Understanding the Legal Requirements for Auto Repair Shops in Australia

03 Jun 2024 Helpful Tips

legal requirements “ width= 

Are you thinking of starting your own auto repair shop in Australia? Starting a mechanical workshop in Australia is an exciting adventure however, there are many legal requirements that you need to adhere to at all times to trade compliantly.

That brings us to the question, what are the legal requirements for Auto Repair Shops in Australia?

Workshop Mate has put together the complete guide covering the current legal requirements for Auto Repair Shops in Australia.

Let’s get into it!

1. Business Structure and Registration

Choosing a Business Structure

Before starting an auto repair shop in Australia you will need to know and decide on a business structure that you are going to use. Are you going to trade on your own? will it be a partnership? These are some of the things that you need to consider.

The common business structures in Australia are sole trader, partnership, company, and trust. Each structure has its own legal and tax differences:

  • Sole Trader: The most common small business structure in Australia. Sole trader businesses are simple to set up and operate, and give you full control but unlimited liability.
  • Partnership: This structure is where you partner with another individual to operate your mechanical Workshop. A partnership comes with shared control and profits, but each partner shares unlimited liability.
  • Company: Choosing a company business structure comes with limited liability and a separate legal entity, but it is much more complex and costly to establish.
  • Trust: Starting a mechanical workshop in Australia under a trust can provide tax benefits but involves a complex setup and compliance requirements.

Business Name Registration

Once you have understood and chosen the business structure that you want to use, you will then need to register your business name with the Australian Securities and Investments Commission (ASIC). Before choosing a business name, check that the name is available and not already in use.

Australian Business Number (ABN)

The next step that you will need to complete to ensure that you are trading compliantly is registering an ABN for tax and business transactions. You can apply for an ABN through the Australian Business Register.

It is important to note that if your turnover is over $75,000 or more annually, you must register for GST.

2. Licenses and Permits

Local Council Permits

Before choosing a location for your auto repair workshop it is important that you understand your desired local council areas business requirements. Local councils regulate the establishment and operation of businesses within their jurisdictions. To open your mechanical workshop you will need to gain the necessary permits which may include:

  • Zoning Approval: You will need to ensure that your mechanical workshop location is zoned for commercial use.
  • Development Approval: If you are planning on constructing a workshop location from scratch you will need to get development approval. It is important to note you may also need development approval for modifications to an existing property.
  • Environmental Health Permits: Your Workshop will need to gain relevant environmental permits for handling hazardous materials and ensuring proper waste disposal.

Vehicle Repairer’s Licence

To service and repair vehicles in Australia you will need to gain a Vehicle Repairers Licence. In many states this is a compulsory requirement. For example, in New South Wales, you will need to gain a Motor Vehicle Repairers Licence from NSW Fair Trading. To get a Vehicle repair licence you may need to provide proof of qualifications, industry experience, and pass a background check.

3. Occupational Health and Safety (OHS)

Workplace Safety

Australia has one of the most stringent occupational health and safety laws in the world. The Australian government goes above and beyond to protect workers. As an employer in Australia, you must ensure a safe work environment at all times. It is a requirement that you:

  • Perform Risk Assessments: You will need to regularly identify and assess potential hazards at your Mechanical Workshop.
  • Safety Training: You will also need to provide ongoing training for employees on safe work practices.
  • Personal Protective Equipment (PPE): You will need to ensure that you have the appropriate PPE for staff when performing servicing or repairs.
  • First Aid: It is a requirement that your workshop has accessible first aid kits and you train staff in basic first aid procedures.

Safety Standards

It is vital that your Workshop complies with all relevant safety standards in Australia set by Standards Australia. These safety standards include ensuring all your equipment and tools meet safety requirements and are regularly maintained.

4. Environmental Regulations

Waste Disposal

An Auto repair shop will generate various types of waste, including hazardous materials like oil, coolant, and batteries that will need to be disposed of safely. To operate compliantly your Workshop will need to follow the guidelines set by the Environmental Protection Authority in your state or territory.

