Going out on your own
Everything you have to sort, before your first invoice.
Nobody hands you this list. You find it out one mistake at a time, or from a bloke at the wholesaler who half remembers. So here it is in one place: what the ATO requires, what your state requires, what it costs and how long it takes. Every figure links back to where it came from.
Skip the reading. Build your plan.
Eight quick questions and you get the whole thing as a step by step list for your trade and your state, with a PDF to keep. Everything on this page, filtered down to just what applies to you.
Build my plan, freeStart with your state
Licensing is state by state, and the differences are not small. Pick yours for the licence you need, who issues it, what it costs and how long the wait is.
Somewhere else? The national side below is the same wherever you are, and your state’s regulator will have the licensing.
The order to do it in
Most of it is free and most of it is quick. The licence is the one that takes months, so start that first and do the paperwork while you wait.
- 1
Decide how you will trade
Sole trader or company. This comes first because the ABN application asks you. For most tradies starting out it is sole trader.
Nothing
- 2
Check you have a tax file number
You almost certainly do, from your normal tax. Use that one. There is no such thing as a business TFN for a sole trader, so there is nothing to apply for.
Nothing
- 3
Apply for your ABN
At abr.gov.au. Supplying your TFN is what makes it issue on the spot. This is the only thing a sole trader genuinely registers.
Free
- 4
Register your business name
Through ASIC Connect, about 10 to 15 minutes. You need your ABN, or the reference number if yours is still under review.
Only if: Only if you trade as anything other than your exact first name and surname. Dave Smith needs nothing. Dave Smith Plumbing needs this.
$47 for one year, $108 for three
- 5
Get your trade licence
The state one. This is the big one, it takes by far the longest, and it is the only thing on this list that actually lets you do the work. Start it early.
Varies by trade and state, see your state guide
- 6
Sort your insurance
Public liability at minimum. Several trade licences will not be issued without a certificate of currency, so this often has to happen before step 5 finishes, not after.
Talk to a broker who knows trades
- 7
Register for GST
Free, through the ATO. You get 21 days from the point you are required to.
Only if: Only once your turnover hits $75,000 on a rolling twelve month basis, or from the start if you expect to pass it in year one.
Free
- 8
Open a business bank account
Not compulsory for a sole trader, but do it anyway. Keeping the business money separate is what makes tax time survivable.
Depends on the bank
What it costs to start, all up: nothing if you trade under your own name, or $47 to $108 if you want a business name. That is the entire federal government bill. The real money is your trade licence, your insurance and your tools, and the licence is state by state.
Every bit of it, in detail
None of this changes with your postcode or your trade. Your licence does, and that is on your state’s page.
Registering as a sole trader
There is no such thing. You do not register as a sole trader, you just get an ABN.
This is the most googled question about going out on your own, and the answer surprises people: no Australian government agency runs a sole trader register. There is nothing to apply for and nothing to pay.
You become a sole trader the moment you start carrying on a business in your own name. The only thing you actually register is an ABN, and you nominate sole trader as your structure inside that application. That is where people see the words and assume there was a separate step.
Compare it with a company, which has to be registered into existence with ASIC for $636. A sole trader business is not registered into existence at all. Legally it is just you.
Catches people out: If a website offers to register you as a sole trader for a fee, it is selling you an ABN application the government does for free.
Get your ABN
Free, online, and usually issued on the spot.
Apply at abr.gov.au. It costs nothing, and if the ABR can identify you from what you enter, mainly your tax file number, you get your eleven digit number immediately. If it cannot, you get a reference number instead and they aim to review it within 20 business days.
Have ready: your TFN, any ABN you have held before, the date you expect to start (it cannot be more than six months ahead), your contact and postal details, and your business activity, which for a tradie is construction.
Not everyone is entitled to one. If you have not started trading yet, the ABR accepts commencement activities as evidence, and its own examples are tradie shaped: advertising, buying business cards, taking out public liability, leasing equipment, or issuing quotes.
Catches people out: Two real traps. The ABR rejects email addresses starting with info@, sales@ or support@, which is exactly what most people set up first. And an entitlement review can come at any time, so keep proof of when you actually started: a worker pushed onto an ABN by a head contractor when they are really an employee is the classic sham contracting setup.
Registering a business name
$47 for a year, $108 for three. Only needed if you trade as anything other than your exact name.
ASIC's rule: you must register a business name unless you trade under your own first name and surname and nothing else. So Dave Smith needs nothing and pays nothing. Dave Smith Plumbing is a different name and has to be registered. That one distinction decides whether this step costs you $47 or zero.
You register through ASIC Connect and it takes about 10 to 15 minutes. You need an ABN, or the ABN reference number if yours is still under review, so a slow ABN does not block you.
You will also need a service of documents address, and a principal place of business, which has to be a street address rather than a PO box.
It is registered once payment clears. Pay by card and it is usually same day to two business days; pay by bank transfer and add several days while the payment settles.
Catches people out: Registering the name gives you no rights to it. ASIC says so plainly: it is a record linking a trading name to an ABN, nothing more. Only a registered trade mark stops someone else using it, and that is a separate body and a separate fee. Three years at $108 also beats $47 a year, saving you $33.
Sole trader or company
Sole trader costs nothing to set up. A company is $636 to register and $342 every year after that.
As a sole trader you are the business. You use your own tax file number, report the business in your personal tax return, and pay tax at your individual rate. There is no separate business tax return. The ATO is blunt about the trade off: you are legally responsible for everything, including debts and losses.
A company is a separate legal entity, which is the main reason tradies move to one. Registering a proprietary limited company costs $636, and there is an annual review fee of $342 for as long as it exists. That recurring fee is the number most people miss when they compare the two, because a sole trader has no equivalent.
