If you’re a sole trader providing NDIS services, navigating your tax obligations can feel like learning a second job. The good news? Most of your NDIS income is GST-free — but only if you do it right.
This guide breaks down everything you need to know about GST, income tax, BAS lodgment, and deductions as an NDIS support worker or independent disability provider operating as a sole trader in Australia.
1. Do NDIS Support Workers Pay GST?
This is the most common question — and the answer is: usually no, but it depends on four conditions.
Under Section 38-38 of the GST Act, NDIS services can be supplied GST-free, which means you do not add 10% GST to your invoices. However, all four of the following conditions must be met simultaneously:
- Condition 1: The participant has a current, NDIS-approved plan in effect.
- Condition 2: The support is listed as reasonable and necessary in the participant’s plan.
- Condition 3: There is a written service agreement in place between you and the participant (or their representative).
- Condition 4: The support type is listed in the GST-free Supply — NDIS Supports Determination 2021.
If even one of these conditions is missing, your service may be taxable — meaning you could owe the ATO 10% GST on your invoices, even if you never collected it.
Sole traders near the $75,000 annual turnover threshold: GST-free NDIS income still counts toward this figure. If you earn $80,000 in GST-free NDIS support, you must register for GST and lodge BAS — even though your actual GST collected is $0.
2. GST Registration: Do You Need It as an NDIS Sole Trader?
Most new NDIS support workers start below the $75,000 threshold and don’t need to register for GST immediately. But as your client base grows, this changes fast.
The $75,000 Rule
You must register for GST when your annual turnover (total income, including GST-free NDIS income) reaches or exceeds $75,000. This is a hard deadline — you have 21 days from the date you exceed this threshold to register.
What Happens When You Register?
- You must lodge a Business Activity Statement (BAS) — either monthly, quarterly, or annually.
- For your NDIS clients, you still charge $0 GST (because their services are GST-free).
- For any non-NDIS private clients (e.g., aged care or private therapy work), you must charge 10% GST.
- You can claim GST credits (input tax credits) on business expenses like phone, equipment, and software.
Should You Register Voluntarily Before $75,000?
Some sole traders voluntarily register early to claim input tax credits on their expenses. However, it comes with more admin — you’ll need to lodge BAS regularly and maintain accurate records. Whether it’s worth it depends on your expense level and business structure.
3. Income Tax for NDIS Sole Traders
GST and income tax are two separate obligations — and unlike GST, there’s no GST-free equivalent for income tax. Your NDIS income is fully taxable as personal income.
How Is It Calculated?
As a sole trader, your business income is treated as your personal income. It’s added to any other income you earn (including employment income if you work elsewhere) and taxed at your marginal income tax rate.
Australia’s individual income tax rates for 2024–25 (after Stage 3 tax cuts):
- $0 – $18,200: Nil (tax-free threshold)
- $18,201 – $45,000: 19 cents per dollar
- $45,001 – $120,000: $5,092 + 32.5 cents per dollar over $45,000
- $120,001 – $180,000: $29,467 + 37 cents per dollar over $120,000
- $180,001+: $51,667 + 45 cents per dollar over $180,000
Important: Medicare Levy (2%) is added on top of your income tax. The Low Income Tax Offset (LITO) and Low and Middle Income Tax Offset (LMITO) may also apply depending on your income level.
PAYG Instalments — Avoid the Year-End Shock
Once your tax payable exceeds $1,000 in a financial year, the ATO will enrol you in PAYG (Pay As You Go) instalments. Instead of paying a lump sum at tax time, you pay tax quarterly throughout the year — much more manageable for cashflow.
Sole App Tip: Set aside 25–30% of every payment you receive into a separate savings account for tax. This simple habit prevents the gut-punch of a large tax bill at EOFY.
4. Deductions: What Can NDIS Sole Traders Claim?
One of the biggest financial advantages of operating as a sole trader is the ability to claim business expenses as tax deductions. These reduce your taxable income — and therefore your tax bill.
Common Deductible Expenses for NDIS Support Workers
- Vehicle & Travel: Kilometres driven to participant locations (using the ATO’s cents-per-kilometre method or logbook method), tolls, and parking.
- Phone & Internet: The work-use percentage of your phone plan and internet bill.
- Professional Development: NDIS training, First Aid certification, CPD courses, and relevant workshops.
- Equipment & Supplies: PPE, first aid kits, mobility aids used in your work, or any tools used exclusively for client support.
- Insurance: Public liability insurance and professional indemnity insurance premiums.
- Home Office: If you manage administration from home, a portion of your home running costs (electricity, internet) may be deductible using the ATO’s fixed-rate method.
- Accounting & Software: Fees paid to a tax agent, bookkeeper, or subscription to tools like Sole App.
- Superannuation Contributions: Voluntary contributions to your super fund are tax-deductible if you lodge a Notice of Intent to Claim form with your super fund before lodging your tax return.
What You Cannot Claim
- Private or personal expenses (even if partially work-related, only the work portion is deductible).
- Fines or penalties.
- Clothing (unless it’s specific protective workwear or a uniform with a logo).
Keep every receipt. The ATO requires records for all claims. Sole App lets you photograph and store receipts directly against each expense, making EOFY stress-free.
5. BAS Lodgment: What to Expect
If you’re registered for GST, you must lodge a Business Activity Statement (BAS) either monthly or quarterly (most sole traders opt for quarterly).
What Does a BAS Include?