  • Segregate Waste: Separate hazardous and non-hazardous waste appropriately at your Workshop.
  • Licensed Disposal: Use licensed waste disposal companies for hazardous materials like vehicle oils.
  • Record Keeping: It is important that your Workshop maintains records of waste disposal to demonstrate compliance.

Pollution Prevention

Your Workshop will need to implement measures to prevent pollution, such as:

  • Implementing Spill Kits: Have spill kits readily available to manage any accidental spills at your Mechanical Workshop.
  • Drainage Management: Ensure no harmful substances enter the stormwater system.
  • Recycling Programs: It is important that you promote recycling of materials like metal, plastic, and paper properly.

5. Consumer Protection Laws

Fair Trading

Australia goes above and beyond to ensure consumers are protected. It is compulsory that your mechanical workshop complies with Australian Consumer Law. ACL Laws include:

  • Honest Advertising: Provide truthful and clear information in all marketing materials of your Workshops services.
  • Quality of Service: Guarantee that all services and repairs are performed with due care and skill.
  • Warranties: Honour any warranties or guarantees provided to customers.

Dispute Resolution

To ensure compliance at all times, it is important that your Workshop implements a process for handling customer complaints and disputes. Some good strategies include:

  • Complaint Handling Policy: Have a clear, written policy outlining how complaints are managed if and when they arise.
  • Resolution Timeframes: Set and communicate realistic timeframes for resolving issues to customers who may be disgruntled.
  • Third-party Mediation: If necessary, use mediation services to resolve disputes with customers.

6. Employment Laws

Hiring Staff

There are regulations and laws for all Australian business when hiring staff these include:

  • Fair Work Act: You will need to ensure that your Workshop adheres to the national minimum wage and conditions of employment.
  • Awards and Agreements: You will need to ensure your workshops employees are paid according to the relevant award or enterprise agreement.
  • Workplace Policies: It is important that your Workshop develops policies on issues such as leave entitlements, working hours, and harassment.

Superannuation and Payroll Tax

Another compulsory legal requirement that your Workshop will need to adhere to is to provide superannuation contributions for your employees and comply with payroll tax obligations if your total wages exceed the state or territory threshold.

7. Financial Compliance

Record Keeping

There are also different financial compliance regulations that you will need to adhere to. Firstly you will need to maintain accurate and up-to-date financial records, including:

  • Income and Expenses: Your Workshop will need to track all business transactions.
  • Tax Returns: Your Workshop will also need to lodge regular Business Activity Statements (BAS) if registered for GST.
  • Annual Financial Statements: Lastly your Workshop will need to prepare annual financial reports for tax purposes.

Tax Obligations

It is also a legal requirement that your Workshop meets all tax obligations, including income tax, GST, and potentially fringe benefits tax (FBT) if you provide benefits to employees.

8. Industry-Specific Regulations

Trade Qualifications

It is important that you ensure that all your mechanics hold the necessary trade qualifications to service and repair vehicles such as a Certificate III in Light Vehicle Mechanical Technology. Some states require certificate holders to undergo ongoing training to keep skills current and certifications valid.

Vehicle Standards

Lastly your Workshop will need to comply with the Australian Design Rules (ADRs) and other vehicle standards. This includes ensuring that any modifications or repairs meet the legal requirements for roadworthiness.


Starting and operating a Mechanical Workshop involves navigating vast legal requirements. It is important to note that legal requirements can and often change and your workshop should consult with industry and government professionals to ensure compliance at all times.

DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature. Please consult with all relevant parties prior to making any decision.

We hope you enjoyed reading this article. To read more articles like this, please visit the Workshop Mate latest news page here.

About Workshop Mate,

Workshop Mate by Jeal is an Australian, Web-based, Workshop Management Software that simplifies and automates the daily tasks of running a mechanical Workshop. Using innovative technologies, Workshop Mate removes common frustrations experienced at the Workshop – opening your doors for future growth.

Workshop Mate features include Job Management, Stock Management, Quotes, Invoicing, Integrated Accounting, Barcoding, Customer Bookings, Service History, Job Allocation and more – in the one central, easy-to-use application.

Never tried Workshop Mate? Give Workshop Mate a try today for free! Click the button below to start your 14-day free trial.

 Try it FreeGet your 14 Day Free Trial