It’s tax time again. One of the most common questions Australians ask is: “What can I actually claim on my tax return?”
The good news is that many work-related expenses can be claimed, helping you reduce your taxable income and potentially increase your tax refund. However, not every expense qualifies, and the Australian Taxation Office (ATO) has strict rules about what you can and cannot claim.
This updated guide explains the most common tax deductions available to Australian employees, sole traders, and small business owners.
The Three Golden Rules for Claiming Tax Deductions
Before claiming any deduction, you generally need to satisfy these three requirements:
- You spent the money yourself and weren’t reimbursed.
- The expense is directly related to earning your income.
- You have records to prove your claim, such as receipts, invoices, or bank statements.
If an expense is used for both work and personal purposes, you can usually only claim the work-related portion.
Common Tax Deductions for Employees
1. Working From Home Expenses
If you regularly work from home, you may be able to claim expenses including:
- Electricity
- Internet
- Phone usage
- Office stationery
- Computer equipment
- Office furniture
Depending on your circumstances, you may use the ATO’s applicable calculation method or claim actual expenses with appropriate records.
2. Vehicle and Travel Expenses
You may be able to claim vehicle expenses if you use your own car for work purposes, such as:
- Travelling between work sites
- Visiting clients
- Attending meetings
Generally, travel between your home and your regular workplace is not deductible, unless specific exceptions apply.
Potential vehicle expenses include:
- Fuel
- Registration
- Insurance
- Repairs and maintenance
- Depreciation
Keeping a logbook can help maximise legitimate claims.
3. Uniforms and Protective Clothing
You may be able to claim:
- Occupation-specific uniforms
- Protective clothing
- Safety boots
- High-visibility clothing
- Laundry costs for eligible uniforms
Everyday clothing, even if required by your employer, is generally not deductible.
4. Self-Education Expenses
Education expenses may be deductible if the course directly relates to your current employment and helps maintain or improve your skills.
Examples include:
- University fees (where eligible)
- Professional development courses
- Industry seminars
- Textbooks
- Course materials
Courses designed to help you change careers generally cannot be claimed.
5. Tools and Equipment
Employees may claim work-related tools and equipment, including:
- Laptops
- Computers
- Mobile phones
- Trade tools
- Software subscriptions
Higher-value assets may need to be claimed over several years through depreciation.
6. Union Fees and Professional Memberships
You may claim:
- Union membership fees
- Professional association fees
- Registration costs required for your profession
- Industry licences
These deductions are commonly available for professionals such as accountants, nurses, engineers, and tradespeople.
Tax Deductions for Sole Traders and Small Businesses
Business owners can generally claim expenses that are incurred in running their business.
Common deductions include:
Office Expenses
- Rent
- Utilities
- Internet
- Phone
- Office supplies
Marketing
- Website costs
- Google Ads
- Facebook advertising
- Business cards
- Printing
- Branding
Professional Services
- Accounting fees
- Legal advice
- Bookkeeping
- Business consulting
Insurance
- Professional indemnity insurance
- Public liability insurance
- Business insurance
Equipment
- Computers
- Printers
- Machinery
- Office furniture
- Business software
Depending on current tax rules, some assets may qualify for immediate deductions while others may need to be depreciated.
Home Office Deductions for Business Owners
If you operate your business from home, you may be able to claim a portion of:
- Mortgage interest (in limited circumstances)
- Rent
- Electricity
- Internet
- Cleaning
- Office furniture
- Office equipment
The amount you can claim depends on how much of your home is used for business purposes.
Investment Property Deductions
Property investors may be able to claim expenses including:
- Interest on investment loans
- Property management fees
- Council rates
- Water charges
- Repairs and maintenance
- Insurance
- Depreciation (where applicable)
Keeping accurate records throughout the year can make preparing your tax return much easier.
What You Cannot Claim
Some expenses are commonly misunderstood and are generally not deductible.
These include:
- Everyday clothing
- Personal groceries
- Fines and penalties
- Childcare costs
- Private travel
- Entertainment expenses (in many situations)
- Personal gym memberships (unless directly related to your occupation)
Attempting to claim personal expenses as work-related could result in your return being reviewed by the ATO.
Keep Good Records
Good record-keeping is one of the easiest ways to maximise your deductions while staying compliant.
Consider keeping:
- Digital receipts
- Bank statements
- Logbooks for vehicle use
- Work diaries
- Invoices
- Payroll records
- Mileage records
Many accounting apps now allow you to photograph receipts as you receive them, making tax time much simpler.
Frequently Asked Questions
Can I claim my mobile phone?
Yes, if you use your phone for work. If it’s used for both work and personal purposes, only the work-related portion can be claimed.
Can I claim internet expenses?
Yes, where your internet is used for earning your income. You can generally only claim the work-related percentage.
Can I claim my laptop?
If you purchased the laptop for work or business use, you may be entitled to claim a deduction. Depending on its cost and current tax rules, the deduction may be immediate or spread over several years.
What if I lose my receipts?
You should always try to keep receipts. In some situations, alternative evidence may be accepted, but maintaining proper records is the safest approach.
Need Help With Your Tax Return?
Every taxpayer’s situation is different, and claiming the right deductions can make a significant difference to your tax outcome. Whether you’re an employee, contractor, investor or business owner, professional tax advice can help ensure you claim everything you’re entitled to while remaining compliant with ATO requirements. If you’d like assistance with your 2026 tax return, contact me today. I’ll help you maximise your legitimate deductions, avoid common mistakes and lodge your return with confidence.
You can view the original blog here: https://medium.com/@timchawthorne/what-can-you-claim-on-tax-in-australia-updated-guide-650a44ff86d0