When to Hire Your First Employee as a Solo Tradie

The Signs You're Ready

Not every busy period means you need to hire. But if you're seeing several of these consistently, it's worth taking seriously:

You're turning away work regularly Not just occasionally — but consistently. If you're saying no to qualified, well-paying jobs on a regular basis because you physically can't fit them in, you're leaving revenue on the table that could fund an employee.

Your lead time is blowing out If clients are waiting 4–6 weeks or more, some will go elsewhere. Lead time is one of the clearest signals of capacity constraint.

You're working unsustainable hours If you're doing 60+ hour weeks just to keep up, that's not a growth strategy — it's a burnout strategy. Adding an employee isn't just about more revenue; it's about a sustainable workload.

Admin is eating your billable time Some solo tradies hit a point where quoting, invoicing, scheduling, and customer communication takes so long that their billable hours drop. An employee — or even just better systems — can unlock that time again.

The work exists but you can't do it You've won a contract, or you have consistent demand, that requires more capacity than you have. That's the clearest signal of all.

The Signs You're Not Ready

Hiring too early is just as damaging as hiring too late. Watch out for these:

You're busy, but irregularly If your busy periods are followed by quiet ones, you may not have enough consistent work to support employee wages. Employees are a fixed cost — they still need to be paid in slow weeks.

Your cash flow is unstable An employee adds $4,000–$8,000/month in wages plus super, payroll tax (if applicable), and workers' comp. If your cash flow is unpredictable, this level of fixed commitment carries real risk.

You haven't systematised your own work yet If you can't clearly explain how you quote, schedule, communicate with clients, and run jobs — you'll struggle to delegate any of it effectively. Get your own systems in order first.

You're hoping an employee will fix a sales problem If the issue is that you don't have enough work, adding headcount makes it worse. Hire to meet demand, not to create it.

What Hiring Actually Costs

Most sole tradies underestimate the true cost of their first hire. A quick breakdown for a full-time trade apprentice or labourer in Australia (2026):

A fully loaded qualified employee typically costs 20–30% more than their base wage. An apprentice is cheaper upfront but requires significant supervision time — which is itself a cost if it takes you off the tools.

Before you hire, work out how many additional billable hours per week your new employee needs to generate to cover their fully loaded cost. For most trade businesses, a qualified employee needs to be generating 25–35 billable hours per week to be cash-flow neutral.

Apprentice vs. Qualified: Which First?

Hire an apprentice if: - You have time to train and supervise (at least 30–40% of their time will need supervision early on) - You're planning for growth over 3–4 years, not immediate capacity - You're happy to invest in someone's development - The government incentives for apprentices make financial sense for your situation

Hire a qualified tradie if: - You need capacity now — not in 3 years - You need someone who can work independently on jobs - You're willing to pay the higher wage for the productivity - You want to take yourself off the tools on some jobs

Many trade business owners start with a qualified tradie for immediate capacity, then add an apprentice as the business grows further.

The Paperwork You'll Need

Hiring your first employee comes with compliance obligations. At minimum you'll need:

• ✓An employment contract — in writing, before they start
• ✓Tax file number declaration — the employee completes this for payroll purposes
• ✓Superannuation fund nomination — confirm their super fund details
• ✓Workers' compensation insurance — required in all states before an employee starts
• ✓Single Touch Payroll (STP) — you'll need payroll software connected to the ATO
• ✓A Fair Work Information Statement — you must provide this to every new employee
• ✓Relevant award compliance — most trade employees are covered by the Building and Construction General On-site Award or the Electrical, Electronic and Communications Contracting Award, which sets minimum rates and conditions

Talk to your accountant before you hire. Getting this setup right from the start is much easier than trying to fix it later.

Before You Hire: Consider the Alternatives

Hiring isn't the only way to solve a capacity problem. Before you commit to an employee, consider:

Subcontractors Less commitment than employment. Good for variable demand. Be aware of the ATO's contractor vs. employee tests — some arrangements that look like contracting are legally employment.

Labour hire You can source workers through labour hire companies for specific projects. More expensive per hour, but no ongoing obligation.

Better systems and software Sometimes the capacity constraint isn't hours in the day — it's inefficiency. Better scheduling, faster quoting, and automated invoicing can unlock 5–10 hours a week without adding anyone to payroll.

Referring excess work Some tradies build referral arrangements with other operators — you refer your overflow, they refer theirs. You both stay at a manageable size and clients get looked after.

Key Takeaways

• ✓Hire when you're consistently turning away good work, your lead times are blowing out, or you're working unsustainable hours
• ✓Don't hire to solve a cash flow problem or fill quiet periods — employees are a fixed cost
• ✓The true cost of an employee is 20–30% above base wage — calculate the billable hours needed to cover it before committing
• ✓Apprentices are a long-term investment; qualified tradies solve an immediate capacity problem
• ✓Get the employment compliance setup right before day one — contract, STP, workers' comp, award rates
• ✓Consider subcontractors, better systems, or referral arrangements as lower-commitment alternatives first