Last updated: 5 October 2026. Written by the FreeMyCloud team.
Checked against the ATO and the Fair Work Ombudsman on 5 October 2026. Software prices are as at 27 September 2026.
Accounting software for builders has to do three things a standard ledger was never built for: invoice one job in stages over months, cope with money the client holds back after the work is finished, and show whether job 14 made a margin before job 15 is priced. Xero and MYOB both handle construction work, but the job costing sits on particular plans at particular prices, and the GST timing on progress claims and retentions is set by the ATO rather than by the software. This article covers when GST on a progress claim becomes payable, what happens to GST on retention money, what job costing has to report, which Xero and MYOB plans include it as at 27 September 2026, and the subcontractor records the taxable payments annual report will ask for.
- Accounting software for builders needs to handle four things: progress claims, retentions, job costing and contractor records for the TPAR.
- Xero tracks projects on its Ultimate plans, from $143 a month.
- MYOB tracks jobs on Business Lite and Pro, and bills by time on AccountRight Plus at $165 a month.
- On the non-cash basis, GST on a progress claim is payable in the period the tax invoice is issued or payment is received, whichever comes first.
- A business mainly in building and construction that pays contractors lodges a TPAR by 28 August each year.
- Super is 12%, and since 1 July 2026 it must reach the employee’s fund within 7 business days of each payday.
What should accounting software for builders do that other business software does not?
A retailer invoices, gets paid, and moves on. A builder signs a contract worth six figures, claims against it in stages, carries subcontractor costs in between, and then waits out a defects liability period before the last of the money arrives. Four things follow from that shape of work.
The first is progress claiming, which means the software has to invoice part of a contract without losing sight of the contract total or what is left to claim. The second is retentions, where an amount is withheld from each claim and released later, so it has to be visible as an asset rather than written off in the head of whoever runs the office. The third is job costing, which puts labour, subcontractors, materials and variations against the job that caused them instead of into one lump called cost of sales. The fourth is contractor records, because building and construction is one of the industries inside the taxable payments reporting system.
Accounting software for builders can do all four. What it will not do is decide your GST method, work out whether you are primarily in building and construction for reporting purposes, or notice that a subcontractor stopped quoting an ABN in March. That is the part that sits with the business, its bookkeeper and its registered tax or BAS agent. FreeMyCloud provides the bookkeeping and construction accounting support that keeps those records current inside whichever system the builder already runs.
When is the GST on a progress claim actually payable?
It depends on the accounting method, and the difference decides which BAS a claim lands in. The ATO sets out two methods of accounting for GST, a cash basis and a non-cash basis, on guidance last updated 14 September 2026.
On the non-cash basis, GST on a sale is accounted for in the reporting period in which you issue the tax invoice or receive full or part payment, whichever happens first. A progress claim raised on 20 March is therefore in the March quarter BAS even if the client pays in May. On the cash basis, GST is accounted for in the period in which the payment is received, and a part payment brings only its own share of the GST with it.
The choice is not open to everyone. The ATO states that businesses with an aggregated turnover of less than $10 million, or who account for income tax on a cash basis, can use either method, and that most larger businesses must use the non-cash method. A builder growing past that turnover figure is a builder whose BAS timing changes.
On the non-cash basis, GST follows the tax invoice or the payment, whichever comes first. On the cash basis it follows the payment. Source: ATO, Choosing an accounting method for GST, last updated 14 September 2026.
Registration itself runs on a separate figure. The ATO requires registration once GST turnover reaches $75,000 or more, and registration within 21 days of passing the threshold, on guidance last updated 14 September 2026. For a builder, a single contract can cross it.
What happens to the GST on money a client holds back?
Retention money is the amount a principal withholds from each progress claim, commonly released in part at practical completion and the balance at the end of the defects liability period. The cash is not in the account, but the attribution rule the ATO publishes does not turn on whether the customer has paid in full. On the non-cash basis, GST is attributed to the period in which the tax invoice is issued or payment is received, whichever happens first, and that rule is written against the invoice rather than against the portion of it the client chooses to hold.
