Bookkeeping & Payroll for Tradies

Not necessarily. Under the Building and Construction General On-site Award 2020, tool allowance is payable to employees who provide their own tools or equipment, unless they're already being paid a daily rate that reflects tool wear and tear. The allowance varies by trade type and is indexed annually—check the current Building and Construction Award for the exact rate for your trade, as it changes each year. Check whether your site agreement or industry practice already covers tool provision before assuming allowance is due.

RDOs are paid days off that accrue under the award's hours arrangement rather than by separate agreement. Under the Building and Construction General On-site Award 2020, ordinary hours are 8 hours a day, of which 7.6 hours are paid and 0.4 of an hour accrues towards an RDO — so a full-time employee on the standard arrangement accrues one RDO in each four-week cycle. Banked RDOs must not exceed 5 at any time, and RDOs are taken by roster within each four-week cycle or by agreement with the employer (award clauses 16.2, 16.4 and 16.5, read 8 September 2026). They're paid at the employee's ordinary rate; part-time arrangements follow the award's part-time provisions. Keep a written record of how and when RDOs are taken — failing to provide or pay RDOs correctly can lead to an underpayment claim through the Fair Work Ombudsman.

You must keep records showing: full name, address, and ABN of each contractor; dates of work; amounts paid; nature of work performed; and whether GST was applied. These records must be kept for 5 years for ATO purposes and are essential for TPAR reporting. If your business provides building and construction services and pays contractors for them, those payments are reported to the ATO in the annual TPAR. Keep copies of invoices, payment receipts, and any signed contractor agreements. Fair Work may request these records if there's a dispute over employment status.

The TPAR is an annual report, due to the ATO by 28 August each year, covering the payments you made to contractors for building and construction services in the financial year just ended (1 July to 30 June). It is lodged online — through SBR-enabled software, ATO Online services for business, or your tax or BAS agent — and paper lodgement is no longer accepted. The report is only as good as the records behind it, so track each contractor's name, address, ABN and the amounts paid (including GST) as you go rather than reconstructing them in August. Late or missed lodgement can attract ATO failure-to-lodge penalties. Valont keeps the contractor records current through the year and prepares and lodges the TPAR ahead of the deadline.

Travel time to the first job of the day and from the last job back to your depot or the employee's home is generally paid at the ordinary hourly rate. Travel between jobs during the day is usually paid work time. Some on-site or site-based contracts may have different arrangements. Check your specific site agreement and the Building and Construction Award conditions. If you're unsure, document the travel time agreement in writing with the employee to avoid disputes.

The ATO uses a multi-factor test: an employee works under your control and direction, receives regular pay, gets leave entitlements, and you withhold tax. A subcontractor operates independently, sets their own hours, has their own ABN, and invoices you for work. However, even if someone has an ABN, they may still be classified as an employee if they work exclusively for you, don't hire others, or work under tight supervision. Misclassification can lead to super underpayment claims and ATO penalties. When in doubt, seek advice before engaging someone as a contractor.

Superannuation contributions are calculated as a percentage of ordinary time earnings (OTE). OTE includes the base wage and award allowances (like tool allowance) but typically excludes overtime, penalties, and bonuses. The Superannuation Guarantee rate is 12%. You must contribute to a default fund unless the employee nominates one. Under payday super (from 1 July 2026), contributions are due with each pay run and must reach the employee's fund within 7 business days of payday. Failure to pay super on time triggers the superannuation guarantee charge.

For employees with variable hours, annual leave accrual is based on a 'reasonable additional amount' above ordinary hours. The Fair Work Commission publishes guidance on reasonable accrual rates. If an employee normally works 40 hours but occasionally works 50 hours, you might accrue leave based on 42-45 hours. Personal/carer's leave is typically 10 days per year, regardless of hours worked. Always document the accrual basis in writing. When leave is taken, it's paid at the employee's ordinary rate (including shift penalties if applicable) or the rate payable had they worked.

Underpaying an employee can result in: back-pay liability (you must repay all underpaid wages with interest), Fair Work enforcement action, civil penalties per contravention (the Fair Work Ombudsman's litigation page lists the current maximums — at 8 September 2026, up to $21,840 for an individual, $109,200 for a company with fewer than 15 employees and $546,000, or three times the underpayment if greater, for a company with 15 or more, with ten-fold amounts for serious contraventions; the figures are indexed, so check the current page), reputational damage, and difficulty hiring quality staff. Since 1 January 2025, intentionally underpaying an employee can also be a criminal offence — honest mistakes are not. Underpayment claims can be lodged up to 6 years after the underpayment occurred. Even honest mistakes are your responsibility to correct. This is why award-compliant payroll is essential—it prevents costly errors and gives you confidence in your compliance.

Yes. Every state and territory runs its own workers' compensation scheme and generally requires employers to hold cover for their workers. In NSW, workers insurance is issued through icare (the NSW Nominal Insurer) and regulated by the State Insurance Regulatory Authority (SIRA) — 'WorkCover' is the old NSW name; in Victoria it is WorkCover insurance through WorkSafe Victoria; in Queensland it is WorkCover Queensland; in WA it is a policy with an approved insurer, regulated by WorkCover WA; and South Australia (ReturnToWorkSA), Tasmania (WorkSafe Tasmania), the ACT (WorkSafe ACT) and the Northern Territory (NT WorkSafe) each have their own arrangements. Whether sole traders, directors and contractors need cover depends on the state's rules. Operating without cover when it is required attracts penalties under the relevant state legislation and can leave you personally liable for an injured worker's costs — check the current requirements and penalty amounts with your state regulator. Valont can help track your team composition to ensure you maintain appropriate cover levels.