Here’s a stat worth sitting with: a thirty-year-old tradie has roughly a one-in-three chance of being off work for three months or more due to illness or injury before they reach retirement age. Not a workplace accident specifically — any illness or injury that stops you from doing your job.
If you’re an employee, that three months is unpleasant but manageable. Workers comp covers work injuries. Sick leave covers the first few weeks. Maybe your employer has an income protection scheme through super.
If you’re a sole trader, none of that exists. No workers comp for yourself. No sick leave. No employer-funded income protection. The day you stop working is the day your income stops. And for most sole trader tradies, income stops before expenses do — the mortgage, the ute payments, the tool finance, the kids’ school fees, the grocery bill. They don’t pause because you did.
This guide is about the insurance most tradies don’t have until it’s too late to buy it.
Why tradies need income protection more than desk workers
The physical nature of trade work makes injury statistically more likely than for office-based occupations. And the consequences are more severe — you can’t “work from home with a broken leg” when your job is installing hot water systems or framing roofs.
Common tradie injuries:
Falls from height — ladders, scaffolding, roofs. The most common serious injury mechanism. Outcomes range from fractures to spinal injuries. Recovery time: 6 weeks for a simple fracture, 3-12 months for complex injuries, potentially permanent for spinal damage.
Back injuries — lifting heavy materials, awkward working positions (under sinks, in roof spaces, at switchboards), repetitive strain. Back injuries are the most common reason tradies leave the tools before retirement age. Recovery: weeks to months, with high recurrence rates.
Knee injuries — years of kneeling on hard surfaces (tilers, floor layers, plumbers), climbing ladders, carrying weight. Meniscus tears, ligament damage, osteoarthritis. Recovery: 4-12 weeks for surgical repairs, with long-term implications for trade work.
Hand and wrist injuries — carpal tunnel, tendon injuries, fractures, crush injuries. For a tradie, hands are everything. Recovery: 2-8 weeks for soft tissue, 6-12 weeks for fractures. Some hand injuries end trade careers.
Shoulder injuries — overhead work (sparkies, painters, plasterers), heavy lifting. Rotator cuff tears, impingement, dislocation. Recovery: 6-12 weeks for surgical repair, often with reduced capacity afterwards.
Electrical shock — specific to electricians. Even a non-fatal shock can cause nerve damage, burns, and cardiac effects. Recovery: variable, sometimes permanent.
Sewage and chemical exposure — plumbers and drainers face infection risks. Chemical exposure from solvents, paints, adhesives across multiple trades. Respiratory conditions can develop over years.
Why tradies are more exposed than they think:
Most tradies are self-employed. No sick leave means day one of an injury is day one of zero income. The mortgage doesn’t have a 30-day waiting period. The ute finance company doesn’t care that you’re in hospital. The ATO still expects its quarterly BAS and annual tax.
The average claim duration for a tradie income protection claim is 3-6 months. At $1,500/week in pre-injury income, that’s $19,500-$39,000 in lost earnings. Most sole traders don’t have that sitting in an emergency fund.
The key decisions: waiting period, benefit period, and benefit amount
Income protection policies have three dials that determine cost and coverage:
Waiting period
How long you wait after becoming unable to work before payments start. Common options: 14 days, 30 days, 60 days, 90 days.
A shorter waiting period means payments start sooner, but premiums are significantly higher. The jump from 90 days to 30 days can double the premium. The jump from 30 days to 14 days can add another 30-50%.
Most tradies choose 30 days as the sweet spot — long enough to keep premiums manageable, short enough that you’re not burning through your entire savings before the insurance kicks in. If you have a solid cash buffer (3+ months of expenses), a 60 or 90-day wait makes financial sense — you self-insure the waiting period and save on premiums.
Recommendation: 30 days if you have less than 2 months’ savings. 60 days if you have 3-6 months’ savings. 90 days only if you have 6+ months’ savings and want the lowest premium.