Two practical consequences follow. A builder on the non-cash basis can be remitting GST on an amount that will not arrive for another twelve months, which is a cash flow question worth modelling rather than discovering. And retention has to be recorded somewhere it can be seen, because an amount that exists only as the difference between what was claimed and what was banked is an amount that quietly stops being chased.
How a specific contract is treated, and whether any different attribution applies to the arrangement in front of you, is a question for your registered tax or BAS agent, who can look at the contract terms rather than the general rule.
Whatever the software, retention held against a job needs its own account or tracking code and a release date attached, so the balance sheet shows what is owed and the calendar shows when to claim it.
What does job costing need to show before the next job is priced?
Job costing earns its keep at quoting time, not at tax time. The useful output is a comparison between what a job was priced at and what it cost, broken into labour, subcontractors, materials and variations, with the variations separated out so the difference between a bad estimate and an unbilled change is obvious.
There is a real distinction between tracking and costing. Tracking categories tag a transaction so it can be filtered into a report, which is enough to see revenue and direct costs by job. Project or job costing adds time recorded against the job, cost rates for that time, and a comparison against a budget for the job. A builder who subcontracts almost everything may get what they need from tracking alone. A builder with employed carpenters on the tools usually does not, because the largest single cost is hours, and hours have to be captured somewhere before they can be costed.
The other half is discipline: a subcontractor invoice coded to the wrong job, or three weeks of timesheets entered in one Friday afternoon, produces a report that is precise and wrong. This is where a regular bookkeeping rhythm matters more than the software brand.
Which Xero plan includes job and project tracking, and what does it cost?
Xero’s project time and cost tracking sits on its top tier. The table below is taken from Xero’s Australian pricing page as at 27 September 2026. Xero states prices are in AUD and include GST, and that it can change pricing at any time.
| Xero plan | Price per month | Payroll included | Project time and cost tracking |
|---|---|---|---|
| Ignite | $37 | 1 person | Not included |
| Grow | $78 | 2 people | Not included |
| Comprehensive | $107 | 5 people | Not included |
| Ultimate 10 | $143 | 10 people | Included for 10 users, $7 per additional user |
Every plan in the table tracks GST and lodges BAS, so the compliance basics are not the deciding factor. The deciding factors are how many people are paid and whether project costing is needed in the ledger itself. Xero also notes that additional charges apply if the number of people paid through payroll exceeds the number included in the plan, which for a builder with a seasonal crew is worth checking against a busy month rather than a quiet one.
Larger tiers continue the same pattern, with Ultimate 20 at $180 per month and Ultimate 100 at $300 per month on the same page, each carrying the project tracking for 10 users.
What does MYOB include for job tracking, and on which plan?
MYOB splits the same ground differently, with job tracking available further down the range and time based billing reserved for the AccountRight plans. The table below is taken from MYOB’s Australian pricing page as at 27 September 2026, using the standard rates that apply after MYOB’s current introductory offer periods.
| MYOB plan | Standard price | Payroll | Job capability |
|---|---|---|---|
| Solo | $99 per year | Not available | Mobile app only, tracks GST only |
| Business Lite | $315 per year | $3 per employee per month, up to 2 employees | Track a job’s progress, profit and loss, and expenses |
| Business Pro | $70 per month | $3 per employee per month, unlimited employees | As above, plus timesheets and rosters |
| AccountRight Plus | $165 per month | Unlimited payroll at no extra cost | Adds billing by time and a budget per job |
MYOB’s own answer on the page is that Business Lite or Pro will track a job’s progress, profit and loss and expenses, and that billing customers based on time or attaching individual budgets to each job requires AccountRight Plus or Premier. Premier adds multiple currencies and a second business. MYOB also states there are no lock-in contracts across these plans.
Set against the Xero table, the split is clear enough to act on. A builder who wants per job profit and loss without paying for the top tier will find it earlier in the MYOB range. A builder who wants time costed against jobs inside the same ledger is looking at Xero’s Ultimate tier or MYOB’s AccountRight plans. Neither vendor is the automatic answer, and the payroll count usually settles it, which is the same conclusion reached in our comparison of Xero and MYOB for Australian payroll.