You can employ people as a sole trader. You cannot employ yourself, and you cannot claim a deduction for money you take out of the business for yourself.
Catches people out: If you are moving to a company mainly to save tax, look up the personal services income rules first. A tradie who supplies their own tools and plant usually passes the results test and is fine. A labour only subbie working on the builder's tools on hourly rates may not be, and then the structure does not deliver the saving they were sold.
GST, and the $75,000 line
Register within 21 days of your rolling twelve month turnover hitting $75,000.
The test is not the financial year, which is where people go wrong. It is rolling: this month plus the previous eleven, or this month plus the next eleven if you can already see it coming. Hit $75,000 either way and you must register within 21 days.
You need your ABN first. Register through ATO online services, by phone on 13 28 66, or through a registered tax or BAS agent. It is free. Once registered you generally stay registered at least twelve months, and you lodge a BAS, usually quarterly.
You can register voluntarily under the threshold. Some tradies do, because they can claim the GST back on tools, a ute and materials.
Catches people out: Miss the registration and the ATO can make you pay GST on every sale since the date you should have registered, even though you never charged it to the customer, plus penalties and interest. That comes out of your pocket.
PAYG instalments, the year two surprise
In your first year nobody takes tax out for you. In your second the ATO starts asking quarterly.
PAYG instalments are prepayments towards your income tax, usually quarterly. When you lodge your return they are offset against what you owe, so you are left with little or nothing to pay.
The ATO decides whether you go into the system from your most recently lodged return. So year one you pay nothing during the year, then get a bill. From then on you are usually paying as you go.
That gap is what catches people: the year one bill and the first year two instalments can land close together.
Catches people out: Put money aside from your very first invoice. A separate account you do not touch is the simplest way, and it is the main reason to open a business bank account early.
A business bank account
Not compulsory for a sole trader. Do it anyway.
business.gov.au lists a separate account as optional for a sole trader, because legally the business money is your money. For a company it is compulsory.
Optional or not, running the business through your personal account is how people end up guessing at tax time, missing deductions and having no real idea what the business earned.
It also gives you somewhere to park the GST and the tax you are going to owe, so the money is there when the bill turns up.
If you pay subbies: the TPAR
Building and construction businesses that pay contractors lodge a report by 28 August each year.
If half or more of your business is building and construction services and you pay contractors or subcontractors for that work, you have to report what you paid them to the ATO in a taxable payments annual report.
It is due by 28 August, covering the year to 30 June, and it has to be lodged electronically. Paper is no longer accepted.
This one catches sole traders who sub work out and have never heard of it. Penalties apply for lodging late.
Catches people out: You need each subbie's ABN and the totals you paid them, so record it as you go rather than reconstructing twelve months of invoices in late August.
What records you have to keep
Five years, and the ATO is specific about what counts.
You are legally required to keep records of everything to do with your tax, super and registrations, from the day you start until after you close.
A record needs enough detail to show what the transaction was: at minimum the date, the amount and a description. Keep them for five years from when you prepared them or the transaction was completed, whichever is later.
They have to be in English and you have to be able to produce them if asked. Digital is fine.
Catches people out: This is the whole reason to keep your quotes, invoices and receipts in one system from day one, rather than a shoebox and a phone camera roll.
Superannuation
Not compulsory for yourself. Compulsory the moment you put someone on, and the rules changed in July 2026.
If you are self employed as a sole trader you do not have to pay super guarantee for yourself. You can contribute voluntarily and most people can claim a deduction for it.
If you employ anyone, super applies to them at 12% and it is not optional.
From 1 July 2026 super is no longer quarterly. It has to be paid on each pay run and reach the fund within seven days of payday. The ATO's free Small Business Superannuation Clearing House also closed on 1 July 2026, so you need payroll software or a commercial clearing house before you run your first pay.
Catches people out: Anything you read that still says pay super quarterly by the 28th is out of date. The quarterly float a lot of tradies relied on for cash flow is gone.
Putting your first person on
A separate set of obligations, and they start before their first day, not after.
Before you hire: check they are genuinely an employee and not a contractor, find the right award and pay rates through Fair Work, and arrange workers compensation.
Before their first day: give them the Fair Work Information Statement, collect a tax file number declaration, register for PAYG withholding (free, one time, and it has to be done before you first pay them), and set up Single Touch Payroll.
Within 28 days: give them a superannuation standard choice form, and get their stapled fund details from the ATO if they do not pick one.
Ongoing: withhold tax each payday, pay at least monthly, issue a pay slip within one working day of paying them, and report through STP every time you pay.
Catches people out: Employment records have to be kept for seven years, which is longer than the five years for your tax records.
Workers compensation
State based, compulsory once you employ anyone, and it does not cover you.
There is no national workers compensation scheme for private employers. Every state and territory runs its own, with its own rules and its own authority.
It is compulsory the moment you employ someone, and you get it from an authorised insurer in your state.
It does not cover you, the sole trader, for your own injuries. Cover for yourself is income protection or personal accident insurance, which is a different product entirely.
Catches people out: Some states treat certain subcontractors as your workers whether you call them that or not. If you are putting on a subbie, check with your state authority first.
When you are ready to take the first job
Once the licence is sorted, you need to look like you have been doing this for years: a website people can book from, and quotes and invoices with your logo that go out the same day you finish. That part is us.
We are not accountants, lawyers or insurance brokers, and none of this is advice. It is what the regulators and the ATO publish, gathered in one place with links to the source, so you know what to go and ask about. Rules and fees change, so check with the authority before you act on anything here. Government fees shown are for the 2026-27 year and are indexed every 1 July.