Australian Construction Chart of Accounts for Xero (GST + Retentions)

Construction in Australia does not carry the reverse-charge machinery that the UK puts on building work, but it has its own accounting demands: subcontractor verification, retentions held on both sides, and a hard split between labour, materials, and hired plant. This is an Australian construction chart of accounts built for Xero, with those accounts in place and a sensible GST code on every line. It ships as a readable reference (CSV) and a Xero import CSV.

No reverse charge, but verify every ABN

It is worth stating plainly, because bookkeepers moving from a UK file expect it: there is no construction reverse charge in Australia. A registered subcontractor charges 10% GST, you pay it, and you claim the credit. What does bite is the no-ABN withholding rule: if a supplier in business does not quote an ABN on an invoice over A$75, you generally withhold 47% and send it to the ATO. The subcontractor labour account is coded to GST on Expenses with a note to verify the ABN before paying, because that verification is the step most likely to be missed on a busy site.

The labour, materials, and plant split

The chart replaces a single subcontractor cost line with subcontractor labour, materials, and plant and equipment hire. The split is not cosmetic. Job costing and margin analysis read off these three separately, the instant asset write-off touches owned tools rather than hired plant, and materials carry an import wrinkle that labour does not: imported building materials over A$1,000 attract GST at the border, claimed on the import declaration rather than from the supplier invoice. Keeping them apart keeps both the BAS and the job profit honest.

Retentions on both sides

Two control accounts handle the cash that contracts hold back. Retentions receivable is money your customers hold back pending completion; retentions payable is money you hold back from your subcontractors. Both default to BAS Excluded, because the retention itself is not a separate taxable supply. Leaving them out overstates debtors and creditors and quietly distorts cash flow.

Tools and the instant asset write-off

Trade businesses buy tools constantly, and the timing concession matters. A small business under A$10 million turnover can immediately deduct an eligible asset costing less than A$20,000 for the 2025-26 year, on a per-asset basis, with assets of A$20,000 or more going into the small business pool. The chart gives tools and small equipment their own GST on Capital account so the write-off decision has a clean home, with a note flagging the threshold. Confirm the current-year figure before relying on it, since it is legislated year by year.

The FBT trap on the work ute

A dual cab ute is not automatically free of fringe benefits tax. The motor vehicle accounts carry a note that an eligible vehicle is FBT-exempt only where private use stays minor, infrequent, and irregular, so the books prompt the question rather than assuming the answer.

How to use it

1. Open the CSV: each account carries its class, a default Xero GST code, the alternatives, and a note. The retention, materials and plant accounts are the trade additions.
2. In Xero, go to Accounting, then Chart of accounts, then Import, and upload the CSV into a demo organisation first.
3. Switch on the advanced rates if you use GST on Capital for tools and vehicles.
4. Keep labour and materials on separate lines on every subcontractor invoice so job costing stays clean.

The recurring work is keeping each cost coded and split correctly:

• Hubdoc pulls recurring merchant and plant-hire bills into the file.
• ExpenseFlow reads each receipt and tax invoice, codes it to the right trade account with the correct GST treatment, attaches the source image, and posts it into Xero, while flagging a missing ABN, a possible FBT vehicle, and a sub-A$20,000 asset that may qualify for the write-off for you to confirm.
• Dext applies supplier rules for repeat materials suppliers.

The accounts give you a clean place to record verification and retentions, but the ABN check itself stays a process step. For the full trade picture, see the Australian construction expenses guide. On QuickBooks instead? See the Australian construction chart of accounts for QuickBooks.