Accounting for Trades & Services in Melbourne

Why do tradespeople need more than a standard tax return?

A Melbourne plumber, electrician, or HVAC technician has a deduction profile that's fundamentally different from an office worker. Vehicle expenses, tool purchases, protective clothing, licensing fees, training costs, and home office use all create legitimate tax deductions — but only if they're correctly documented and claimed. The ATO has flagged work-related expense claims for tradespeople as a priority audit area, which means getting it right matters more than ever.

Beyond individual returns, many tradespeople reach a point where operating as a sole trader costs them significantly more tax than a company or trust structure. Knowing when to make that transition — and setting it up correctly — is where specialist advice pays for itself many times over.

How does Centric help Melbourne trade businesses?

For sole traders and small teams, we start with a comprehensive deduction review. Most tradespeople we onboard have been missing legitimate claims — the logbook method for vehicle expenses alone often adds thousands to their refund compared to the cents-per-kilometre method they've been using.

For growing trade businesses with employees or subcontractors, we set up job costing so you can see the true profit on every job — not just the difference between the quote and material costs, but the fully loaded cost including labour, vehicle running costs, and overhead allocation. This is the information you need to price accurately and identify which types of work are actually worth pursuing.

What is the difference between a contractor and an employee for a trade business?

This is one of the most consequential classifications in Australian tax and employment law. If you engage workers as contractors but the ATO or Fair Work determines they're actually employees, you're liable for unpaid superannuation, PAYG withholding, workers' compensation premiums, and potential Fair Work penalties — often backdated for years.

The distinction depends on control, independence, equipment provision, and the nature of the engagement. We review your contractor arrangements against ATO and Fair Work guidelines, and restructure any that carry risk. For legitimate contractor relationships, we ensure your TPAR reporting is correct and your contracts reflect the actual working arrangement.

What vehicle and tool deductions can Melbourne tradespeople claim?

Work vehicles are typically the largest deduction for tradespeople. The logbook method — which requires a 12-week logbook maintained once every five years — allows you to claim the business-use percentage of all running costs including fuel, insurance, registration, servicing, and depreciation. For a tradesperson using their vehicle 80% for work, this consistently produces a larger deduction than the 85 cents per kilometre flat rate.

Tools and equipment under the instant asset write-off threshold can be deducted immediately. For items above the threshold, we apply the correct depreciation schedule. Replacement tools, protective equipment, and specialist workwear are all deductible — but personal items like plain clothing and sunglasses are not, and the ATO specifically targets these in trade worker audits.