When you work as an employee, your employer handles tax withholding. As a sole trader with an ABN, that falls to you. The upside is that you also have access to deductions employees can’t claim — equipment, mileage, screening checks, professional subscriptions, and more. Getting the first year right as a sole trader is the hardest part. This guide covers the main obligations and deductions for independent NDIS support workers operating in Australia.
Your status as a sole trader
Operating as a sole trader is the simplest business structure in Australia. You don’t set up a company — you trade under your own name (or a registered business name) using your ABN. What that means in practice:
- You lodge a personal tax return each year, which includes a Business and Professional Items schedule for your sole trader income and expenses
- No employer withholds PAYG tax on your behalf — you’re responsible for setting aside enough to cover your annual tax liability
- You are personally liable for any business debts
- If you also have an employer (for example, you work part-time for an agency), that employment income sits alongside your sole trader income on the same return
The tax year runs from 1 July to 30 June. Tax returns are due by 31 October if you lodge yourself (via myTax at my.gov.au), or later if you use a registered tax agent. If this is your first year as a sole trader, using a tax agent is strongly recommended — their fee is itself tax-deductible.
PAYG Instalments are quarterly prepayments toward your expected tax bill, administered by the ATO. If your total tax liability in the previous year exceeded $1,000 and you have business income, the ATO will enrol you automatically. You’ll receive a letter with the instalment amount. This system prevents a large lump-sum bill at tax time — set aside roughly 25–30% of each payment you receive from the start, so you’re not caught short.
GST — do you need to register?
You must register for GST if your annual turnover reaches $75,000 or more. Below that threshold, registration is optional.
Here is the thing most guides miss: even if you do register for GST, NDIS disability support services are GST-free under Division 38-B of the A New Tax System (Goods and Services Tax) Act 1999. This means you do not charge GST on your support invoices — and you also cannot claim GST input tax credits on expenses that relate to those GST-free services. For most sole traders delivering primarily NDIS disability supports, GST registration below the threshold provides limited benefit.
If you cross the $75,000 threshold, you must register within 21 days. Once registered, you lodge Business Activity Statements (BAS) — either monthly or quarterly — and remit any GST collected to the ATO. Most of your NDIS income will still show $0 GST, but you must lodge regardless.
For more on how GST appears on your invoices, see the NDIS invoicing guide.
What you can claim
Deductions reduce your taxable income — they’re expenses you incurred to earn your NDIS income. The key rule is that an expense must be directly related to earning that income and you must have records to support it.
Mobile phone
If you use your phone for work — taking participant calls, logging shifts in an app, accessing support plans, contacting plan managers — you can claim the work-related portion of your bill and handset cost. The ATO expects you to keep records of how you use the phone. A typical approach is to track a representative four-week period and use that to calculate your work percentage, then apply it to your annual costs.
Vehicle expenses
Travel between clients during the same working day is deductible. Travel from your home to your first client (and back from your last) is generally treated as a private commute and is not deductible.
You can choose between two methods:
Cents per kilometre method: Multiply your work kilometres by the ATO’s published rate (88 cents per kilometre for 2024–25). Simple, no logbook required, but capped at 5,000 km per year.
Logbook method: Record every business journey for a 12-week continuous period. The logbook establishes your work percentage, which is then applied to all vehicle running costs (fuel, servicing, registration, insurance, depreciation). More work upfront, but potentially a larger deduction if your work use is high and you drive frequently between clients.
Professional subscriptions
Subscriptions and memberships directly related to your work are deductible. This includes disability sector memberships and tools you use to run your support work — including practice management apps like Timeline.
Training and professional development
Courses, workshops, and training that directly relate to your existing work as a support worker are deductible. This includes manual handling training, behaviour support, and condition-specific training for participants you currently support. General courses undertaken before you started working, or to enter a different field, are not deductible.
Worker screening checks
The fees for your NDIS Worker Screening Check (NWSC), Working With Children Check (WWCC), and National Police Check are deductible — they’re directly required to perform your work. For a state-by-state breakdown of these checks, see the NDIS worker screening requirements guide.
Uniforms and protective equipment
Branded uniforms (with your business name or logo) and protective equipment — gloves, masks, gowns — used during shifts are deductible. Plain clothing that could be worn outside work is not, regardless of how you use it.
Home office
If you have a dedicated area of your home used exclusively for work — writing notes, managing invoices, preparing support plans — you may be able to claim a portion of your home running costs. The ATO’s fixed rate method (currently 70 cents per hour of documented work-from-home time) is the simplest approach. A spare room used only for work may allow a floor-area apportionment of rent or mortgage interest, but this is more complex and is worth discussing with a tax agent.
Accounting and tax agent fees
100% deductible. This includes bookkeeper fees, tax return preparation, and any financial software you use purely for your business accounts.
Income protection insurance
If your income protection policy covers loss of income due to illness or injury (rather than total permanent disability or trauma), the premiums are deductible. TPD and trauma insurance premiums are generally not. If your policy covers a mix, your insurer or a tax agent can help you identify the deductible portion.
What you cannot claim
Normal living expenses — food, personal clothing, rent on your primary home, personal internet use.
Commuting — driving from home to your first client is treated as a private trip, even if your home is far from that client’s location. The exception is if your home is also a genuine base of operations and you carry equipment that makes it impractical to travel by public transport.
Expenses reimbursed by a participant — if a participant pays you back for groceries or transport you purchased on their behalf, that money is not your income and the expense is not your deduction. It’s a pass-through.
Fines and penalties.
Private use of shared assets — if you use a laptop for both work and personal browsing, only the work portion is deductible. You need records to support the split.
Records you must keep
The ATO requires you to keep tax records for 5 years from the date you lodge the relevant return. What counts:
- All invoices you’ve issued
- Receipts for every expense you’ve claimed
- Bank statements showing income received and expenses paid
- Kilometre log or logbook records for vehicle claims
- Any contracts or service agreements with plan managers
- Phone use records if claiming a work portion
Digital records — scanned receipts, PDF invoices, bank exports — are acceptable. The key is that the records are legible and accessible if the ATO asks.
End-of-year checklist
A practical list to work through before lodging your return:
- Confirm all invoices are sent and reconciled — check your invoice records against payments received
- Export an income summary — total NDIS income received for the year, broken down by client if possible
- Compile all expense receipts — organised by category matches the deductions you’ll claim
- Note any unpaid invoices — income is generally recognised when you receive it (cash basis for most sole traders), not when you invoice
- Check your PAYG Instalment position — did the quarterly payments you’ve made roughly cover your expected liability, or is there a gap?
- Superannuation — no one is paying super for you as a sole trader. The concessional contribution cap for 2024–25 is $30,000 (including any employer contributions if you also have employment income). Personal concessional contributions are tax-deductible if you lodge a Notice of Intent to Claim with your super fund before you lodge your tax return
- Consider whether you had a business loss — if your deductions exceeded your income, you may be able to offset that loss against other income (subject to the ATO’s non-commercial loss rules, which can be complex)
- Book a tax agent if this is your first year — their fee is deductible, and they’re familiar with sole trader obligations that can catch first-timers out