The Complete Accounting & Tax Guide for QLD Builders

1. Your licence has a financial engine

Queensland is unique: here, your right to carry out building work above $3,300 depends not just on your trade competence but on your balance sheet. Every QBCC contractor licence carries Minimum Financial Requirements, and they rest on three numbers:

• Maximum revenue – the most you are allowed to turn over in a year, set by your financial category
• Net Tangible Assets (NTA) – the minimum real capital that must back the business at all times
• Current ratio – at least $1 of current assets for every $1 of current liabilities, proving you can pay your bills as they fall due

Fall short on any of the three and the problem is not a fine – it is the licence itself, and with it every contract you currently have on foot. That is why construction accounting in Queensland is not just about tax: every significant financial decision, from buying a ute to paying a dividend, should be checked against these tests before it happens.

Two details worth knowing precisely. First, “revenue” for QBCC purposes means the licensee entity’s whole turnover – not just the building portion. Second, QBCC tolerates exceeding your maximum revenue by up to 10% in a financial year; beyond that you must report it, and in practice you need the next category. Treat the 10% as a shock absorber for a job that ran over, not a planning tool.

Source: QBCC Minimum Financial Requirements. Within each category the exact NTA you must hold scales with your actual maximum revenue – the table shows the band, and we calculate your precise figure as part of any engagement.

The two self-certifying categories (SC1 and SC2) cover most one-person trade businesses: you declare your own compliance and no accountant’s report is needed for the licence. From category 1 upward – $800,000 of revenue and beyond – an MFR report prepared by an independent qualified accountant enters the picture. You can locate yourself in the table in under a minute with the MFR category calculator.

2. Net Tangible Assets – the number that matters most

NTA is the heart of the MFR system, and it is not the equity figure your balance sheet shows. The calculation is:

NTA = total assets − intangible assets − disallowed assets − total liabilities

The disallowed list is where builders get caught. QBCC strips out anything it does not consider reliable backing for a building business: goodwill and other intangibles, formation and borrowing costs, many loans to directors and related entities, undocumented advances, and assets the business could never actually call on. The most common failure we see is a healthy-looking company gutted by a director loan account – money drawn out during the year that the accountant books as an asset (“the director owes it back”) and QBCC promptly disallows.

A quick illustration. A builder’s balance sheet shows $600,000 of equity – comfortably above the $156,000 their category 1 licence needs at full revenue. But $120,000 of that is goodwill from buying a competitor, and $310,000 is a director loan account built up from years of drawings. Allowable NTA: $170,000. Still passing – but with $14,000 of headroom instead of $444,000, and one more year of drawings from breach. That builder needs a dividend strategy now, not a shock in December.

Run your own numbers against the disallowed assets checklist, and see a full repair sequence in the worked example.

3. The reporting calendar – who lodges what, and when

Three habits keep the calendar painless. Lodge early in the window – August lodgers have four months to fix anything that surfaces; December lodgers have days. Watch the NTA-drop rule – a fall of more than 30% (20% for categories 4-7) from your last accepted position must be reported with a new MFR report, even between annual lodgements. And never simply skip a lodgement – non-reporting is one of the fastest routes to licence suspension QBCC has.

It pays to understand the enforcement ladder, because it moves faster than people expect: information requests, licence conditions, audit, suspension, cancellation – with your licence status visible on QBCC’s public register the whole way. Suspension mid-project means you cannot lawfully continue contracted building work. Every rung is avoidable with early, honest engagement; the licensees who get hurt are the ones who go quiet.

4. Trust accounts – where the rollout actually stands

Project trust accounts (PTAs) were designed to quarantine progress payments so money owed to subcontractors cannot be spent propping up the head contractor. The framework currently applies to eligible Queensland Government contracts of $1 million or more and private sector, local government and government-owned-corporation contracts of $10 million or more. The planned expansion to smaller private contracts was paused on 31 January 2025, pending the Queensland Productivity Commission’s review of the industry’s regulatory settings – so no new rollout dates currently exist.

If you head-contract inside those brackets, the obligations are live and strict: a separate trust account per eligible project, subcontractor payments flowing through it, retention trust rules where you hold retentions, and record-keeping that will be examined the moment anything goes wrong. Trust accounting is closer to what solicitors and real estate agents do than to ordinary bookkeeping – separate ledgers, strict timing, reconciliation discipline – and misuse of trust money carries personal consequences, not just corporate ones. If you are below the thresholds, the practical advice is simpler: build clean job-level accounting now, so that if the rollout resumes you are ready rather than scrambling.

