Tradies & Contractors

Accounting for Tradies & Contractors

Specialist accounting and tax services for tradies, based on the ATO tradie tax guidelines.

Income You Must Declare

All income must be declared, including:

• Wages and salary from employers
• Allowances (tools, travel, uniforms, laundry)
• Contractor and subcontractor income
• Cash jobs and cash tips (all income is assessable)
• Income from side jobs or second jobs

Common Tax Deductions for Tradies

The ATO allows tradies to claim deductions for:

• Tools and Equipment: Power tools, hand tools, and equipment over $300 depreciated over their effective life; items under $300 claimed immediately
• Vehicle Expenses: Fuel, oil, registration, insurance, repairs, and depreciation ??? you must use logbook method or cents-per-km method
• Work Clothing: Protective clothing, steel-capped boots, high-vis gear, and uniforms with your employer logo
• Sun Protection: Sunscreen, sunglasses, and hats for outdoor work
• Phone and Internet: Work-related portion of mobile and internet costs
• Union and Professional Fees: Union dues, professional association memberships
• Home Office: If you perform administrative tasks from home
• Travel: Between job sites, to suppliers, or for work-related training

Vehicle Expense Claims

The ATO requires you to substantiate vehicle claims with:

• Logbook Method: Maintain a valid logbook for 12 continuous weeks, then claim business-use percentage of all costs
• Cents Per Km: Claim up to 5,000 business km at the ATO rate (85 cents per km for 2024-25)
• Trips between home and work are only claimable if you transport bulky tools or equipment

ABN and Contractor vs Employee

If you operate under an ABN, you need to understand whether you are a genuine contractor or an employee. The ATO has specific tests to determine this, and getting it wrong can result in unpaid super and tax obligations.

Source: ATO ??? Tradies