The rule every licence holder should know by heart
Of all the rules in the QBCC framework, one gets misunderstood more than any other: the 10% rule. It is the single tolerance the QBCC gives licence holders for exceeding their Maximum Revenue — and it is the line between a managed year and a licence breach.
Get it right, and a strong year stays lawful. Get it wrong, and the licence is at risk.
What the 10% rule actually says
Every QBCC licence carries a declared Maximum Revenue — the specific dollar amount you are capped at turning over in a financial year. The 10% rule allows you to exceed that declared amount by up to 10% in a financial year without obtaining prior approval from the QBCC.
So a builder on a $3,000,000 Maximum Revenue can lawfully turn over up to $3,300,000 in the year. That is the tolerance.
The moment you expect to exceed your Maximum Revenue by more than 10%, the rules change. You must apply to the QBCC first — with a new financial declaration or MFR report that shows you have the equity to support the increase. The application has to go in before you breach, not after.
The three things that go wrong
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Treating 10% as a buffer to spend. Some builders read the rule as a spare 10% they can grow into. It is not a target — it is a tolerance. Designing your year around consuming it leaves no room for a single contract that tips you over.
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Applying after the breach. The application has to be lodged before you exceed the 10% tolerance. Lodging after you have already blown through it is a breach, regardless of the application. The QBCC can act on a breach that has already occurred.
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Not counting all revenue. Annual revenue for the QBCC is total income from all sources — building work, other business income, interstate and overseas — excluding only personal wages and salary. A builder who counts only the construction income routinely understates revenue and breaches without realising.
How the rule interacts with your category
The 10% tolerance sits within your financial category. If your declared Maximum Revenue is $3m (top of Category 1) and you exceed by 10%, you hit $3.3m — which is inside Category 2 ($3m–$12m). But being inside the category range does not mean you are licensed for it. Your declared amount is what the QBCC has approved; the category is just the range used to set your renewal fee and reporting level.
To lift your declared Maximum Revenue — whether by 10% or by a full category — you apply, supply the financial evidence, and wait for approval. The tolerance is a short-term grace, not a permanent raise.
How regular catch-ups keep you on the right side of the line
The 10% rule is only useful if you can see the line coming. That is what catch-ups are for. On a fixed cadence — monthly or quarterly — we:
- Track your year-to-date revenue against your declared Maximum Revenue, so the 10% line is visible all year.
- Forecast your landing position, so you know months ahead whether you are on track to cross the tolerance.
- Count revenue correctly — all sources, not just construction — so the number is honest.
- Trigger the application early, so if you are going to exceed by more than 10%, the MFR report and financial statements are lodged before the breach, not after.
A builder who sees the line in March lodges the application in April and grows lawfully through June. A builder who sees the line in July has already breached.
How we help
We work with licence holders to manage the 10% rule properly:
- We confirm your declared Maximum Revenue and calculate your exact 10% tolerance.
- We set a fixed cadence of catch-ups where revenue against the tolerance is the first item on the agenda.
- We prepare the MFR report and financial statements for any increase beyond 10%, lodged before the breach.
- We make sure every dollar of revenue is counted the way the QBCC counts it, so there are no surprises at year-end.
If you do not know your declared Maximum Revenue, your 10% tolerance, or where you sit against it right now, that is the conversation to have. Call the direct line — we will confirm the numbers and set up the catch-ups that keep you on the right side of the line.
