How payroll services for tradies usually works
A practical engagement starts with a short diagnostic: business structure, awards in scope, software stack, current pay items, super setup, timesheet method, and any ATO or Fair Work pressure. From there, the work usually runs in three passes.
1) Stabilise — fix urgent errors, pay corrections, super catch‑ups, and STP mismatches. Clean any duplicate or mis‑mapped pay items that break STP Phase 2 or reports.
2) Standardise — confirm award classifications, overtime rules, allowances (travel, tools, fares, site), RDO patterns, leave accruals, and apprentice rates. Configure software to reflect these rules and document the process.
3) Systemise — connect timesheets to payroll and job costing, set a pre‑payday checklist, schedule super and payroll tax where relevant, and create a month‑end review so BAS and job margins reconcile smoothly.
Key Australian rules to keep in view
- Register for PAYG withholding if you pay employees or certain contractors. Ensure TFN declarations and super choice forms are on file.
- Single Touch Payroll (STP) Phase 2 requires correct income types, tax treatment codes, and allowance mapping in your payroll software.
- Super Guarantee is 11.5% from 1 July 2024 (legislated to 12% from 1 July 2025). Check which earnings are OTE for super.
- Portable long service may apply in construction in some states and territories (e.g., VIC, QLD, ACT). Register and report where required.
- WorkCover/WorkSafe wages declarations depend on state rules. Set calendar reminders around renewal and wage estimate updates.
If you are unsure where to start, we can review your current setup and provide a simple action plan tailored to your crew size and software.
Common issues we fix for tradies
- Incorrect award classification leading to under/overpayments, especially for apprentices and casuals.
- Allowances not mapped correctly to STP (e.g., travel, tools, meal, fares) or treated incorrectly for super.
- Overtime, RDOs and weekend rates not automated, causing manual edits and pay mistakes.
- Timesheets not integrated with jobs, so labour costs don’t reconcile to quotes or invoices.
- Super and leave accrual rules out of date after software changes or rate updates.
- STP rejections, year‑end finalisation errors, or mismatches with ATO payroll data.
Choosing the right provider
Scope
Confirm setup, backpay corrections, STP clean‑up, super lodgements, award reviews, process docs, and training are included—not just “process the pay”.
Software fit
Ensure confidence with your stack: Xero, MYOB or QBO plus time/job tools like Deputy, Tanda, Employment Hero, Simpro, AroFlo, Ascora or ServiceM8.
Turnaround and communication
Agree cut‑off times for timesheets, who approves rates/allowances, and how urgent site issues are escalated on pay day.
Commercial fit
Decide if you need compliance only or monthly support that also improves job margins and cash flow reporting.
Tip: ask the provider to show how a single timesheet flows through to payroll, job costing, BAS and management reports.
In‑house vs outsourced payroll for tradies
- In‑house: close to the crew, instant access to site context; needs training on awards, STP and software changes; risk if the payroll person is away.
- Outsourced: award knowledge, redundancy and up‑to‑date compliance built in; set clear handovers for timesheets, approvals and changes.
- Hybrid: you capture timesheets and approvals; a specialist validates awards, runs payroll, files STP and reconciles super and BAS.
Pre‑payday checklist for site teams
- All timesheets approved by cut‑off, with job codes attached.
- Allowances entered per job/site and matched to the correct pay items.
- Overtime and RDOs flagged; apprentice progressions confirmed.
- New starters have TFN and super choice forms; leavers have final pays calculated correctly.
- Variations since last pay run documented in one message to payroll.
Best next steps
List the top three payroll outcomes you want: fewer errors, correct award setup, clean STP, faster pay runs, clear job labour costs, or handover to a new provider.
Shortlist providers who can show exactly how they’ll configure awards, pay items and timesheets—and who will own month‑end reconciliation so BAS and job margins agree.
Use these related pages if you also need bookkeeping or tax support for your trade business.
Frequently asked questions
Which awards commonly apply to tradies?
Examples include the Building and Construction General On‑site Award (MA000020), Electrical, Electronic and Communications Contracting Award (MA000025), and Plumbing and Fire Sprinklers Award (MA000036). Confirm your coverage and each employee’s classification before setting rates.
How do I handle allowances correctly?
Map each allowance to the right STP category and confirm super treatment. Common tradie allowances include travel, fares, tools and meal allowances. Some are OTE for super; others are not. Create separate pay items so reporting stays accurate.
What changed with STP Phase 2?
STP Phase 2 expands data sent to the ATO: income types, tax treatment codes, child support, paid leave types and allowances. Set up pay items carefully so lodgements don’t error and year‑end finalisation is smooth.
Do apprentices and juniors need special setup?
Yes. Use the correct award classification and progression levels, track training time, and apply the right overtime and allowance rules. Review rates at each milestone and document approvals.
Can I outsource just part of payroll?
Yes. Many tradies keep timesheets and approvals in‑house and outsource award setup, processing, STP lodgement, super reconciliation and month‑end checks.