Which subcontractor payments does the software need to capture for the TPAR?
Building and construction is inside the taxable payments reporting system, so the contractor ledger is a reporting obligation rather than an internal record. The ATO states that a business primarily operating in building and construction services must lodge a taxable payments annual report if it pays contractors or subcontractors for building and construction services and has an ABN, on guidance last updated 23 April 2024.
Primarily is defined on that page. It means 50% or more of business income earned from building and construction services in the current financial year, or 50% or more of business activity relating to those services in the current year, or 50% or more of income from those services in the financial year immediately before. The last limb catches a business that has moved on from construction but reported in the previous year.
A taxable payments annual report must be lodged by 28 August each year. Source: ATO, Taxable payments annual report, last updated 23 April 2024.
What goes in shapes how the software is set up. The ATO says to report the total payment amount where a contractor’s invoice covers both labour and materials, and lists what is left out: payments for materials only, incidental labour, invoices still unpaid after 30 June because only payments made on or before 30 June are reported, workers engaged under a labour hire arrangement, and payments to employees, which are reported through Single Touch Payroll instead. A contractor who does not quote an ABN brings PAYG withholding into the picture.
In practice that means supplier records carrying ABNs, a clean line between employees and contractors in the system, and coding that separates a materials invoice from a labour and materials invoice. Our explainer on who must lodge a TPAR and what counts as a reportable payment goes through the report itself in more detail.
What does a builder’s payroll have to handle on top of the books?
Payroll is where construction software choices most often come undone, because the wage is rarely just the wage. Employees on site attract award conditions, and the relevant instrument is the Building and Construction Award, award code MA000020, whose coverage the Fair Work Ombudsman summarises in its award summary for MA000020. The award sets the conditions, allowances and penalty rates that payroll then has to reproduce every week, and the current rates for a given classification are published by Fair Work rather than by the software vendor.
Superannuation runs on its own rules. The super guarantee rate is 12%, and Payday Super has applied since 1 July 2026: the ATO states the contribution must be received by the employee’s super fund within 7 business days after paying your employee, on guidance last updated 29 September 2026. The quarterly due dates applied to pay up to 30 June 2026 only. An award or agreement can require a higher rate than 12%. Our payday super guide explains the rule and the super due dates page lists the dates.
For software selection, the question is narrow: can the system carry the award conditions that apply to your crew, report through Single Touch Payroll, and pay super on time without someone rebuilding a pay run by hand each week. If the answer needs a spreadsheet alongside, the cost of that spreadsheet belongs in the comparison.
What does it take to keep the system ATO-ready once the software is set up?
Chosen software is a starting position, not a result. The reporting only works if the data underneath it is entered on a rhythm: subcontractor invoices coded to jobs in the week they arrive, timesheets in before the pay run rather than after it, retention posted when the claim is raised, bank feeds reconciled often enough that a missing invoice is noticed while someone still remembers it.
That is steady work, and it is the work most building businesses are least staffed for, because the person who knows the jobs best is usually on site. Some builders solve it with a local bookkeeper, some with an office manager, and some by adding offshore capacity to a team they already have.
FreeMyCloud has placed university-qualified graduate accountants based in the Philippines with Australian businesses since 2010, from individual operators to ASX-listed companies. They are able to work with Xero, MYOB, QuickBooks, Reckon, or the client’s own industry accounting software, they work Australian business hours under a signed NDA, and the cost is typically about 50% less than a local equivalent. FreeMyCloud is not a registered tax or BAS agent and does not lodge; the work supports the builder’s own registered agent, who keeps the lodgement role.
Want the job numbers current without changing systems?
A graduate accountant can work inside the Xero or MYOB file you already run, and start within three business days.
Or call 1300 66 88 14, or try the savings calculator. No lock-in contracts.
Frequently asked questions
What is construction accounting software?
