The one number that gates every category move
Every QBCC licence category is built on a single metric: Net Tangible Assets, or NTA. Your NTA is the working capital the QBCC uses to decide how much revenue you are permitted to earn. It is the number that gates every category move, every maximum revenue increase, and every application you will ever make to grow your licence.
Yet most licence holders could not tell you their NTA on demand. They know their turnover, their bank balance, and their profit — none of which is the number the QBCC cares about.
What NTA actually is
Net Tangible Assets is your total assets minus your total liabilities — with intangibles stripped out. The calculation removes goodwill, intellectual property, and other non-physical assets, because the QBCC wants to see real, recoverable value that can service debts, pay subcontractors, and cover claims.
In simple terms: what would the business actually be worth in hard assets if it had to stand on its own today? That is your NTA.
The NTA thresholds by category
The QBCC sets NTA floors for each turnover category:
- SC1 (up to $200,000): $12,000 NTA
- SC2 (up to $800,000): $46,000 NTA
- Category 1 ($800,001–$3m): $46,001–$156,000 NTA
- Category 2 ($3m–$12m): $156,001–$480,000 NTA
- Category 3 ($12m–$30m): $480,001–$1,200,000 NTA
- Category 4 ($30m–$60m): $1,200,001–$2,400,000 NTA
The pattern is simple: to earn more, you must hold more. And the NTA has to be there when the QBCC looks — not just on the day you renew.
Where builders get caught on NTA
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Profit is not NTA. A builder can be highly profitable and still fail the NTA test, because profit has been drawn out, spent on equipment that depreciates, or tied up in assets the QBCC excludes.
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Goodwill does not count. A business bought for its name and reputation carries goodwill on the balance sheet — but the QBCC strips it out. The licence holder who paid for goodwill is often shocked to find it buys them nothing with the regulator.
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NTA drifts down through the year. Drawings, loan repayments to directors, and asset purchases all pull NTA down. A position that qualified at renewal can fail a quarter later — and fail the licence with it.
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The deed of covenant trap. Where NTA is short, a third party (often the builder personally) can promise assets through a deed of covenant and assurance. That puts personal assets — the family home — behind the licence. It works, but it undoes the protection the structure was meant to provide.
How to build NTA deliberately
NTA is not something you hope for at renewal. It is something you build through the year:
- Retain earnings rather than drawing them out. Profit left in the business lifts NTA; profit drawn out does not.
- Structure loans correctly. Director loans and related-party lending have to sit the right way on the balance sheet to count toward NTA.
- Time major asset purchases. Equipment and vehicles affect NTA depending on how they are financed and when they land. We plan the timing so a purchase does not collapse the position at the wrong moment.
- Manage the fixed asset register. The register has to reflect real, depreciated values. Overstated assets inflate NTA and fail under scrutiny; understated assets leave capacity unused.
How regular catch-ups protect your NTA
NTA moves through the year. The only way to keep it where it needs to be is to track it through the year — not at renewal. On a fixed cadence of catch-ups, we:
- Calculate your NTA position each period, so you know exactly where you stand against your category floor.
- Flag movements that pull NTA down — drawings, loan repayments, asset timing — before they breach.
- Plan the moves that build NTA — retained earnings, loan structure, asset timing — so the position is there when the QBCC looks or when a category move is needed.
- Keep the fixed asset register accurate, so the NTA is defensible, not aspirational.
How we help
We work with QBCC licence holders to build and protect the NTA that supports their turnover:
- We confirm your current NTA against your category floor, and tell you plainly whether you are safe, borderline, or exposed.
- We set a fixed cadence of catch-ups where NTA is tracked and managed through the year.
- We plan the structure — retained earnings, loans, assets — that builds NTA deliberately rather than by accident.
- We prepare the NTA evidence for every MFR report and category application, so the number the QBCC sees is the number that holds up.
If you do not know your NTA today, you do not know how close your licence is to the line. Call the direct line — we will confirm your position and set up the catch-ups that keep it there.
