Every chapter before this one leans on an assumption: the way you get paid. For a sparkie, employee or contractor is the question that comes first, and it shapes all that follows, what a deduction is, what you hand in at year end, whether GST ever touches you. The guide as a whole is aimed at electricians on wages. If that describes you, work through the rest of the cluster. If instead you trade under your own ABN, this chapter is where the guide steps back and hands you to an accountant.
Why this is the first question
PAYG employee, or contractor on your own ABN? Both are everywhere in electrical work, occasionally side by side on one site the same day, and the answer fixes what a deduction means, what lands on your return in July, and whether GST is ever your problem. Many sparkies swing between the two inside a year: wages from one firm, invoices to another.
Nail this down and the tool, travel and gear rules across the guide fall into place. Leave it hanging and a whole year can go to following the wrong side's rulebook.
How to tell which one you are
No contract-reading required. Watch how the money lands and who is directing the work.
One caution weighs more here than anywhere: the ATO reads the whole relationship, not the ABN in your pocket or a site full of people calling you a contractor. An ABN, or a "contractor" tag on the job, decides nothing on its own. If the arrangement is employment in substance, employment is what you are, whatever the documents say.
What the employed sparkie claims
If tax is taken before your pay reaches the account, you are on the correct page, since the whole guide serves you. Come tax time your task is recovering the work costs you met yourself and were never repaid for: the self-funded tools and test gear, immediate under $300 and depreciated above, the calibration that keeps instruments trusted, the arc-flash clothing, insulated gloves, steel-caps and safety glasses, the sunscreen and sunglasses for hours outdoors, the driving between jobs in one day, a renewal of a licence or ticket already held, your union fee, the work slice of your phone, and self-education that keeps the current trade sharp. The lot goes against your wages on the individual return.
What changes if you contract
Invoice on your own ABN and it is no longer a wages return you file. You run a business, and the ground moves both ways.
This is accountant territory
That is a sketch, not a handbook. An ABN carries real obligations, wider than a single chapter can do justice to, and this is the moment to be plain on scope.
PFO serves the wage-paid electrician. It does not handle GST, it does not prepare or file a BAS, and it does not lodge your return. Contracting means a registered tax agent who knows the trade is the right hand, above all in the first year GST comes into play.
What PFO does, either way, is keep your receipts and records in order across the year so none of it slips: the tool docket, the calibration bill, the kilometres, each photographed and filed, fully encrypted and held in Australia. GST, the BAS and a business return are your accountant's job, not ours, and we say so plainly.
If you are both in the one year
Wages on one site and your own invoiced work on another is a familiar mix for a sparkie, and the answer is a clean divide. Wages and this guide's work deductions on the employee side. Invoiced income and its own business deductions on the business side. Two distinct record sets, so neither muddies the other at filing time, and the business half goes to an accountant.
The records differ too
Whichever side you sit on, the saving habit is capturing a cost as it happens rather than reassembling the year in July. What you keep, though, differs by side.
Receipts for tools, test gear and calibration, a note of the work share on anything shared between work and home, and a logbook or kilometre record for the between-job driving.
Complete business records, both income and expenses, plus BAS filings once GST is running. That is accountant work, beyond what this guide and PFO reach.
For the employee side, the ATO's free myDeductions app covers the basics.
The bottom line
Settle which one you are before anything else, since it drives the rest. Read how you are paid: tax withheld and super going in makes you an employee, and this guide claims your work costs against wages. An invoice on your own ABN makes you a business, with broader deductions and, beyond the turnover threshold, GST and a BAS to manage, which is genuinely accountant ground, not something PFO or this guide takes on. Answer that one honestly and every hour on your tax lands where it belongs.
If you are an employed electrician, see what your tools, test gear, protective clothing and between-job driving come to at tax time.
General information only, not tax advice. Check the ATO or a registered tax agent for your situation.