← Guides / Australia

Australia Construction Industry Tax Guide

Australian construction industry taxation. The guide covers: the PAYG withholding for the contractors — the 'construction industry' is the 'industry that is subject to the 'special PAYG withholding rules' for the 'payments to the contractors'; the 'head contractor' (the 'builder' or the 'developer') must 'withhold the PAYG' from the 'payments to the 'subcontractors' (the 'sole traders' and the 'individuals') if the 'subcontractor does NOT provide the 'ABN' (the 'ABN withholding' at the '47% rate'); the 'head contractor' must also 'report the payments to the contractors' in the 'TPAR' (the 'Taxable Payments Annual Report'); the GST on the construction supplies — the 'construction services' (the 'building work', the 'renovation work', the 'repair work', the 'demolition work', the 'landscaping work') are subject to the 'GST at 10%'; the 'builder' or the 'construction contractor' must 'register for the GST' if the 'GST turnover' is $75,000 or more; the 'GST on the construction supplies' is the 'GST on the supplies that are the 'new residential property', the 'commercial property', and the 'construction services'; the 'GST on the new residential property' (the 'sale of the new residential premises') is 'subject to the GST' (the 'GST margin scheme' may apply); the 'GST on the sale of the existing residential property' (the 'sale of the existing residential premises') is 'GST-free' (the 'input-taxed supply' for the 'residential rent' but the 'sale of the existing home' may be 'GST-free' if the 'vendor is the 'registered for the GST' and the 'sale is the 'supply of the residential premises' — the 'GST-free supply' under the 'GST Act'); the TPAR (the Taxable Payments Annual Report) — the 'TPAR' is the 'annual report' that the 'head contractor' (the 'building and the construction business') must 'lodge with the ATO' by the 28 August each year; the 'TPAR' reports the 'total payments' made to the 'contractors' (the 'subcontractors') for the 'building and the construction services' in the 'financial year'; the 'TPAR' includes: the 'contractor name', the 'ABN', the 'total payments', and the 'GST-inclusive amount'; the 'failure to lodge the TPAR' may result in the 'penalty' of $550 per 28 days (the 'failure to lodge penalty'); the construction industry and the superannuation — the 'builder' or the 'head contractor' must pay the 'super guarantee (the 'SG')' at 11.5% on the 'payments to the 'employees' (the 'employees' under the 'construction award'); the 'payments to the 'independent contractors' (the 'contractors who are the 'sole traders') are NOT 'subject to the SG' — the 'contractor must pay the 'own super contributions' (the 'personal deductible contributions').

PAYG Withholding for Contractors

  • ABN withholding at 47%: The 'head contractor' must 'withhold 47%' from the 'payment to the subcontractor' if the 'subcontractor does NOT provide the 'ABN'.
  • Contractor reporting: The 'head contractor' must 'report the payments to the contractors' in the 'TPAR' by the '28 August' each year.

For the PAYG withholding and the employer obligations, see our Hiring Employees Guide →.

GST on Construction

  • GST at 10%: The 'construction services' are subject to the 'GST at 10%'. The 'builder' must register for the 'GST' if the 'turnover' is $75,000 or more.
  • New residential property: The 'sale of the new residential premises' is subject to the 'GST'. The 'margin scheme' may apply.
  • GST-free supplies: The 'sale of the existing residential premises' may be 'GST-free' if the 'conditions are met'.

For the GST on the property and the margin scheme, see our GST Guide →.

TPAR & Compliance

  • TPAR deadline: The '28 August' each year for the 'TPAR lodgement'. The 'TPAR' is lodged through the 'ATO online services' (the 'Business Portal').
  • Penalty: The 'failure to lodge the TPAR' results in the 'penalty' of $550 per 28 days.

For the super guarantee and the employer super obligations, see our Superannuation Employer Guide →.