In short: Tradies should use cloud accounting software, keep a separate business bank account, watch cash flow weekly, plan tax before 30 June, claim vehicle costs with a logbook or the cents-per-kilometre method (88 cents a kilometre, up to 5,000 km, for 2025–26), keep records of every tool and equipment purchase, and get an accountant to handle BAS, TPAR and Payday Super, which has applied since 1 July 2026.

Why is accounting important for tradies?

Any business owner must keep track of their finances in order to maintain ongoing financial health and the success of their business. Accounting is no less important for tradies, particularly in an economic climate of rising supply costs and tighter cash flow pressures.

Effective accounting and bookkeeping practices will help you stay organised, track your performance and limit your tax liabilities throughout the year.

This blog will provide a guide to accounting for tradies, including our best tips for accounting and bookkeeping in the construction industry.

1. Utilise online accounting software

The first and most important step of accounting for a tradie is to have an effective system to record and track your financial records. Keeping accurate financial records has many crucial benefits, including maximising your deductions at tax time, managing your cash flow and tracking the performance of your business.

The easiest way to do this is through online accounting software. Platforms like the one we use, Xero, have made it far easier for business owners to stay on top of their accounting and simplify tasks such as invoicing, tracking expenses, and calculating profit and loss. These programs can be especially helpful for those not comfortable with spreadsheets or those looking for an automated solution.

2. Have a separate bank account for the business

Separating your business and personal bank accounts is crucial for maintaining accountability and organisation of your finances.

Not only will this simplify the process for your accountant during tax season, but it will also aid in sticking to your budget and keeping detailed records of any tax-deductible expenses.

One of the most common mistakes that we see tradies make is blending their business and personal finances, making it difficult to evaluate the performance of your business and properly manage cash flow. To ensure that your business and personal receipts remain distinct, we recommend using a business card for work-related expenses and maintaining accurate logs when using personal items for work.

3. Pay close attention to your cash flow

The biggest threat facing small businesses is poor cash flow management. This is particularly relevant for businesses in the construction industry which can be subject to fluctuating supply costs and payment delays.

Construction regularly records more company insolvencies than any other industry, an important reminder of the necessity to plan, organise and monitor your cash flow constantly.

Some of the best ways to maintain a healthy cash flow include creating and sticking to an effective budget, planning your accounts payable and receivable, as well as seeking the help of a qualified business accountant.

Visit this blog for our best tips on effective cash flow management.

4. Start tax planning

Tax planning is one of the most important roles of an accountant and one of the best ways you can limit your overall costs and liabilities. Implementing a few tax planning strategies before the end of the financial year can go a long way towards minimising your tax bill and boosting your cash flow.

For tradies, a common strategy is to bring forward purchases of supplies and equipment before 30 June. Small businesses with aggregated turnover under $10 million can immediately deduct eligible assets costing less than $20,000 each under the instant asset write-off. Delaying invoices only moves income into the next year if your business reports on a cash basis, so check with your accountant first.

We also strongly recommend setting aside appropriate funds every paycheck to cover upcoming tax payments and avoid being caught by a large tax bill. An efficient and stress-free method of budgeting for taxes is to consult with an accountant; they can assist you in determining and planning your future tax instalments months in advance.

5. Keep track of vehicle expenses

As a tradie, you’ll likely use a vehicle while carrying out your day-to-day business operations. This will often involve driving substantial distances as you travel between sites, clients and suppliers.

When looking to make the most out of the tax deductions available for your vehicle, it pays to stay organised.

If you use your car extensively for work, keeping a logbook is likely the most effective method for maximising your vehicle tax deductions. The logbook must cover at least 12 continuous weeks that reflect your normal travel. It can be kept on paper or in an app, and it stays valid for up to five years. To maximise your vehicle deductions, you’ll need to include information such as the distance your car travels, what percentage of this travel is for business use and any other vehicle-related expenses you incur during this period.

The cents-per-kilometre method is also available as an alternative to keeping a logbook. This involves calculating the kilometres you travelled as part of your job and claiming a set rate for each one: 88 cents per kilometre for 2025–26. The method is capped at 5,000 business kilometres per car (a $4,400 deduction), so tradies who drive a lot may miss out. Utes and vans designed to carry a tonne or more are not "cars" under these rules: you claim their actual costs based on your business use.

Other vehicle expenses you should record include:

• Petrol

• Repairs & maintenance

• Insurance

• Vehicle registration

• Vehicle depreciation

6. Keep a record of all equipment purchases

Make sure you record any purchase directly related to earning your income.

As a tradie, this may include purchases of items such as protective clothing, tools, permits, self-education and vehicle expenses.

Whilst online accounting software like Xero will make it easy to record and store receipts for these transactions, a basic spreadsheet will also be able to do the job for you.

7. Hire an accountant

As your workload grows and your finances get more complex, managing your bookkeeping will become an increasingly bigger burden on your work life. Additionally, effective bookkeeping practices can help cut tax costs drastically, as well as maximise profit and minimise expenses.

Hiring a trusted accountant or bookkeeper will help you manage the financial side of your business and give you expert advice when you need it most.

They can also keep you on top of the rules that most often catch tradies out: lodging BAS on time, the Taxable Payments Annual Report (TPAR), due by 28 August if you pay contractors for building and construction services, and Payday Super. Since 1 July 2026, employers must pay super at the same time as wages, and it must reach the employee’s fund within seven business days of payday.

For help with tax compliance, bookkeeping and tax planning, talk to our tradie accountants.

Frequently asked questions

What is the cents per kilometre rate for 2025–26?

88 cents per kilometre, for up to 5,000 business kilometres per car. Above that, or for a ute or van that carries a tonne or more, use a logbook or actual costs instead.

Can tradies claim tools and equipment?

Yes, if you use them to earn your income. Small businesses with turnover under $10 million can immediately deduct eligible assets costing under $20,000 each; for an employee, items over $300 are depreciated over their life.

Do I need to lodge a TPAR?

If your business provides building and construction services and pays contractors for them, you generally need to lodge a Taxable Payments Annual Report by 28 August each year.

Last updated: 26 October 2026.

General information only, based on the rules at the date above. It does not take into account your circumstances, so speak to your accountant before acting.