5. Tax essentials for builders

Structure: the foundation decision

Sole trader is simple and cheap but leaves your house behind every contract you sign. A company caps tax at the corporate rate and contains liability, but brings Division 7A discipline on drawings – which, as we saw above, is also a QBCC issue. Trusts add flexibility for distributing profit across a family but complicate the QBCC picture, because the licence, the assets and the income need to sit in the right places relative to each other. There is no universal answer; there is a right answer for your size, risk and family situation, and it changes as you grow. The structure that suited a $200k sole trader is almost never right for a $2m builder. And one more thing a generalist accountant may not mention: the QBCC takes a dim view of trust structures, and the 2026 Budget changes have moved the goalposts again – your structure now has to satisfy the ATO, the QBCC and your asset-protection goals all at once. We cover the whole topic – trusts, the two-company goodwill structure, deeds of covenant – in Structuring Your Business for QBCC.

GST, progress claims and retentions

Builders live on progress claims, and GST timing follows your accounting basis. On a cash basis you account for GST when money arrives; on accruals, when the invoice is issued – and for claims that get certified at a different amount than invoiced, the paperwork matters. Retentions deserve special care: GST and income tax treatment depends on when the retention becomes contractually payable, not when you wish it would. Getting these settings right once beats unpicking them across three BAS periods later. And if cashflow ever puts you behind with the ATO, act early – payment plans negotiated proactively are routine business; enforcement after months of silence is not.

TPAR – the report that means the ATO already knows

Every business in building and construction that pays contractors must lodge a Taxable Payments Annual Report by 28 August each year, listing every subbie paid and how much. Head contractors report payments to you; you report payments to your subbies. The practical consequence: contractor income is fully visible to the ATO’s data-matching, so the old “cashie” mentality is not a tax strategy, it is an audit flag. The flip side: your own TPAR obligations need clean contractor records – ABNs, addresses, totals – which is another argument for proper bookkeeping.

Subcontractor vs employee – four regimes, one mistake

Are your guys subbies or employees? An ABN and an invoice do not settle that question. The law looks at control, delegation, tools, risk and whether the person is genuinely running their own enterprise. Get it wrong and the same misclassification bills you four ways: superannuation (often owed even to genuine contractors paid mainly for their labour), PAYG withholding, payroll tax (Queensland’s contractor provisions reach further than most builders assume once you pass the threshold), and WorkCover (whose definition of “worker” is broader than the tax one). The fix is an annual review of every regular arrangement – boring, fifteen minutes each, and vastly cheaper than the five-figure assessments that arrive otherwise.

Vehicles, tools and equipment

The $20,000 instant asset write-off lets eligible small businesses deduct most tools and small plant immediately – per asset, so three $15,000 items all qualify. The asset must be in use by 30 June, not just ordered. Utes and vans with a payload over one tonne escape the car depreciation cost limit, but dual cabs sit in a grey zone – check the payload specs, not the marketing. Private use of company vehicles has FBT consequences that the “it’s a ute, mate” folklore does not actually cover. And every financed purchase adds a liability that flows into your QBCC current ratio – the tax deduction and the licence test are two sides of the same transaction.

Super – on time, every time, including for some subbies

Super guarantee sits at 12% and is only deductible when it is received by the fund. Late super attracts the super guarantee charge – non-deductible, with interest and penalties – and is one of the most unforgiving regimes in the tax system. Remember it can be owed on labour-only contractors as well as employees.

6. Growing through the categories

Growth in this industry is lumpy: one tender can double your revenue requirement overnight. Moving up a category needs three things planned together, in order:

1. The capital. The higher category’s NTA minimum has to come from somewhere – retained profits left in the business, a documented capital injection, or restructured debt. This takes the longest, so it starts first.
2. The clean balance date. The MFR report needs recent statements with the repairs already inside them – loans cleared, capital landed, documents signed.
3. The timing. The upgrade must be approved before the revenue is earned. QBCC treats exceeded maximum revenue as a compliance failure, not an administrative oversight.

Done in that order, an upgrade is routine – we run several every year. Done in reverse, it is expensive and stressful. The rule of thumb: start the conversation one full quarter before you need the capacity. The MFR reports page covers the mechanics in detail.

7. The five mistakes we see most often

1. Treating drawings as free money. Director loan accounts quietly destroy NTA and create Division 7A problems – the same dollars, two regulators.
2. Leaving annual reporting until December. The window opens in August for a reason; use the runway.
3. Winning the job before checking the licence. Maximum revenue is a ceiling, not a suggestion – check it before you tender, not after you win.
4. Pricing from last year’s costs. Material and labour inflation eats margin silently; rebuild your rates at least annually.
5. No job-level numbers. If you cannot say which jobs made money, you are managing by vibe – and the vibe is usually wrong by exactly the amount of your worst job.