The NDIS has created a large cohort of support workers who operate not as employees but as independent contractors or sole traders. Under the NDIS, registered providers must employ or engage workers through appropriate frameworks, but self-managed and plan-managed participants can engage sole trader support workers directly — paying them from their NDIS funding. This arrangement is common, particularly for domestic assistance, community access support, and personal care.
For bookkeepers, disability support workers as sole traders represent a specific client profile with particular income characteristics, GST implications, and record-keeping requirements that differ meaningfully from other sole trader businesses.
ABN Registration and Business Identity
A disability support worker operating as a sole trader must have an ABN. Many workers new to self-employment treat the ABN as a formality, but it is the legal foundation for the engagement — without it, the participant paying them would technically be required to withhold 47% of payments under the no-ABN withholding rules.
The sole trader should invoice participants (or their plan managers) for services rendered, including their ABN on the invoice, the date, a description of the support provided, and the amount. Under NDIS requirements, invoices for plan-managed participants typically also reference the NDIS support item number and price catalogue rate — the bookkeeper should ensure the template captures these.
GST: Why Most Support Workers Don't Need to Register
NDIS supports are GST-free under Schedule 1 of the GST Act — specifically, they fall under the health and medical services or disability support exemptions. A sole trader providing support work exclusively under the NDIS is providing GST-free supplies. This has two implications:
First, there is no GST to add to invoices. A worker charging $50 per hour charges exactly $50 per hour — there is no GST component.
Second, the GST registration threshold works differently for GST-free supplies than for taxable supplies. All supplies count toward the $75,000 threshold regardless of GST-free status. A support worker earning $80,000 from NDIS work must register for GST — but once registered, they report nil GST on their BAS (because all income is GST-free) and cannot claim input tax credits on business expenses (because they have no taxable supplies to allocate them against — the ATO's reduced input tax credit rules for medical/health services apply, and the position is complex).
In practice, many sole trader support workers operate below the $75,000 threshold and don't need to register. Those approaching or exceeding it should discuss registration with their tax agent, because the ITC position is nuanced and not always beneficial.
Income Records and Invoicing
The bookkeeping system for a support worker needs to capture:
- Each service engagement: date, participant, hours worked, NDIS price catalogue rate, total charged
- Payments received: matching each invoice to the payment from the participant or plan manager
- Outstanding amounts: particularly where plan managers are slow to pay
Many support workers use simple spreadsheets for this initially. A bookkeeper coming in should assess whether the volume of clients warrants simple invoicing software (Rounded, Invoice Ninja, or even Xero Lite) and ensure invoices are being issued promptly — NDIS plan managers have processing timeframes and outstanding invoices at year-end can cause cashflow stress.
Deductible Expenses for Support Workers
The range of deductible expenses for support workers is meaningful:
Vehicle costs: Support workers frequently travel between clients. The logbook method or cents per kilometre method (67 cents per km from 2024-25) applies to the business portion of vehicle use. Workers who travel extensively should maintain a logbook for 12 consecutive weeks and use it to establish the business-use percentage for the full year.
PPE and consumables: Gloves, masks, sanitiser, and other protective equipment used in providing care are deductible.
Phone and internet: The portion used for business purposes — scheduling shifts, communicating with participants and coordinators, maintaining records — is deductible. A reasonable estimate (usually 50-80% for workers who use their phone heavily for work) is acceptable with supporting evidence.
Training and professional development: First aid training, NDIS Worker Orientation Module, CPD courses — all deductible where they maintain or improve skills relevant to the current work.
Professional memberships and registrations: Worker screening fees, professional association memberships relevant to the work.
Home office: Where the worker uses part of their home for administrative tasks — invoicing, record-keeping, client communication — a proportional home office deduction applies.
Superannuation Planning for Sole Traders
Sole traders are not required by law to pay themselves superannuation. Compulsory SG only applies to employer contributions for employees. Many support workers, particularly those who came from employee backgrounds, don't realise they're now responsible for their own retirement savings.
A practical approach: establish a habit of contributing 11.5% of gross income to super voluntarily (mirroring the SG rate). These contributions are concessional — they're deductible for the sole trader under s290-150 of the ITAA 1997, provided the worker lodges a notice of intent to claim a deduction with their fund before lodging their tax return.
The bookkeeper should prompt this conversation, particularly for workers who are relying on NDIS income as their primary source. A sole trader who earns $70,000 and contributes nothing to super is leaving a significant tax deduction on the table and building no retirement savings — two problems a simple annual super contribution strategy addresses simultaneously.
Record-Keeping for NDIS Compliance
Participants and plan managers may require records of services delivered to reconcile their NDIS funding. Support workers should keep contemporaneous service records — shift notes or service agreements — in case of audit or dispute. These records also support the bookkeeping in the event of a payment dispute or overpayment recovery request from the NDIA.