NDIS Provider Tax Guide: What Registered & Unregistered Providers Need to Know

The National Disability Insurance Scheme has created enormous opportunities for support workers, sole traders, and businesses providing disability services across Australia. But with that growth comes a set of tax and accounting obligations that are unique to this sector — and that many providers get wrong.

Whether you're a sole trader providing support coordination, a company running supported independent living homes, or a therapy provider, this guide covers everything you need to know about GST, income tax, deductions, and the right business structure for NDIS providers.

The Most Important Tax Rule for NDIS Providers: GST

The single biggest tax misconception we encounter with NDIS providers is around GST. Here's the headline: most NDIS supports are GST-free. This has significant implications for your pricing, invoicing, and input tax credit entitlements.

Which NDIS Supplies Are GST-Free?

Under section 38-38 of the GST Act, NDIS supplies are GST-free where:

• The supply is made under a registered NDIS plan (where the participant is NDIS-funded)
• The supply is of a type that falls within the NDIS support categories (daily activities, community participation, therapy, etc.)
• The supply is made to an NDIS participant or to a nominee or registered plan manager on their behalf

This means registered providers invoicing NDIS participants (or their plan managers) for core supports, capacity building, and capital supports should generally not charge GST on those services.

GST Input Tax Credits for NDIS Providers

Here's where it gets nuanced. If your NDIS supplies are GST-free (not input-taxed), you are generally still entitled to claim input tax credits (ITCs) on your business expenses — even though you don't charge GST on your services.

This is a major advantage over, say, residential property investors (whose rental income is input-taxed and who therefore cannot claim ITCs). An NDIS provider making GST-free supplies can register for GST and claim back the GST on:

• Vehicle purchases and running costs
• Equipment, technology, and assistive devices
• Office supplies and rent
• Training and professional development
• Accounting and legal fees

This can generate meaningful GST refunds for providers, particularly those investing in vehicles or equipment.

Unregistered Providers and GST

Unregistered NDIS providers (those not registered with the NDIS Quality and Safeguards Commission) can still receive NDIS funding through self-managed participants only. The GST-free rules still apply to these supplies if the underlying conditions are met. If your unregistered services turn over more than $75,000 per year, you must still register for GST.

Income Tax for NDIS Providers

All income received by NDIS providers — whether a sole trader, company, trust, or partnership — is assessable income for income tax purposes. There are no special income tax exemptions for NDIS providers.

Sole Trader

Most individual support workers and small providers operate as sole traders. All net profit is included in your personal income tax return at your marginal rate (up to 47%). You are eligible for the Low Income Tax Offset (LITO) and Low and Middle Income Tax Offset (LMITO in eligible years).

Company Structure

Larger NDIS businesses often operate through companies. The company tax rate is 25% for small base rate entities (turnover under $50 million). A company structure separates business and personal liability, but profits must be extracted via salary (PAYG) or dividends (franked) — both of which have tax consequences.

Trust Structure

Family trusts are popular for NDIS businesses with multiple family members involved. A discretionary trust allows income to be distributed to beneficiaries in the most tax-effective way each year. However, trust distributions to minors are taxed at penalty rates (up to 47% for children under 18 — the "kiddie tax" rules).

Tax Deductions for NDIS Providers

NDIS providers can claim all legitimate business expenses as tax deductions. The most common and significant ones include:

Vehicle Deductions: Logbook vs Cents Per Kilometre

Transport is one of the biggest expenses for support workers. You have two options:

• Cents per kilometre method — 88 cents/km for 2024–25, up to 5,000 km per year. Simple but capped.
• Logbook method — requires a 12-week logbook establishing your business-use percentage. Allows you to claim the actual business percentage of all vehicle costs including depreciation, fuel, registration, insurance, and servicing. Far better for high-business-use vehicles.

If you drive more than 5,000 km per year for work (common for most support workers), the logbook method is almost always better. We regularly see clients missing out on thousands in vehicle deductions because they've defaulted to the cents-per-km method.

Superannuation Obligations

If you employ staff or pay contractors in certain circumstances, you have Superannuation Guarantee (SG) obligations:

• The SG rate is 11.5% for 2024–25, rising to 12% from 1 July 2025
• Super must be paid quarterly (or more frequently) into a compliant super fund
• From 1 July 2026, Payday Super requires super to be paid within 7 business days of each pay run
• Some contractors who work primarily for your NDIS business may also attract SG obligations — this is a common area of non-compliance

Payroll Tax for NDIS Providers

Payroll tax is a state-based tax on wages. In Victoria, payroll tax applies at 4.85% on wages above the $700,000 annual threshold. Critically, not all NDIS wages are subject to payroll tax. Victoria (and other states) provide payroll tax exemptions for wages paid to workers providing NDIS services to participants — but the rules vary by state and the exemption must be actively claimed. Many growing NDIS businesses are unaware of this exemption and overpay state payroll tax.

Common NDIS Tax Mistakes

• Not registering for GST when turnover exceeds $75,000
• Charging GST on supplies that should be GST-free
• Failing to claim input tax credits on business purchases
• Using the wrong vehicle deduction method
• Not keeping adequate records (particularly travel logs)
• Missing payroll tax exemptions for NDIS wages
• Operating in the wrong business structure as the business scales