- G1 (Total Sales): Your total income for the period, including GST-free NDIS income.
- G2/G3 (GST-Free & Input-Taxed Sales): Your NDIS income that is exempt from GST goes here.
- 1A (GST on Sales): For most NDIS sole traders with purely GST-free income, this will be $0.
- 1B (GST Credits): GST you have paid on business expenses that you can claim back.
- W1/W2 (PAYG Withholding): Only relevant if you have employees.
BAS Quarterly Due Dates
- Q1 (July–September): Due 28 October
- Q2 (October–December): Due 28 February
- Q3 (January–March): Due 28 April
- Q4 (April–June): Due 28 July
Late lodgments attract a Failure to Lodge (FTL) penalty of $330 per 28-day period (up to 5 periods, capped at $1,650). Don’t miss these dates.
Using a registered tax agent extends your BAS due dates significantly. Many agents have concessional lodgment dates that give you more time.
6. ABN, Invoicing & Record-Keeping Requirements
Your ABN
As an NDIS sole trader, you must have an Australian Business Number (ABN) on every invoice you issue. Without an ABN, plan managers and participants may be required to withhold 47% of your payment under the no-ABN withholding rules.
What Must Be On Your NDIS Invoice?
The NDIS has strict invoicing requirements, particularly for Plan-Managed and NDIA-Managed participants. Your invoice must include:
- Your full legal name and ABN
- Your business name (if different from your legal name)
- Invoice number (sequential, unique)
- Invoice date and payment due date
- Participant’s full name and NDIS number
- NDIS support item number and support category
- Description of service delivered
- Date(s) of service
- Quantity / hours provided
- Unit price (aligned to the current NDIS Price Guide limits)
- Total amount charged
- GST status (“GST-free” or “No GST” — do not leave this blank)
Record-Keeping: The 5-Year Rule
The ATO requires you to keep all financial records for a minimum of 5 years from the date you lodge your tax return. This includes:
- Invoices issued and payments received
- Business expense receipts
- Bank statements
- Service agreements
- Mileage logbooks
- BAS lodgment copies
7. Superannuation as an NDIS Sole Trader
As a sole trader, there is no employer paying superannuation on your behalf. Your retirement savings are entirely your responsibility.
Can You Claim a Super Tax Deduction?
Yes. If you make personal contributions to your super fund and lodge a valid Notice of Intent to Claim a Deduction form with your super fund before you lodge your tax return, you can claim those contributions as a personal tax deduction — up to the concessional contribution cap of $30,000 per year (2024–25 financial year).
This is one of the most powerful tax strategies available to sole traders and is often overlooked.
The 11.5% Super Guarantee — Does It Apply to You?
If you engage subcontractors or hire employees, you may have super obligations for them. But for yourself as a sole trader, you are not required to pay yourself super — though it is strongly recommended for your long-term financial wellbeing.
8. Mixed-Service Providers: NDIS + Private Work
Many NDIS support workers also provide private services — aged care, therapy, or community support outside the NDIS. This creates a mixed-supply situation that requires careful tracking.
How to Handle Mixed GST Situations
- NDIS clients (meeting the 4 ATO conditions): Invoice as GST-free.
- Private/non-NDIS clients (if registered for GST): Invoice with 10% GST added.
- Non-NDIS clients (if NOT registered for GST): Invoice without GST, but you cannot claim input tax credits.
The key is to use a consistent, separate tax code for each client type in your accounting system. Sole App allows you to set a default GST code per client — so NDIS clients are automatically flagged as GST-free and your BAS populates correctly without manual sorting.
Manage Your NDIS Tax Obligations with Sole App
Tracking GST codes, managing BAS deadlines, storing receipts, and calculating deductible travel — doing this manually in a spreadsheet is a recipe for errors and stress.
Sole App is purpose-built for Australian sole traders like NDIS support workers:
- Automatic GST coding: Set each client as GST-free or taxable once — Sole App handles it from there.
- Travel calculations: Automated based on the NDIS Support Catalogue so your travel claims are always accurate.
- Expense tracking: Photograph receipts on the go, categorised and stored for tax time.
- BAS-ready reports: Your G1, G2, and 1B figures are calculated automatically, ready to lodge.
- Accountant collaboration: Securely share your books with your tax agent without emailing spreadsheets back and forth.
→ Get started with Sole App for free today.
Frequently Asked Questions
Do I need to charge GST on my NDIS invoices?
In many cases, NDIS services are GST-free if specific conditions are met, including the participant having a current NDIS plan, the support being considered reasonable and necessary, and a valid written service agreement being in place. Always seek professional tax advice for your individual circumstances.
Does GST-free NDIS income count towards the GST registration threshold?
Yes. GST-free income is generally included when calculating your GST turnover. If your total business turnover reaches or exceeds $75,000 per year, you may be required to register for GST.
Can I claim car expenses as an NDIS sole trader?
Yes. Sole traders may be able to claim eligible vehicle expenses related to business activities, such as travelling between client locations. Accurate records should be maintained to support any deductions claimed.
What happens if a participant’s NDIS plan expires during service delivery?
If a participant’s plan expires or is suspended, the GST treatment and funding arrangements for future services may be affected. Providers should confirm the participant’s plan status and eligibility before continuing to deliver and invoice for supports.
How should cancellation fees be treated for tax purposes?
Cancellation fees are generally considered business income, but their GST treatment can vary depending on the circumstances. It is advisable to consult an accountant or tax professional to ensure cancellation income is reported correctly.
