The security industry is one of Australia's more demanding bookkeeping environments. Guards work nights, weekends, and public holidays under an award that specifies different rates for each shift type. Licensing costs are significant and recurring. Many operators use a mix of employed guards and subcontracted personnel. And TPAR obligations apply across the board. If you're picking up a security client, or working in this space already, here's a grounded guide to the bookkeeping specifics.
The Security Industry Award: Rates, Penalties, and Classifications
Most guards employed directly by a security company fall under the Security Services Industry Award 2020. The award covers a wide range of classifications — from a Crowd Controller Grade 1 through to a Security Consultant Grade 7 — each with a different base rate. The complexity compounds quickly when you add the penalty rate structure.
Under the award, employees working ordinary hours between Monday and Friday attract the standard rate. Saturday work attracts a 150% penalty (time and a half), Sunday work 200% (double time), and public holidays 250%. Overnight shifts (typically defined as hours between 12 midnight and 6 am) attract a night shift allowance on top of any penalty rate. Employees working a rostered rest day incur further loadings.
For a bookkeeper, this means that payroll processing for a security client cannot simply multiply hours by an hourly rate. Every hour must be categorised by day, time, and whether a penalty or allowance applies, and then the correct rate applied to each category. Payroll software that doesn't support multiple pay rates per employee is inadequate for this industry — you'll need a system that can handle shift-level classification.
The award also requires minimum engagement periods for casuals (typically four hours per shift) and restricts certain deductions from wages. Review the current award text at the Fair Work Commission website before processing a new client's first payroll — award rates are updated annually and the Security Services Award has had several variations in recent years.
Licensing Costs: What's Deductible and How to Code It
In every Australian state and territory, security guards must hold a valid security licence. These licences are issued by state regulators (the Security Industry Registry in NSW, Consumer Affairs Victoria, QBCC in Queensland, and equivalent bodies elsewhere). Licence fees are a direct operating cost for the business, and training costs incurred to obtain or renew a licence are also deductible under section 8-1 of the Income Tax Assessment Act 1997, provided the training relates to the existing business activities.
For coding purposes:
- Individual licence fees paid by the employer on behalf of an employee are generally a deductible employment cost — code to "Employee-related expenses" or a dedicated "Licensing and registration" expense account.
- Licence fees paid by a sole trader or individual contractor for their own licence are a deductible business expense on their personal return.
- Training costs (first aid, certificate-level security training, CPR renewal) are deductible when they maintain or improve skills for existing employment, but not when they enable entry into a new profession — an important distinction if a client's guard is training up from no prior security experience.
State levies imposed on security licence holders are also deductible. Some states impose an annual levy on licensees that funds the state regulator. These levies appear in bank statements as a government payment and should be coded to a compliance or regulatory levy expense account, distinct from the licence fee itself.
Subcontracted Guards and TPAR Obligations
Many security operators supplement their employed workforce with subcontracted guards — particularly for events, short-notice assignments, and specialised crowd control. These subcontracting arrangements bring TPAR obligations.
The security industry is explicitly listed as a TPAR-applicable service category. Any business that provides security, investigation, or surveillance services and pays subcontractors must lodge a Taxable Payments Annual Report by 28 August each year, listing all subcontractors paid during the prior financial year along with their ABN, name, address, and gross payment (including GST).
This means your client needs a contractor register from day one. Every subcontracted guard must be onboarded with their ABN and contact details recorded before their first shift. If a guard cannot or will not provide an ABN, the no-ABN withholding rule requires the client to withhold 47% of the payment — a blunt incentive for guards to register and provide their details.
Also check whether super applies to any subcontracted guards. If a guard's contract is principally for their personal labour (rather than supply of a security business with equipment and staff), super guarantee may be payable even though they're engaged as a contractor. This is one of the most frequently missed obligations in the security industry.
Insurance and Bonding Costs
Security businesses carry significant insurance costs — public liability, professional indemnity, and in some states a mandatory fidelity bond (guaranteeing against theft by guards). These are all deductible operating costs, and they're often paid annually in lump sums that need to be prepaid and amortised over the coverage period.
A security firm paying a $24,000 annual liability premium in July should not expense the full amount in July's profit and loss. The correct treatment is to recognise $2,000 per month across the coverage period — prepaid expenses on the balance sheet reducing each month. This is standard prepayment accounting, but security businesses with annual insurance costs in the tens of thousands are a good context to audit whether a client's bookkeeping is handling it correctly.
Cash Flow Patterns and BAS Timing
Security businesses often have uneven cash flow: large contracts pay on 30-day terms, but wages are paid weekly or fortnightly. This mismatch can create tension at BAS time — if the business is paying out wages before invoice proceeds arrive, there may be a GST credit on wages-related purchases sitting alongside a liability on service invoices already issued.
PAYG withholding is typically a monthly obligation for larger security operators (medium withholders remit monthly; small withholders quarterly). Make sure the remittance cadence is correct and aligned with the client's cash flow pattern. A security business that pays its guards on Thursday but doesn't reconcile withholding until month-end is at risk of miscounting withholding obligations if there are five-Thursday months.
BAS preparation for a security client is generally straightforward — most services are taxable, inputs attract full GST credits, and the BAS fields populate logically. The complexity is almost entirely in the payroll. Keep the award rates current, the subcontractor register clean, and the TPAR lodgement scheduled, and the rest falls into place.