Benefit period
How long payments continue if you remain unable to work. Common options: 1 year, 2 years, 5 years, to age 65.
A longer benefit period costs more but provides meaningful protection against career-ending conditions. A 30-year-old tradie with a spinal injury might never return to the tools. A 1-year benefit period pays for a year and stops — leaving them with a lifetime of lost earning capacity and no insurance payout.
For tradies under 45, a 2-year to 5-year benefit period is the sensible range. The premium difference between 2 years and to-age-65 is often 30-50%, which is significant. But the protection gap is enormous — a 2-year benefit covers most injuries (which resolve within 6-12 months) while a to-age-65 benefit protects against career-ending conditions.
Recommendation: 2-year benefit period minimum. 5-year or to-age-65 if you can afford it and have dependants.
Benefit amount
The monthly benefit you receive while unable to work. Typically capped at 75% of pre-disability income (or 85% for some policies). The cap exists to ensure you have a financial incentive to return to work.
A tradie earning $100,000/year can typically insure up to $75,000/year — or about $1,440/week. Most tradies insure for less than the maximum to keep premiums affordable. A $1,000/week benefit is common for sole traders earning $80K-$120K.
Recommendation: cover your essential monthly expenses — mortgage/rent, utilities, food, transport, loan repayments. Don’t try to insure your full pre-tax income. Insurance is for survival, not lifestyle maintenance.
Own-occupation vs any-occupation
This distinction is critical and often misunderstood.
Own-occupation: you can’t do your specific trade or profession. If you’re an electrician and you can’t do electrical work, you get paid — even if you could theoretically work at Bunnings or drive an Uber.
Any-occupation: you can’t do any occupation you’re reasonably suited to by education, training, or experience. If you can’t be an electrician but you could work as an electrical wholesaler sales rep, the insurer might decline your claim after the initial period.
Own-occupation cover costs more but is what most tradies actually need. A chippy who loses hand function can’t frame houses, but could they work at a timber yard? Under any-occupation, maybe. Under own-occupation, they get paid because they can’t do their trade.
Some policies start as own-occupation for the first 2-5 years and then switch to any-occupation. This is a compromise that keeps premiums lower while providing own-occupation protection for the period when most claims resolve. Read the definitions carefully — the wording in the PDS is where the real cover lives or dies.
Personal accident & illness (PA&I) vs retail income protection
Tradies will encounter two types of income protection products:
Retail income protection — typically sold through financial advisers and direct insurers. Full-featured, medically underwritten at application (you disclose your full medical history), with comprehensive definitions. Premiums are generally higher but cover is broader. Can be held inside or outside super.
Personal accident & illness (PA&I) — typically sold through trade insurance platforms and brokers. Simpler, more affordable, with defined benefits rather than income replacement. A PA&I policy might pay a fixed $1,000/week regardless of your actual income. Underwriting is simpler — often a short health declaration rather than full medical disclosure. Designed specifically for tradies and self-employed people.
For most sole trader tradies, PA&I is the practical choice. It’s cheaper, easier to get, and designed for the trade market. Retail income protection is worth considering if you have significant income, complex medical history, or specific cover needs that PA&I doesn’t address.
Tax deductibility
This is where income protection has an advantage over most other insurance.
Premiums for income protection held outside super are tax-deductible to the individual. If you pay $600/year for a PA&I policy and you’re in the 30% tax bracket, the after-tax cost is $420/year.
Caveat: if you hold income protection through super (your super fund deducts the premiums from your super balance), you don’t get the personal tax deduction because the super fund gets it. The benefit goes to your super balance through reduced tax inside the fund, not to your personal tax return.
The tax treatment of the benefit payment also matters. If you claimed a tax deduction for the premiums, the benefit payments you receive while disabled are taxable income. If you didn’t claim a deduction (for example, you hold the policy through super), the benefit payments are generally tax-free. This is a trade-off — deduction now vs tax-free benefit later — and worth discussing with your accountant.
