Tax Deductions for Tradies: What You Can Claim in Australia
Tax time is one of the most expensive and stressful parts of running a trade business — but only if you're not claiming everything you're entitled to. Most tradies leave money on the table every year, not because they're doing anything wrong, but because they don't know what's claimable. Here's a practical guide to the main tax deductions available to Australian tradies in 2025–26.
1. Tools and Equipment
Tools and equipment used for work are deductible. How you claim them depends on the cost:
This includes hand tools, power tools, test equipment, safety gear, ladders, compressors, and any equipment you use on the job.
Keep receipts. If you buy tools partly for personal use, you can only claim the work-use percentage.
2. Vehicle Expenses
Your work vehicle is one of your biggest deductions. You can claim:
Two methods for claiming:
| Method | How it works | Best for |
|---|---|---|
| Logbook method | Keep a 12-week logbook to establish your work-use %, then apply it to all vehicle costs | High work use — typically wins |
| Cents per km | 67 cents/km in 2024–25, capped at 5,000km. No logbook required. | Low mileage / simple claims |
3. Work Clothing and PPE
You can claim clothing that is:
You cannot claim plain work boots, generic jeans, or plain polo shirts — even if you only wear them for work. Laundry costs for claimable work clothing are also deductible.
4. Phone and Internet
If you use your phone and internet for work, you can claim the work-use percentage. For most tradies, this is 50–80% of their phone bill.
Keep records to support your claim — a month of call logs showing work vs personal use is usually enough to establish the percentage.
5. Licenses, Registrations, and Memberships
Deductible if required for your trade or business:
6. Insurance Premiums
Business-related insurance premiums are deductible:
7. Software and Subscriptions
Any software used to run your business is deductible:
8. Training and Education
Training directly related to your current trade or business is deductible:
Note: courses to qualify for a new trade are generally not deductible — only those that maintain or improve skills in your current work.
9. Home Office
If you do admin work from home — quoting, invoicing, scheduling, bookkeeping — you can claim a portion of home running costs:
Keep a record of hours worked from home.
10. Interest on Business Loans
If you've financed tools, a vehicle, or equipment for the business, the interest portion of those loan repayments is deductible. The principal repayment is not.
11. Accountant and Bookkeeping Fees
The cost of your tax agent, accountant, or bookkeeper for business-related work is fully deductible. This includes the cost of preparing your tax return and BAS.
What You Can't Claim
Common mistakes to avoid:
Record Keeping
The ATO requires you to keep records for 5 years. For most deductions, you need a receipt, invoice, or bank statement. Apps like your job management software, accounting software, or even a folder of photos of receipts in your phone are all acceptable.
A good accountant will save you more than they cost — but they can only work with the records you give them.
- ✓ Tools, equipment, and your vehicle are your biggest deductions — claim everything and keep receipts
- ✓ The logbook method for vehicles typically returns higher deductions than cents per kilometre
- ✓ PPE and trade-specific clothing is claimable; generic workwear is not
- ✓ Software, phone, internet, insurance, and training are all deductible at their work-use percentage
- ✓ Keep records for 5 years and use a registered tax agent who works with trade businesses
Most tradies claim less than they're entitled to. Get your records in order and let your accountant do the rest.
Trade Track tracks every job, quote, and invoice in one place — so when your accountant asks, the records are already there.
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