Preheat the oven to 175 C. Spread the macadamia nuts in a single layer on an un-greased baking tray. Bake for 5 to 8 minutes until slightly darkened and fragrant. Set aside to cool. You can chop them coarsely at this stage, if you prefer slightly less chunky cookies. I left them as is.
In a mixing bowl, beat the butter and sugars using a hand mixer, until pale and fluffy.
Add the egg and vanilla and beat again till combined.
Sift in the flour, baking soda, baking powder and salt, if using. Fold to combine into a thick, sticky dough. Lastly, fold in half the sprinkles and all of the macadamia nuts making sure they're evenly dispersed. See photos below.
At this stage you can chill the dough, or bake immediately if you like thinner cookies. My recommendation is to cover the bowl with clingfilm and chill it for 20 to 30 minutes, which makes it easier to scoop the sticky dough. If chilling for an hour or longer, the dough will need to sit at room temperature before you are able to scoop it. Keep in mind the colder the dough, the puffier the cookies will be.
Line a baking tray (or two if you're baking in batches) with silicone baking mats.
Using a cookie scoop, drop equal-sized portions (1.5 tablespoons each) of the dough onto the baking tray, at least two inches apart. Sprinkle each one with the remaining sprinkles, or you could even roll it in sprinkles, whichever is easier.
Bake for 10 to 12 minutes until the cookies are lightly browned on the edges and still puffy in the middle, rotating the tray halfway through the baking time to ensure even browning. Very gently, press down on each cookie with the back of a spoon or a metal spatula to flatten further if you like. Alternately, gently but firmly bang the tray on the counter to help the cookies flatten. They will seem very soft at this stage, but it's the key to having soft and chewy cookies even after a few days, as they will naturally dry out once stored.
Allow the cookies to cool and firm up for 10 minutes, then transfer to a wire rack to cool completely. Store in an airtight tin at room temperature for 4 to 5 days. In the fridge, they'll last about 2 weeks and longer in the freezer. Happy baking!