business records, generally for at least five years.

As a sole trader you pay tax on your business profit at individual rates. For 2026–27, the ATO's resident tax rates start at 15% on income between $18,201 and $45,000, rising to 45% above $190,000, plus the 2% Medicare levy. Nobody takes tax out of your pay any more, so put a share of every payment aside.

Once your business income reaches a certain amount, the ATO puts you into PAYG instalments, usually quarterly, so you're not hit with one big bill after your return. You can also join voluntarily, which business.gov.au suggests if you're new to business and expecting a profit.

There are a few more tax rules to be aware of:

• Paying contractors: if your business is in building and construction and you pay contractors, you may need to lodge a taxable payments annual report (TPAR) by 28 August each year.
• Employees: if you hire, you'll need to register for PAYG withholding, pay super at 12% of qualifying earnings and pay at least the minimum wage or the award rate. Fair Work's minimum wages page is the starting point.
• Your own super: it's optional for sole traders but worth planning for.

Get your paperwork system working

Most new trade businesses don't fail on the tools. They struggle with cash flow: quotes that go out late, invoices that never get sent, and jobs that run over without anyone noticing. Decide how you'll handle the basics before the work piles up:

1. Quotes. Use a consistent format with your ABN, a clear scope, what's excluded, GST and how long the price is valid. Our guide to how to quote a job goes step by step.
2. Invoices. If you're registered for GST, issue proper tax invoices, and send them the day the job finishes.
3. Jobs and diary. Keep the address, notes and photos with each job, so nothing lives only in your head or your camera roll.
4. Safety. If you do high-risk construction work, you need a safe work method statement (SWMS) before the work starts. Safe Work Australia's interactive SWMS tool explains what goes in one.
5. Hours and costs. If you have a crew, track hours against each job so you know which jobs actually make money.

Tradie Business covers this in one app built for Australian tradies. You get quotes, invoices with GST, a job diary and scheduling, timesheets, SWMS and safety forms and job costing. Xero and MYOB sync is coming soon, but it isn't available yet. You can see the pricing and how it's set up for electricians, plumbers, builders and other trades.

How many new trade businesses keep trading?

It's worth knowing the odds going in, and the official figures are sobering. The Australian Bureau of Statistics follows every business that starts trading in a year, and counts how many are still going one, two and three years later.

Of the 73,113 construction businesses that started trading in 2022–23, 74.8% were still trading in June 2024. By June 2026 that was down to 48.0%, so about half had stopped. That's close to the rate across all industries (49.2%). Construction is still a big part of the economy: at 30 June 2026 there were 478,651 construction businesses, up 3.4% on a year earlier.

The ABS doesn't record why a business stops. Some close because of money trouble, while others close because the owner takes a job, retires, or restructures into a new entity with a new ABN. The figures do show that keeping a new business going past the first few years is hard in every industry, so the setup basics above matter.

Your first-month checklist

1. Confirm the licence for your trade and state, and any registration for the size of jobs you'll take on.
2. Choose a structure and apply for your ABN.
3. Register a business name if you're not trading under your own name.
4. Work out whether you need to register for GST now, or when you're likely to reach $75,000.
5. Arrange public liability and any insurance your licence or contracts require. Cover yourself for injury and illness, too.
6. Open a business bank account and set aside a share of every payment for tax.
7. Set up quotes, invoices, a job diary and record-keeping before the first job, not after the tenth.
8. Book a meeting with a registered tax agent to set up your first year properly.

Once you're running, list your business on Tradie Guide so local customers can find you. Then read our guide to marketing for tradies, and our other guides on running a trade business.