Claiming everything you're entitled to is one of the simplest ways to reduce your tax — but only if the claim is genuine and you can back it up. Here's a plain-English look at the deductions individuals most commonly claim in Australia, and the rules that decide whether a claim will stand.
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The three rules every claim must meet
Before claiming any work-related expense, check it against these three tests. All three must be true:
- You spent the money yourself and weren't reimbursed by your employer.
- The expense directly relates to earning your income (not a private cost).
- You have a record to prove it — usually a receipt or invoice.
If something is used for both work and private purposes — a mobile phone, say — you can generally claim only the work-related portion.
Common work-related expenses
- Car and travel — trips between work sites, to clients, or to meetings (but not your normal commute from home to work). Cars are usually claimed using either the cents-per-kilometre method or a logbook.
- Uniforms and protective clothing — compulsory or occupation-specific uniforms, protective gear and safety equipment, plus their laundry. Everyday clothes aren't deductible, even if you only wear them for work.
- Tools and equipment — items you need for your job; larger items may be claimed over time through depreciation.
- Self-education and training — courses that directly relate to your current job.
- Phone and internet — the work-related share of your bills.
- Union fees and professional memberships — subscriptions relevant to earning your income.
Working from home
If you work from home and pay additional running costs (electricity, internet, phone, stationery), you may be able to claim them. The ATO provides two methods:
- a fixed-rate method — a set amount per hour worked from home, which bundles several running costs together; and
- an actual-cost method — you claim the real work-related portion of each expense.
Each method has its own record-keeping rules, and the better option depends on your situation. We'll calculate both and use whichever leaves you better off.
Other deductions people often miss
- Donations of $2 or more to registered deductible gift recipients (DGRs).
- Cost of managing your tax affairs — including fees paid to a registered tax agent (claimed the following year).
- Income protection insurance premiums (where the policy is held outside super).
- Personal super contributions you make and claim as a deduction (conditions apply).
- Investment and rental property costs — interest, agent fees, repairs and other expenses linked to earning investment income.
What you generally can't claim
- Private or domestic costs — everyday clothing, childcare, or your normal home-to-work commute.
- Expenses your employer already reimbursed.
- Anything you can't substantiate with a record.
Records to keep
Keep written evidence — receipts, invoices, bank or card statements, and logbooks where relevant — and hold onto them for five years from the date you lodge. Good records are the difference between a claim that stands and one that's disallowed if the ATO asks.
Frequently asked
What are the rules for claiming a deduction?
Three things must be true: you spent the money yourself and weren't reimbursed; the expense directly relates to earning your income; and you have a record to prove it. Mixed-use items are claimed at the work-related portion only.
Can I claim working-from-home expenses?
Yes, if you work from home and incur additional running costs. There's a fixed-rate method (a set amount per hour) and an actual-cost method — each with its own records. We'll use whichever gives you the better result.
Can I claim the cost of a tax agent?
Yes — fees for managing your tax affairs, including a registered tax agent's fee, are generally deductible in the following year's return.
Do I need receipts?
Generally yes, and you should keep records for five years. Some methods, like cents-per-kilometre for cars, don't need receipts but do require reasonable records of how you worked out the amount.