Sole Trader vs. Starting a Company: Which Is Right for You as a Support Worker?

If you’re a support worker considering running your own business, you might wonder: should I operate as a sole trader or set up a company? Both structures have their advantages and challenges, and the right choice depends on your circumstances, goals, and future plans.

This blog will explore the differences between these two structures in the context of running a disability support business. However, keep in mind this is not legal or financial advice—always consult with an accountant or solicitor before making a decision.


What Does It Mean to Be a Sole Trader?

A sole trader is the simplest business structure. As a sole trader:

  • You and your business are legally the same entity.
  • You have full control over decisions and profits.
  • You are personally responsible for debts and liabilities.
  • You report business income and expenses on your personal tax return.

This structure is common among independent support workers because it’s straightforward and cost-effective to set up and maintain.


What Is a Company Structure?

A company is a separate legal entity from its owners. If you establish a company:

  • It can own assets, enter contracts, and be responsible for its own debts.
  • You may be a director and shareholder, meaning you control the company but don’t personally own its assets.
  • You need to comply with stricter regulatory and reporting requirements (e.g., ASIC and tax laws).
  • Your personal liability is generally limited to the value of your shares, provided you act lawfully.

While setting up a company is more complex and expensive, it can offer long-term benefits, especially as your business grows.


Key Differences for Support Workers

1. Liability and Risk

  • As a sole trader, you’re personally liable for debts, which can be a significant risk if issues arise.
  • A company limits your personal liability, protecting your personal assets in most cases.

For example, if an incident occurs while providing support services, a company structure may offer more protection.

2. Taxation

  • Sole traders are taxed at individual income tax rates, which can become high if you earn above certain thresholds.
  • Companies pay a flat tax rate (currently 25–30% in Australia), which may be advantageous if your business is earning substantial profits.

3. Cost and Administration

  • Sole traders have minimal setup costs and fewer ongoing reporting obligations.
  • Companies require upfront registration with ASIC, ongoing compliance, and preparation of financial statements.

For support workers just starting, the simplicity of being a sole trader is often appealing, but as your income grows, the benefits of a company might outweigh the costs.

4. Perception and Opportunities

  • Companies can appear more professional to clients or funding bodies, which may help when competing for larger contracts or becoming NDIS registered.
  • Sole traders may be limited in accessing certain opportunities or appearing as a larger-scale provider.

When to Consider Moving from Sole Trader to Company

If you’re starting as a sole trader, you can always transition to a company later. Here are some signs it might be time to switch:

  • Your income is growing, and you’re paying higher individual tax rates.
  • You want to protect your personal assets from business risks.
  • You plan to expand your services or hire staff.
  • You want to access government funding or contracts that require a corporate structure.

The Importance of Seeking Advice

While this blog outlines key differences, choosing the right structure is a significant decision that depends on your unique circumstances. Factors such as your personal financial situation, long-term business goals, and risk tolerance all play a role.

We strongly recommend speaking to an accountant or solicitor to understand:

  • The tax implications of each structure.
  • The legal protections you might need.
  • How to align your business structure with your personal and professional goals.

Final Thoughts

For many independent support workers, starting as a sole trader is a practical and straightforward way to begin offering services. However, as your business grows, transitioning to a company might provide the security, flexibility, and opportunities you need to expand.

Remember, there’s no one-size-fits-all answer. Take the time to assess your needs and get professional advice to ensure you’re making the best choice for your future.

Have questions about running your support worker business? At Blueset, we’re here to help. Our tools are designed to support independent providers at every stage of their journey—whether you’re a sole trader or a company director.


This blog is for informational purposes only and does not constitute legal, financial, or professional advice. Always seek guidance from a qualified accountant or solicitor regarding your individual circumstances.

Got something out of this? Share with others!

Looking for a comprehensive guide to becoming an independent Support Worker?

Download Free

Looking for an app for Independent Support Workers, with everything you need to get started?

Get Started

Keen for more details?

Get insider knowledge and updates from our NDIS experts, direct to your inbox.