What it costs
PA&I premiums for tradies in 2026, based on a sole trader aged 35-45, non-smoker, $1,000/week benefit, 30-day waiting period, 2-year benefit period:
- Electrician: $35-$80/month
- Plumber: $35-$75/month
- Builder: $40-$90/month
- Carpenter: $30-$70/month
- Painter, plasterer, tiler: $25-$60/month
- Landscaper: $30-$70/month
- Cleaner, handyman: $20-$50/month
Premiums increase with age, smoking status, shorter waiting periods, longer benefit periods, and higher-risk trades. A 25-year-old non-smoking painter pays less than a 55-year-old smoking roofer.
You can compare PA&I quotes as part of a tradie insurance package through BizCover — get a quote. BizPack policies often include PA&I as a component.
For the full sole trader insurance picture — PL, tools, and everything else — read our sole trader insurance guide. And if you’re wondering whether PL alone is enough, start with our public liability guide.
How to compare income protection policies
Beyond the price, compare these features:
Waiting period options — can you choose 14, 30, 60, or 90 days? More flexibility is better.
Benefit period — is 2 years available? 5 years? To age 65?
Own-occupation definition — is it own-occupation or any-occupation? If it switches, when? Read the definition in the PDS, not the marketing summary.
Benefit amount — what’s the maximum monthly benefit as a percentage of income? 75% is standard. Some PA&I policies pay a fixed amount unrelated to income.
Exclusions — does the policy exclude pre-existing conditions? Mental health conditions? Specific activities (working at height, underground, overseas)?
Offset clauses — if you receive other payments (workers comp, Centrelink, a TPD payout from super), does the PA&I benefit reduce? Some policies offset dollar for dollar; others don’t.
Worldwide cover — if you’re injured overseas (holiday in Bali, working in NZ), are you covered? Some policies are Australia-only; others are worldwide.
Premium guarantees — is the premium level for the life of the policy, or can it increase each year? Level premiums cost more initially but don’t rise with age.
Frequently asked questions
Can I get income protection if I’ve had a previous back injury?
It depends. Most PA&I policies ask about pre-existing conditions. A previous back injury that has fully resolved with no ongoing treatment might not affect cover or might attract a back-related exclusion. A chronic back condition with ongoing treatment will likely result in a back exclusion or a decline. Declare everything honestly — undisclosed pre-existing conditions are the number one reason income protection claims get denied.
Does income protection cover me if I get sick, not just injured?
Yes — it’s “personal accident and illness.” Illness includes cancer, heart conditions, stroke, mental health conditions, and any other medical condition that stops you from working. Income protection is not just for workplace accidents.
What happens if I return to work part-time while still recovering?
Most policies have partial disability or rehabilitation provisions. If you can work part-time (e.g., 2 days a week instead of 5), the policy may pay a proportion of your benefit to top up your reduced income. The exact formula varies — check the PDS for “proportionate benefit” or “partial disability” clauses.
Can I have income protection through my super and a standalone PA&I policy?
Yes, but if you claim on both, the benefits may be offset. Most policies have offset clauses that reduce their payment by the amount you receive from other sources. This prevents you from profiting from disability. Check both policies’ offset clauses before doubling up — you might be paying for cover that won’t pay out because the other policy pays first.
Is income protection worth it if I’m young and healthy?
That’s exactly when it’s cheapest and easiest to get. A 25-year-old non-smoking carpenter might pay $25/month for a policy that would cost $60/month at 45. And injuries don’t check your age — young tradies fall off ladders, injure their backs, and have accidents at the same rate as older ones. The question isn’t whether you need it at 25; it’s whether you’d rather pay $25/month now or try to survive three months with no income after an accident.
The information in this guide is general in nature and does not take into account your individual circumstances. Income protection needs vary by age, health, occupation, income, and financial situation. Tax treatment depends on individual circumstances and may change. Consult a financial adviser for personal advice. Read the Product Disclosure Statement (PDS) before purchasing any insurance product.