Tax deductions and accounting for builders.
You can generally claim your licensing, insurances, site vehicle, tools and job management software against your building income, provided each one relates to earning it and you keep proper records. This guide covers what builders typically claim, how QBCC and TPAR obligations fit into your accounting, and how progress claims and retention affect your GST and cashflow. We're Brisbane based and work with building businesses across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What builders can claim.
The deductions that matter most in your trade, in rough order of value. Every one still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
QBCC licensing and annual reporting costs
Your QBCC contractor licence fees, and the accounting cost of preparing your annual minimum financial requirements report, are generally deductible as costs of holding your licence.
Site vehicle running costs
Your ute or work vehicle used to move between sites, suppliers and meetings is generally deductible for its business-use portion under the logbook or cents-per-kilometre method.
Job management and estimating software
Subscriptions to job costing, estimating or progress claim software used to run your building projects are generally deductible as ongoing business expenses.
Public liability and contract works insurance
Premiums for public liability, contract works and professional indemnity insurance tied to your building work are generally deductible.
Site safety and PPE
Hard hats, hi-vis, steel-cap boots and other site safety gear required across your projects are generally deductible.
Tools and site equipment
Power tools, measuring equipment and other gear you supply personally on top of what's covered by subcontractors is generally deductible, either upfront or depreciated depending on cost.
Office and admin costs
If you run quoting, project admin and QBCC reporting prep from a home office or a small office space, a portion of the running costs is generally deductible.
Accounting and bookkeeping fees
Fees for the accounting, bookkeeping and QBCC reporting support that keeps your licence and BAS obligations on track are generally deductible.
Marketing and quoting costs
Website, signage and lead generation costs used to win new building work are generally deductible.
Training and licence-related CPD
Courses required to maintain your QBCC licence or build genuine skills relevant to running building projects are generally deductible.
GST and BAS, without the headaches.
Building work is typically billed through progress claims across the life of a project, and GST is generally payable on each claim as it's raised, not just at final handover. That makes it important to plan your BAS around the project's billing schedule rather than being surprised by a GST bill on a claim you haven't fully been paid for yet, especially where retention is held back until the defects liability period ends.
If you buy and sell land or build to sell rather than build to a client's order, there are specific GST rules around new residential premises and the margin scheme that can significantly change what you owe - this is genuinely worth a conversation before you commit to a project, not after settlement.
Almost every builder pays subcontractors, which means a Taxable Payments Annual Report is close to unavoidable. We prepare this from your Xero data so your subbie payments are already sitting in the right place when it's due each August, rather than being reconstructed from a year of invoices.
Sole trader, company or trust?
Building carries real financial and legal risk: defects liability periods, warranty claims and QBCC's minimum financial requirements around net tangible assets by licence category all point most builders toward a company structure, often with a trust arrangement above it, well before the equivalent stage in lower-risk trades. QBCC's licence categories set out minimum financial requirements you need to meet regardless of structure, so we build your accounting around keeping those requirements met as your turnover grows, not just around minimising tax.
Run the jobs, we run the numbers.
Running progress claims, retention and subcontractor payments cleanly is the difference between a building business that knows its margin and one that finds out at tax time. We connect job costing and progress claim software to Xero so every draw against a project reconciles properly, and set up your QBCC reporting workflow so the numbers you need each year are already there rather than being rebuilt from scratch.
Frequently asked questions.
Can I claim my ute or work vehicle as a builder?
Generally yes, for the business-use portion, under either the logbook or cents-per-kilometre method. Given how much time builders spend moving between sites and suppliers, a properly kept logbook often supports a larger claim than the cents-per-kilometre method.
What is QBCC's minimum financial requirements reporting and how does it affect my accounting?
QBCC requires licensees to meet minimum financial requirements based on their licence category and to report annually. We prepare and lodge this alongside your regular accounting, and structure your business with those requirements in mind as your revenue grows, so a good year doesn't accidentally put your licence category at risk.
Do I need to lodge a Taxable Payments Annual Report?
If you pay subcontractors in the building and construction industry, which almost every builder does, you need to lodge a TPAR each year. We build this straight out of your Xero data.
Should my building business be a company, or a company and trust?
Most builders end up needing more asset protection and a cleaner separation of risk than a sole trader structure gives, particularly once you're carrying warranty exposure across multiple projects. A company, sometimes with a trust holding it, is common, but the right setup depends on your licence category, growth plans and how you want profits to flow. We'll model it properly rather than default to a template.
How does GST work on progress claims and retention?
GST is generally payable as each progress claim is raised, even on the portion held back as retention, which can create a cashflow gap between when you pay GST and when retention is actually released. We help clients plan their BAS timing around this so it doesn't catch them out.
Talk to an accountant who knows builder businesses.
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