Construction accounting software is accounting software that can invoice a contract in stages, show retentions as money still owed, and put labour, subcontractors, materials and variations against the job that caused them. In Australia, Xero and MYOB both do this on particular plans.
Does accounting software for construction need a separate construction application?
Not always. Xero’s Ultimate plans and MYOB’s Business Lite, Pro and AccountRight Plus plans carry project or job tracking themselves. Builders on lower Xero plans commonly use tracking categories for job reporting or add a separate construction application.
What should job costing software show?
Job costing software should compare what a job was priced at with what it cost, broken into labour, subcontractors, materials and variations. Variations are shown separately, so a bad estimate can be told apart from a change that was never billed.
What is a progress claim?
A progress claim is an invoice for part of a building contract, raised as each stage of the work is finished. The software has to keep the contract total, and the amount still to claim, in view after every claim.
Is Xero Projects included in every Xero plan?
No. Xero’s Australian pricing page lists project time and cost tracking on the Ultimate plans only, from $143 a month for Ultimate 10, as at 27 September 2026. The Ignite, Grow and Comprehensive plans do not list it.
Is accounting software for tradies different from accounting software for builders?
The software is the same; the work is different. A tradie on short jobs mostly needs quoting, invoicing and GST, while a builder claiming against a long contract also needs progress claims, retentions and job costing. See our bookkeeping for tradies page.
What is construction bookkeeping?
Construction bookkeeping is the weekly record keeping behind a building business: coding subcontractor invoices and materials to jobs, raising progress claims, tracking retentions, preparing payroll under the award and reconciling the bank. FreeMyCloud provides bookkeeping for builders and construction businesses inside the software the builder already runs.
What is the best accounting software for builders in Australia?
There is no single answer, because the deciding features sit on different plans. As at 27 September 2026, Xero includes project time and cost tracking only on its Ultimate tier at $143 per month, while MYOB offers job progress, profit and loss and expense tracking on Business Lite and Pro, with billing by time on AccountRight Plus at $165 per month. The number of people paid through payroll usually settles the choice.
Does Xero do job costing for construction?
Xero’s pricing page lists project time and cost tracking as a feature of the Ultimate plans, priced from $143 per month for Ultimate 10 and covering 10 users, with $7 per additional user, as at 27 September 2026. Lower plans including Ignite, Grow and Comprehensive do not list it. Builders on those plans commonly use tracking categories for job reporting or add a separate construction application.
When do I pay GST on a progress claim?
It follows your GST accounting method. The ATO states that on a non-cash basis, GST is accounted for in the period in which you issue the tax invoice or receive payment, whichever happens first, so a claim invoiced in March sits in the March quarter even if paid later. On a cash basis, GST is accounted for when the payment is received. Your registered tax or BAS agent can confirm which method applies.
Do builders have to lodge a TPAR?
A business primarily operating in building and construction services that pays contractors for those services and has an ABN must lodge a taxable payments annual report by 28 August each year. The ATO defines primarily as 50% or more of business income or activity from building and construction services in the current financial year, or 50% or more of income in the financial year immediately before.
Is retention money reported for GST before the client pays it?
The ATO’s attribution rule for the non-cash basis is written against the tax invoice: GST is accounted for when the invoice is issued or payment is received, whichever happens first, without a carve-out for an amount the client withholds. That can mean remitting GST well before retention is released. Because contract terms vary, confirm the treatment of a particular arrangement with your registered tax or BAS agent.
What super rate applies to construction employees?
The super guarantee rate is 12%. Since 1 July 2026, under Payday Super, the contribution must reach the employee’s super fund within 7 business days of each payday. An award or workplace agreement can require a higher rate, so the Building and Construction Award MA000020 should be checked for the classifications employed.
This article is general information about Australian bookkeeping and reporting obligations, current as at 27 September 2026. It is not tax, financial or legal advice. FreeMyCloud is not a registered tax agent and does not prepare or lodge tax returns. Rates, thresholds and dates change. Confirm your own position with your registered tax or BAS agent.
