NDIS tax deductions: a practical guide for support workers

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. In practice that means:

• 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're 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 (through ATO online services via myGov), or later if you use a registered tax agent. If this is your first year as a sole trader, using a tax agent is well worth it — their fee is itself deductible.

PAYG Instalments are quarterly prepayments toward your expected tax bill, administered by the ATO. If your tax liability in the previous year exceeded a set threshold and you have business income, the ATO enrols you automatically and sends a letter with the instalment amount. This prevents a large lump-sum bill at tax time — setting aside roughly 25–30% of each payment you receive from the start helps you avoid being 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's the part 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. So you don't charge GST on your support invoices — and you also can't claim GST input tax credits on expenses that relate to those GST-free services. For most sole traders delivering primarily NDIS disability supports, registering below the threshold offers limited benefit.

If you cross the $75,000 threshold, you must register within 21 days. Once registered, you lodge Business Activity Statements (BAS) — monthly or quarterly — through ATO online services (via myGov) or a registered tax agent, 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 records of how you use the phone. A common approach is to track a representative four-week period and use that to calculate your work percentage, then apply it to your annual costs. Note: if you use the home-office fixed-rate method, phone costs are bundled into that rate and cannot be claimed separately — see the home office section below.

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 isn't 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 the 2024–25 and 2025–26 income years (capped at 5,000 work km). Simple, no logbook required. Confirm the current rate at ato.gov.au, as it's reviewed each income year.

Logbook method: Record every business journey for a continuous 12-week period. The logbook establishes your work percentage, which you then apply 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 the 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. That includes manual handling training, behaviour support, and condition-specific training for participants you currently support. General courses taken 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 an area of your home used for work — writing notes, managing invoices, preparing support plans — you may be able to claim a portion of your running costs. The ATO's fixed rate method (70 cents per hour of documented work-from-home time, currently — confirm the current rate at ato.gov.au) is the simplest approach. A room used only for work may allow a floor-area apportionment of rent or mortgage interest, but that's more involved and worth discussing with a tax agent.

Note that the fixed-rate method requires a full-year record of hours worked from home — a sample or representative diary is no longer accepted. A timesheet, roster or calendar log kept throughout the year satisfies this.

The 70-cent rate already bundles electricity, internet, phone and stationery. If you use this method, you cannot claim those same items separately elsewhere in your return.

Accounting and tax agent fees

Deductible in full. This includes bookkeeper fees, tax return preparation, and 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 premiums generally aren't. If your policy covers a mix, your insurer or a tax agent can help you identify the deductible portion.

Super for sole traders — the gap no one fills

As a sole trader, no employer is paying super for you. That might feel like a problem for later, but it compounds quietly — and there are real tax advantages to acting on it now.

Voluntary contributions and the concessional cap. Personal contributions you make to super from after-tax income can be claimed as a tax deduction — meaning they're treated the same as employer contributions. These are called concessional contributions. For the 2024–25 and 2025–26 income years, the concessional cap is $30,000 (confirm the current cap at ato.gov.au). That cap includes any employer contributions you receive if you also have employment income, so check your total before contributing.

The Notice of Intent. For a personal contribution to be tax-deductible, you must lodge a Notice of Intent to Claim a Deduction with your super fund — before you lodge your tax return for that year. If you lodge your return first, you lose the deduction for that contribution. This is the most common mistake sole traders make with super. Lodge the notice early.

Your first year. You can make a personal concessional contribution and claim it in the same return as your first year of sole trader income. There's no waiting period. If you had a rough first year financially, a modest contribution still helps — and the deduction reduces your taxable income for that year.

A practical framing. Setting aside a portion of each payment you receive means super doesn't become a lump-sum scramble in June. A rough rule of thumb many sole traders use is 10–15% of each invoice — illustrative only, as the right amount depends on your goals, income stability, and existing super balance. Speaking with a financial adviser or accountant about a sustainable approach is worthwhile once your income is settled.

The super gap is real, but it's also one of the clearest places where being a sole trader gives you something an employee doesn't: the ability to choose when and how much you contribute, and to claim the deduction on your own terms.

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 where your home is also a genuine base of operations and you carry equipment that makes public transport impractical.

Expenses reimbursed by a participant — if a participant pays you back for groceries or transport you bought on their behalf, that money isn't your income and the expense isn't 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, and you need records to support the split.

Records you must keep

The ATO requires you to keep tax records for five 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 fine. The point is that they're legible and accessible if the ATO asks.

End-of-year checklist

A practical list to work through before lodging your return:

1. Confirm all invoices are sent and reconciled — check your invoice records against payments received
2. Export an income summary — total NDIS income received for the year, broken down by client if possible
3. Compile all expense receipts — organised by category so they match the deductions you'll claim
4. Note any unpaid invoices — income is generally recognised when you receive it (cash basis for most sole traders), not when you invoice
5. Check your PAYG Instalment position — did the quarterly payments roughly cover your expected liability, or is there a gap?
6. Superannuation — no one is paying super for you as a sole trader. The concessional contribution cap was $30,000 for 2024–25 (check the current cap at ato.gov.au), including any employer contributions if you also have employment income. Personal concessional contributions are deductible if you lodge a Notice of Intent to Claim with your super fund before you lodge your tax return
7. 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
8. Book a tax agent if this is your first year — their fee is deductible, and they're across the sole trader obligations that catch first-timers out