The checklist
| Do it | What | Why it is in this order |
|---|---|---|
| Before you quit | Check your licence, your ticket currency, and whether you have a restraint or notice period in your contract | Cheapest thing to discover early |
| Before you quit | Work out your charge-out rate | It decides whether the plan works at all |
| Before you quit | Have a cash buffer — setup costs plus several months of living expenses | You will do work in week one and be paid for it in week six |
| Week 1 | Choose a structure — sole trader or company | Everything below is registered against it |
| Week 1 | Apply for an ABN (free, through the ABR) | You cannot invoice properly without one |
| Week 1 | Register a business name, if you are trading as anything other than your own name | Needs the ABN first |
| Week 1 | Trade licence or registration for your state | Doing licensed work without it is the one unrecoverable mistake |
| Week 1 | Public liability insurance, plus tool cover and income protection | Most sites and agents will not let you start without evidence of cover |
| Week 1 | Separate business bank account | Mixing accounts is the reason first-year books cost so much to fix |
| Week 2 | A way to quote and invoice, and a payment method on the invoice | The first invoice should not be the first time you think about this |
| Week 2 | Second account for tax and GST, and a set-aside habit | Start it before the first payment lands, not after |
| Ongoing | GST registration once turnover reaches $75,000 — watch it, do not wait for a surprise | The threshold arrives faster than most people expect |
| Ongoing | Super for yourself, and records kept as you go | Nobody is paying it for you any more |
1 · Sole trader or company
Most tradies start as sole traders. It is quick, cheap to run, and the tax is simply part of your personal return. The trade-off is that there is no legal separation between you and the business — a claim against the business is a claim against you.
| Sole trader | Company (Pty Ltd) | |
|---|---|---|
| Setup cost | ABN is free | Registration fee, plus ongoing annual fees |
| Running cost | Low — one tax return | Higher — company return, more accounting |
| Liability | Your personal assets are exposed | Generally separated, subject to director duties and to anything you have personally underwritten — a supplier trade account you signed for, for instance |
| Tax | Personal marginal rates on business profit | Company rate on company profit, then tax again when it reaches you |
| Paying yourself | You draw money; it is not a wage | Wages, director fees or dividends — with the obligations that come with each |
| Best for | Starting out, working alone, lower-risk work | Higher turnover, higher-risk work, taking on people, or where clients require it |
The honest summary: pick sole trader if you are starting out and working alone, and revisit it once turnover or risk grows. Changing later is normal and not especially painful. Getting advice on the choice is worth it, because the answer depends on your assets, your trade and your family situation rather than on a general rule.
2 · The registrations
Three different things that people routinely confuse:
- ABN — your business identifier. Free, applied for through the Australian Business Register. Without it quoted to a business customer, they may be required to withhold a large share of your payment. Step-by-step: how to get an ABN.
- Business name — only needed if you trade as something other than your own legal name. Registered with ASIC, and it is a name, not a trade mark.
- GST registration — generally required once your GST turnover reaches $75,000, optional below it. Registering means adding 10%, claiming GST credits, and lodging BAS. The full argument for and against registering early: do I need to register for GST?
Start at business.gov.au, which is the government's own front door for all three and will not charge you for something that is free.
3 · Licensing, which is not optional and is not national
Trade licensing in Australia is set by each state and territory, not federally. Electrical and plumbing work require a licensed tradesperson everywhere; beyond that, most states also license building work above a contract value, and the value and the definitions differ in every one of them. Some states require a separate contractor licence to run your own business even where you already hold a tradesperson's licence.
Two things to check with your own state or territory regulator before your first job: that you hold the right class of licence for the work and for contracting in your own right, and whether the jobs you plan to take need a written contract in a prescribed form or home-warranty insurance. Working unlicensed generally also means working uninsured, which is how one job costs a house.
4 · Insurance
- Public liability — the one everyone asks for evidence of. Sites, agents and many domestic customers will not let you start without it.
- Tool insurance — a ute broken into overnight is a business that cannot work tomorrow.
- Income protection — as an employee somebody else carried this risk. Nobody carries it now.
- Professional indemnity — where you design or advise as well as install.
- Workers compensation — required once you employ, and possibly for a company paying its own working director. See the warning above.
business.gov.au's insurance guidance lists what is compulsory versus advisable; what applies to you depends on your trade, your structure and your state.
