Australia guides

How do you value a plumbing business in Australia?

You value a plumbing business on normalised earnings rather than turnover, then discount for how much of those earnings depend on the current owner. The complication specific to the trade is that plumbing licences attach to people and entities, not to the business as a saleable asset: the buyer needs their own licensing, and in Queensland a company licence also needs a nominee and a minimum level of net tangible assets set by the regulator. There is no reliable free published multiple for Australian plumbing businesses, so the defensible approach is to build the earnings figure properly, test it against the ATO's industry benchmarks, and price the licensing and owner-dependence risk explicitly rather than burying it in a multiple.

By the bizflip team · Published 2 September 2026 · Facts checked 2 September 2026 · Sources listed below

A plumbing business is valued the same way any trading business is: normalised earnings multiplied by a number that reflects how likely those earnings are to continue. What makes the trade distinctive is not the arithmetic. It is that a large part of what makes the business work — the licence, the compliance certificates, the reputation attached to one licensed operator — may not survive the change of owner at all.

Start with earnings, and be honest about the owner's wage

Most Australian plumbing businesses are owner-operated, which means reported profit is not a fair picture of what a buyer would earn. Normalising means adding back one-off and personal items and removing anything that will not continue, then deciding which earnings figure you are quoting: seller's discretionary earnings, which adds one working owner's wage back, or EBITDA, which deducts a market salary for whoever does that work after settlement. In a business where the owner is on the tools four days a week, the difference between the two figures can be most of the profit. Our guide to SDE and EBITDA explains which to use and why they cannot be mixed with each other's multiples.

Do this before you talk to anyone. A price built on an earnings figure that quietly assumes the buyer works unpaid is the most common reason a trade business deal falls over in due diligence.

Test the earnings against the ATO benchmarks

The ATO publishes small business benchmarks for plumbing services, drawn from 2023–24 tax returns and updated annually. For a business turning over more than $600,000 a year, total expenses run at 75 to 86 per cent of turnover, averaging 80 per cent. Cost of sales sits at 29 to 38 per cent, labour at 23 to 33 per cent, and motor vehicle expenses at 3 to 5 per cent. In the $150,001 to $600,000 band, total expenses run at 59 to 74 per cent, averaging 66 per cent.

Those ranges do not produce a valuation. What they do is tell you, and a buyer's accountant, whether your reported cost base is normal for the trade at your size. Cost of sales well below the range invites the question of whether materials are being expensed elsewhere; labour well below it usually means the owner's own time is not costed, which is the same issue as above showing up in a second place.

The licence does not come with the business

Plumbing is licensed by the states and territories, not nationally, and the licence attaches to a person or a licensed entity rather than to the goodwill being sold. Two examples show the shape of it.

• Victoria separates registration from licensing. A registered plumber may carry out plumbing work but is not authorised to supervise other plumbers or to issue compliance certificates; registered plumbers must either work under the supervision of a licensed plumber or limit themselves to work that does not require a certificate. Only a licensed plumber can issue a compliance certificate, and one is required whenever the total value of the work including materials and GST exceeds $750, and for the installation, relocation or replacement of any Type A gas-using appliance regardless of value. A plumbing licence is granted for up to 12 months and has to be renewed; registration runs for up to three years.
• Queensland requires a company that contracts to the public to hold a company licence, and that licence requires a nominee — a director, secretary or employee of the company who holds a contractor or nominee supervisor licence in the same class, whose name is publicly displayed on the QBCC licence register, and who shares responsibility with the directors for supervision and compliance.

Read those together and the valuation question becomes concrete. If the seller is the only licensed plumber, or the only person who could act as nominee, then the buyer is not purchasing a business that can lawfully trade on day one. They are purchasing a customer list, some vans and a problem. business.gov.au warns that licence transfers can take up to 12 months and should be planned early in the sale process, and lists transferring leases, licences and permits as a step in handing the business over. Twelve months of uncertainty is not a footnote in a price negotiation.

The practical fixes are all things to settle before agreeing a number: the seller staying on under a transition agreement long enough for the buyer to be licensed, an existing licensed employee agreeing in writing to act as nominee, or the deal being structured as a sale of the licensed entity itself rather than its assets. Each produces a different price. Take legal advice on which applies in your state.

In Queensland, the balance sheet is a licensing condition

Queensland goes further than most jurisdictions and ties the licence to the licensee's financial position. Contractor licensees must meet minimum financial requirements, demonstrating enough working capital in the form of net tangible assets to support the turnover they intend to earn. Licensees turning over up to $800,000 make an MFR declaration on the licence application form; above $800,001 an accountant must prepare an MFR report.

A licensee may exceed their maximum revenue by up to 10 per cent without prior approval; beyond that, a new declaration or MFR report supporting the increase must be provided first. For a buyer, this converts an abstract growth plan into a funded one: growing a Queensland plumbing business past its revenue category means putting more capital in, and that capital requirement belongs in the acquisition model alongside the purchase price.

What actually separates a good price from a poor one

• Where the work comes from. Maintenance contracts, builder relationships, strata panels and warranty agreements are worth more per dollar of earnings than reactive callouts won on price, because they are renewable and they survive the owner leaving.
• How much of the work the owner does. A business with a working foreman, a dispatcher and licensed staff who hold their own tickets is a business. A business where one person quotes, supervises, certifies and collects is a job with a van fleet attached.
• Customer and referral concentration. One builder producing most of the revenue is a single relationship, and relationships follow people.
• The defects and warranty tail. Completed work carries obligations that do not end at settlement, and buyers will want to know who wears a defect claim on a job certified before the sale. Say so in the contract rather than leaving it to be argued later.
• Documented systems. Job management software with real history, current pricing, tested quoting margins and complete compliance records lower a buyer's risk. A diary and a memory raise it.

