Starting Your Own Driving School in Australia
Thinking about starting a driving school? Here's a practical overview of what's involved — licences, insurance, structure, and the operational realities of running your own business.
Starting a driving school in Australia is a realistic goal for an experienced driving instructor, but it requires more than teaching ability. It's a business — and like any business, it has regulatory, financial, and operational requirements that need to be in place before you start.
This article gives you a practical overview. Requirements vary by state, so always verify current rules with your relevant transport authority.
Step 1: Get the Right Authorisation
In Western Australia, driving instructors must hold a Driving Instructor Authorisation issued by the Department of Transport. This requires meeting eligibility criteria including a clean driving record, criminal history check, and passing the required assessments. Check the current requirements at the DoT WA website — these can change.
If you're already authorised as an individual instructor, operating as a driving school (with employed or contracted instructors) may have additional licensing requirements. Confirm with DoT WA what applies to your specific structure.
Step 2: Choose Your Business Structure
The most common structures for a driving school:
Sole trader — Simplest and cheapest to set up. You operate under your own name (or a registered business name). All income is yours; all liability is yours. Suits solo instructors.
Company (Pty Ltd) — More complex to set up, but provides limited liability protection. Better suited once you're employing instructors or carrying significant equipment assets. Requires annual ASIC filing.
Partnership — Two or more people operating together. Useful if you're starting with a co-founder. Requires a partnership agreement.
Most new driving schools start as sole traders and convert to a company structure as they grow.
Step 3: Register Your Business
Register your business name with ASIC if you're not trading under your personal name. Apply for an ABN through the ATO — you'll need this for invoicing, supplier agreements, and to register a .com.au domain.
If your annual turnover is expected to exceed the GST threshold (check the ATO website for the current figure), you'll need to register for GST and lodge regular BAS statements.
Step 4: Insurance
At minimum you need:
Comprehensive car insurance — Standard personal car insurance typically does not cover commercial driving instruction use. You need a policy that explicitly covers your use as a driving instructor. Get this right before you take a single student.
Public liability insurance — Covers claims arising from your instruction activities. Required by most industry associations and many driving school insurance packages include it.
Professional indemnity — Covers claims related to your professional advice or instruction. Increasingly standard for instructors.
Get quotes from insurers who specifically cover driving instructors — rates and inclusions vary significantly.
Step 5: Your Vehicle
Your vehicle needs to be:
- Dual-controlled (instructor-accessible brake as minimum requirement)
- Maintained to a roadworthy standard at all times
- Insured for commercial driving instruction use (see above)
If you're building a school with multiple instructors, each instructor needs their own compliant vehicle. Leasing or financing vehicles for instructors is a common approach for growing schools.
Step 6: Set Up Your Operations
Booking system — A platform like DriveBook handles online booking, payment collection, student records, calendar management, and automated reminders. Starting with the right system prevents the pain of migrating from manual systems later.
Bank account — A dedicated business bank account keeps your business income separate from personal finances, which simplifies tax and bookkeeping.
Accountant — Find an accountant familiar with small service businesses early. They'll help you set up correctly from the start rather than fixing problems retrospectively.
Step 7: Your First Instructors
If you're expanding beyond solo operation, you need to decide whether additional instructors will be:
Employees — You pay their super, withhold PAYG tax, and take on employment law obligations. More responsibility, but more control.
Contractors — They invoice you, handle their own tax and super. Less administrative burden, but the ATO has specific tests for whether a contractor relationship is genuine. Get advice before assuming contractors aren't employees.
The Reality of Running a School
The jump from solo instructor to school owner is significant. You're no longer just teaching — you're managing people, handling finances, dealing with customer complaints that aren't about your own lessons, and maintaining a brand that multiple instructors are operating under.
The reward is a business that runs beyond your own available teaching hours. A well-run five-instructor school earns income across five schedules, not just yours.
DriveBook supports multi-instructor schools on the Business plan. Learn more →
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