5 · Working out what to charge — the part that decides everything
The most common and most expensive mistake in this whole page is charging close to your old wage. As an employee, someone else paid for your ute, your insurance, your tools, your training, your sick days, your annual leave and your super — and they only had to fill 38 hours because someone else found the work.
On your own, your rate has to cover: the income you want, plus every business cost, plus the fact that a large share of your week is not billable at all. Quoting, driving, buying materials, chasing money and paperwork are real hours that no customer pays for directly. That is why a realistic charge-out rate is commonly two to three times an equivalent wage.
Do not guess it. The charge-out rate calculator builds it from your own overheads and your own billable hours, and shows you the billable ratio it landed on — which is usually the number that surprises people most.
6 · Getting paid, which is a system and not a hope
New trade businesses rarely fail from a lack of work. They fail because the money for work already done arrives sixty days late while the wholesaler wants paying in thirty. Four things fix most of it:
- Invoice the day the job is done, not at the end of the month. The invoice sent from the driveway gets paid first.
- Put a way to pay on the invoice — a bank transfer with a PayID, or a card link. Every extra step is another week.
- Take a deposit on materials-heavy jobs. Check your state's rules first: deposits for tradies.
- Chase on a schedule, calmly. Not when you are angry, and not never — the chase timeline.
And make the invoice itself valid: what a tax invoice must contain. An accounts department will bounce one that is missing your ABN, and the clock restarts.
7 · Tax and super, from day one
Nobody is withholding tax for you now. Put a percentage of every payment into a second account the moment it lands — the tax set-aside calculator gives you a starting percentage, and this guide explains why it varies. Once registered for GST, that put-aside covers GST as well, and it is due quarterly rather than annually — see your first BAS.
Super is also nobody else's job now. A sole trader is generally not required to pay super for themselves, which is exactly why so many tradies reach fifty with none — set a rate you can live with and pay it like a bill. Talk to your accountant about the deductibility of personal contributions.
8 · The tools you actually need
Short list, and none of it is exotic: a way to quote on site, a way to invoice with GST and a payment method, somewhere to keep customer and job records, a system for receipts, and a calendar. Most tradies start with a notes app and a spreadsheet, and most switch within a year — usually after the first quarter where an unpaid invoice was simply forgotten.
Start with the admin sorted — quote, invoice and get paid from the phone →Yamate does the quoting, invoicing, chasing and record-keeping for solo tradies and small crews, and shows your GST, tax and profit per job as an estimate as you go — it is not tax advice and you still lodge your own returns. Three people are included on the solo plans; a bigger crew moves to the Company plan at $79/mo for ten people, $15/mo per person after that. Sign up before 30 September 2026 and lock in the Founder plan at $19/mo — forever. It's $29/mo after that. No lock-in, cancel anytime. Prices in AUD.
FAQ
What do I need to start my own trade business?
A structure decision, an ABN, the trade licence your state requires, public liability insurance, a separate business bank account, and a way to quote and invoice. GST registration is generally required once turnover reaches $75,000.
Sole trader or company?
Most start as sole traders — simple and cheap. A company separates business liability from personal assets and suits higher-risk or higher-turnover work, at more cost and more obligations, including possible workers compensation cover for a working director. Get advice on the choice.
How much money should I have behind me?
Enough for setup, your first materials runs, and several months of living costs. The gap between doing work and being paid for it is what ends most new trade businesses, not a shortage of work.
Do I need to register for GST straight away?
Generally only at $75,000 turnover, though you can register voluntarily earlier. Registering means charging GST, claiming credits, and lodging BAS.
Can I do it while still employed?
Many tradies start on weekends before going full-time, which is a sensible way to test the rate and the demand. Check your employment contract for restraints and conflicts first, and remember the licensing and insurance obligations apply to the first paid job, not the tenth.
What should I charge?
Not your old wage plus a bit. Build it from your own overheads and your own billable hours with the charge-out rate calculator — the realistic answer is commonly two to three times an equivalent wage.
Related
General information for Australian businesses, not tax, legal or financial advice. Business structure, licensing, insurance and workers compensation requirements depend on your trade, your state or territory and your circumstances — check business.gov.au, your own state regulator, and your accountant before acting. This page describes the position as read in August 2026.