No sick leave. No employer cover. One bad injury and the mortgage doesn't care.

Income protection for tradies in Australia

Tradies and sole traders carry a different income-risk profile from salaried employees. There is no employer-paid sick leave, no annual leave reserve to draw against during recovery, and the cost of even a few weeks off work translates directly into bills not paid. Workers' compensation usually only applies to on-site injuries during paid work — it does not cover off-site injuries, illnesses, or anything that happens at the weekend. Income protection insurance is the product designed to fill that gap: it pays a monthly benefit while you are unable to work due to illness or injury, regardless of where the injury happened.

The structural choices are the same as for any income protection policy but the stakes are higher for self-employed workers. The waiting period is the gap between being unable to work and benefits starting — common options are 14, 30, 60, or 90 days, with shorter waiting periods costing more in premium. The benefit period is how long benefits keep paying once they start — 2 years, 5 years, to age 65, or to age 70. Most tradies pick a 30-day waiting period and a benefit period that runs to age 65, but the right balance depends on cash reserves, family situation, and premium budget.

Occupation rating is where the panel of nine insurers — AIA, Zurich, TAL, OnePath, ClearView, NEOS, Encompass, Acenda, and Futura — diverges most. The same trade (electrician, plumber, carpenter, bricklayer, roofer) can be rated very differently between insurers based on their underwriting appetite. Heavy manual occupations attract higher premiums than office-based work, and high-altitude or licensed-skill work (e.g. roof tiling, scaffolders) sometimes attract additional loadings or specific exclusions. Comparing across the full panel rather than going direct to one insurer is usually the difference between getting standard terms and being declined outright.

Premiums are generally tax-deductible when income protection is held outside super, because the cover relates to assessable income. Cover held inside super is paid for with pre-tax super contributions, but the benefit-period and definition options are often more limited and benefits typically face a release-of-funds test before they pay. Most tradies who already have super-based default cover combine it with a standalone retail income protection policy to get the structure they want without losing the tax efficiency. This is general information rather than personal advice — your accountant or financial adviser is the right person to confirm tax treatment for your specific situation.