Assets, staff and the parts of the price that are not goodwill

Vehicles, plant, tools and stock are usually valued separately from goodwill, at realistic written-down values rather than replacement cost. Work in progress and debtors are negotiated, not assumed: an invoice raised before settlement is generally the seller's, and unbilled work is worth arguing about early. Where employees move across, this is a transfer of business under the Fair Work Act — the new employer must recognise service for most entitlements, but a new employer that is not an associated entity can decline to recognise service for redundancy and for annual leave, in which case the seller pays them out. In a business whose main cost is labour, that is a real number on one side of the deal or the other.

Why this guide does not give you a multiple

Australian small business sale prices are not recorded on any public register, and no free, methodologically transparent dataset of plumbing business sales exists here. Published ranges circulate, but they are adviser estimates rather than transaction evidence, and quoting one as though it were a market figure would be exactly the overclaiming that gets a seller disappointed. Our page on free data on Australian business sale multiples sets out what evidence genuinely exists and how to triangulate with it, and valuation multiples by industry covers the sector ranges that are published, along with what they are worth.

Working out a number for your own business

Normalise the last full financial year and the current year to date, state your earnings basis, and cost the owner's role at market rates. Compare the result against the ATO benchmark for your turnover band. Then write down, honestly, what happens to the business on the day you stop answering the phone — who is licensed, who could be nominee, which customers are yours personally and which belong to the business. That page of writing does more to set the price than any rule of thumb. How much a business is worth covers the general method, and what similar businesses are currently listed at is a rough sanity check, though asking prices are not sale prices.

Sources

Every load-bearing claim in this guide, and where it comes from:

• ATO small business benchmarks for plumbing services (2023–24 tax return data). For annual turnover of more than $600,000: 'Total expenses' divided by 'Annual turnover' 75% to 86% (average 80%); 'Cost of sales' divided by 'Annual turnover' 29% to 38%; 'Labour' divided by 'Annual turnover' 23% to 33%; 'Motor vehicle expenses' divided by 'Annual turnover' 3% to 5%. For $150,001 – $600,000: total expenses 59% to 74% (average 66%). — Australian Taxation Office
• Victoria: registration "does not authorise you to: Supervise apprentices or other plumbers [or] Issue compliance certificates," and "Registration is granted for up to three years"; a licensed plumber may "Supervise other plumbers registered in the classes you are licensed in" and "Issue compliance certificates," and "A licence is granted for up to 12 months." — Building and Plumbing Commission (Victoria)
• "A compliance certificate must be issued by a licensed plumber for certain types of plumbing work carried out in Victoria… Only licensed plumbers can issue a compliance certificate. Registered plumbers must either work under the supervision of a licensed plumber or limit themselves to plumbing work that does not require a compliance certificate." A certificate is required "where the total value of work (including materials, appliances, labour and GST) exceeds $750" and for "the installation, relocation or replacement of any Type A gas-using appliances, regardless of the cost." — Building and Plumbing Commission (Victoria)
• Queensland company licences: "the company entity must transact through a QBCC contractor-type licence, referred to as a company licence"; the QBCC "requires a qualified person to be nominated as the technical expert of the company"; the nominee "must be a director, secretary or an employee of the company," "must hold either a contractor or nominee supervisor type of licence in the same class as the company licence," "will have their name publicly displayed as nominee on QBCC's Online Licence Search" and "shares responsibility with the directors of the company." — Queensland Building and Construction Commission
• "If you are applying for a contractor-type licence in most classes you need to demonstrate that you have a financially sustainable business with an appropriate level of working capital. This is known as minimum financial requirements (MFR)." An MFR declaration applies "for SC1 and SC2 licensees (up to $800,000)" and an MFR report "prepared by an accountant for Cat 1-7 licensees ($800,001+)", demonstrating "enough working capital — net tangible assets… for your intended and allowable annual turnover — maximum revenue." — Queensland Building and Construction Commission
• QBCC net tangible assets and maximum revenue categories: $12,000 NTA for maximum revenue up to $200,000 (SC1); $46,000 for up to $800,000 (SC2); $46,001–$156,000 for $800,001–$3,000,000 (Category 1); $156,001–$480,000 for $3,000,001–$12,000,000 (Category 2). "You can exceed your MR by up to 10% without obtaining prior approval from us. If you are going to exceed your MR by more than 10%, you must first provide us with a new financial declaration or MFR report that supports the increase." — Queensland Building and Construction Commission
• Selling a business, step 10: "you need to: transfer leases, licenses and permits…" and "License transfers can take up to 12 months, so it's important to plan for this early in the sale process." — business.gov.au (Australian Government)
• Transfer of business: "A new employer has to recognise an employee's service with the old employer when working out most of their entitlements." Entitlements the new employer "might not have to recognise" are "redundancy, annual leave, long service leave, unfair dismissal, notice of termination." Where the employers are not associated entities, the new employer can decline to recognise service for redundancy (the old employer then pays redundancy on termination) and for annual leave (the old employer pays out untaken accumulated annual leave). — Fair Work Ombudsman (Australian Government)
• "There is no one set valuation method"; common methods include current market values, return on investment, business asset value, cost of starting a business from scratch and future profit; business.gov.au suggests getting professional advice from an accountant, business adviser or business broker. — business.gov.au (Australian Government)

Ready for your own number? The valuation calculator is free and ungated, and its methodology is public.