How to Start a Trade Business in Australia

You've been on the tools for years. You know the job. You've watched the bloke you work for quote $8,000 for a job you know takes two days. And you've done the maths in the ute on the drive home more than once.

This guide is the honest version of what happens next.

Not the shiny one where a consultant tells you to trademark your name and drop $5k on a website before your first invoice. The real one — what you actually need to do, in what order, to be legally trading for under $600 in under a day.

Before you hand in your notice — what to sort first

The biggest mistake most tradies make isn't quitting too late. It's quitting too early, before they've built anything underneath them.

A week after you've handed in your notice is a terrible time to discover you forgot to check your trade licence is current, that your employment contract has a 12-month restraint clause, or that public liability quotes take three days to come back.

Before anything else:

• Check your trade licence is current for the state you work in. No licence = no invoicing, full stop.
• Read your employment contract for restraint-of-trade clauses. If there's one, a lawyer's hour is cheaper than a lawsuit.
• Work out your financial floor — three months of personal expenses saved, minimum. Your first invoice might take six weeks to get paid.
• Tell people you're going out on your own. Not on LinkedIn. To the people you've done jobs for, the suppliers who know your work, and the sparkies and chippies you cross paths with on site.

If you want a proper staged plan for transitioning while still employed, we cover it in detail here.

Step 1 — Get the legal basics in place

The legal setup for a sole trader in Australia is genuinely simpler than they make it sound. You can do the whole thing in an afternoon.

The short version:

1. Register for an ABN at abr.gov.au — free, 15 minutes
2. Register a business name if you're trading as anything other than your own name — $44/yr via ASIC
3. Confirm your trade licence is current for your state
4. Get public liability insurance before your first job
5. Open a separate bank account for the business — you'll thank yourself at tax time
6. Register for GST only if you expect to earn over $75,000 in your first year

That's the minimum. There's no sixth secret step. The full checklist with state-by-state licensing notes is in our minimum setup guide.

One call-out before you keep going: you don't need a company structure yet. Almost every tradie starting out should be a sole trader. We explain why — and the three situations where a company actually makes sense — in our sole trader vs company guide.

Step 2 — Work out what to charge

This is the step most tradies get catastrophically wrong, and it costs them for years.

Here's the thing no one told you when you were on wages: the $45/hr your boss was paying you isn't what you need to charge. Not even close.

When you work for yourself, you pay for:

• Your own superannuation (12% from July 2025)
• Public liability and income protection insurance
• Tools, ute, fuel, phone, admin software
• The hours you don't get paid for — quoting, travel, invoicing, chasing payments
• A tax buffer the ATO will come for at BAS time

Most tradies charge too little because they benchmark against their old hourly wage. The actual floor — built from first principles — sits closer to $90–$130/hr for most trades, depending on the work.

We build the formula from scratch in our hourly rate guide so you can work out your own floor rather than guessing.

Step 3 — Protect yourself with the right insurance

One injury on a job site, one burst pipe in a renovation, one tool theft from the ute — any of these can sink a business that isn't covered.

Public liability insurance is the non-negotiable one. Most head contractors and builders will require at least $10m cover before they'll put you on site. Without it, you literally can't work for them.

Beyond public liability, there are four other insurances worth knowing about:

• Tools cover — for theft or damage to your gear
• Income protection — the one that pays your mortgage if you can't work
• Professional indemnity — required for some trades in some states
• Workers' compensation — mandatory the day you put someone on the books

The full breakdown of what each one does, which trades need which, and what to watch for in the fine print is in our insurance guide. No insurer affiliate links. Just what you actually need.

Step 4 — Understand your tax obligations from day one

The ATO isn't scary if you set yourself up properly on day one. It gets scary when you ignore it for eight months and end up with a $15,000 bill you haven't put aside for.

Three things to know:

1. You're responsible for your own income tax. Put 25–30% of every invoice into a separate account the day it lands.
2. GST kicks in at $75,000 turnover. Once you cross it, you charge 10% GST on every invoice and pay it to the ATO quarterly via BAS.
3. You can claim legitimate business expenses — tools, ute, fuel, insurance, phone, admin software, protective gear, some home office costs.

The deductions most tradies miss (and the ones that get tradies into trouble with the ATO) are in our tax deductions guide.

Step 5 — Get your first jobs without paying for leads

This is where most new tradies panic and make the expensive mistakes: paying hipages $300 to chase spam enquiries, or dropping $2,000 on a website before they've invoiced a single job.

The honest answer: your first three months of work should come from people who already know you.

• Tell your network — suppliers, former workmates, family, neighbours, the blokes at the coffee van. Everyone.
• Claim your Google Business Profile today — before your first job. It's free and it takes 20 minutes.
• Get your first review before your first job. Ask a past customer or colleague who's seen your work.

The full playbook — including the suburb strategy that builds momentum in your target area and what to say when you're quoting for the first time — is in our first 3 months guide.

Step 6 — Get found online

Once the first jobs are done and the reviews start coming in, your next lever is Google.

Most tradies' phones don't ring from Google because Google doesn't know they exist. Not because their work isn't good — because their website (if they have one) and their Google Business Profile tell Google almost nothing specific about what they do or where.

Fixing that is easier than most agencies want you to believe. The whole picture — website, Google Business Profile, directories, reviews, suburb pages, AI search — is covered in our websites for tradies pillar. If you read one piece on this, read that one.

What you don't need yet (and what people will try to sell you)

Between the day you decide to go out on your own and the day you invoice your first job, your inbox will fill up with people trying to sell you things you don't need.

Some of the worst offenders:

• A $2,000+ website before you've invoiced a single job
• A trademark for a local trade name you might not even keep in a year
• A marketing agency retainer when your Google Business Profile isn't claimed
• "Business coaching" at $500/session when you could be on the tools

You don't need any of it yet. The full list of what can wait (and what you genuinely never need) is in our guide to what you don't need starting a trade business. Read it before you spend a dollar on anything that isn't tools, insurance, or the ATO.

The two questions most tradies don't ask until it's too late

After hundreds of conversations with tradies who went out on their own, the same two blind spots keep showing up. Worth asking yourself now rather than in year two.

"What happens if I get injured tomorrow?"

When you were on wages, your employer carried workers' comp and sick leave. As a sole trader, that disappears the day you start. Income protection insurance is cheap when you're healthy and impossible to get once you've got a pre-existing injury. Get a quote before you need it.

"What do I do when a customer doesn't pay?"

Late payment is the single biggest cash-flow killer for new trade businesses. Builders stretch 60, 90, even 120 days. Individual customers ghost. You need payment terms on every invoice, a follow-up sequence, and knowledge of which tribunal to use in your state when it goes bad. Our getting paid guide covers all of it.

Your first 30 days — the short version

If you read nothing else, this is the order:

1. Check your trade licence is current
2. Register your ABN (free, 15 min)
3. Register your business name (if needed)
4. Get public liability insurance quoted
5. Open a separate business bank account
6. Claim your Google Business Profile
7. Tell everyone you know
8. Take the first job. Get it done properly. Ask for the review.

The whole thing is less complicated than the people who sell services to new tradies need you to believe. Which is exactly why they try so hard to make it sound complicated.

You've got the skill. That's the hard part. The rest is paperwork and process.