Tax Deductions Every Australian Tradie Should Know About

Tradies have a range of work-related expenses that may be legitimate tax deductions — but many miss out because they're unsure what's claimable, don't keep adequate records, or leave it until tax time to try to reconstruct everything.

This article covers the key deductions Australian tradies should know about. Tax treatment can depend on your circumstances and current ATO requirements, so treat this as general information. For advice specific to your situation, accountants for tradies in Burleigh Heads can help.

Tools and Equipment

Tools used for work are one of the most common — and most valuable — deductions for tradies. This includes hand tools, power tools, ladders, and specialist equipment for your trade.

How they're claimed depends on cost:

• Lower-cost tools may be deductible immediately
• More expensive tools may need to be depreciated over their effective life
• Tools that also serve a private purpose can only be partially claimed

Keep receipts for every tool purchase — date, amount, supplier, and description. The ATO can ask for evidence even years later.

Work Vehicles

Many tradies rely on a ute, van, or truck for their work. Vehicle expenses are deductible for the business-use portion, calculated using one of two methods:

Cents Per Kilometre

A set rate per business kilometre, up to 5,000 km per year. Simple, but may understate the deduction for high-use vehicles. You need to be able to show how you calculated the kilometres.

Logbook Method

A 12-week logbook establishes the business-use percentage, which is then applied to all actual vehicle costs — fuel, registration, insurance, servicing, tyres, and depreciation. This usually produces a larger deduction for vehicles with high business use. For a detailed guide, see our article on vehicle tax deductions for tradies.

Protective Clothing and Equipment

Protective gear required for your work is generally deductible:

• Steel-capped boots
• High-visibility vests and jackets
• Safety glasses and hearing protection
• Hard hats
• Work gloves

Standard work clothes that aren't protective — like a branded polo or standard work pants — are treated differently and may not be deductible. If in doubt, check with an accountant.

Training and Courses

Training directly related to your current work — tickets, licences, certifications, and skill upgrades — is generally deductible. This includes:

• Trade licences and renewals
• White card and other required certifications
• First aid courses required for your work
• Skills upgrades directly related to your trade

Training for a new career or unrelated qualification is generally not deductible.

Insurance

Insurance premiums for business-related cover are deductible:

• Public liability insurance
• Income protection (if held personally, treatment differs — seek advice)
• Tool insurance
• Vehicle insurance (business-use portion)
• Workers' compensation (if you employ staff)

Phone and Internet

If you use your phone and internet for work — calling clients, looking up specifications, receiving job details — the business-use portion is deductible. You need to be able to show how you calculated the percentage. A four-week usage log is the standard method.

Travel Between Sites

Travel between different job sites during the day is generally deductible. Travel between home and your regular depot or first job site is generally not (it's considered private).

If you carry bulky tools or equipment that can't be left at the workplace, there may be an argument for claiming home-to-work travel — but the rules are specific. Keep records and seek advice if this applies to you.

Other Business-Related Expenses

• Union fees and professional association memberships
• Work-related subscriptions and trade publications
• Bank fees on a business account
• Accounting and tax agent fees
• Stationery and small office supplies

Record Keeping: The Key to Legitimate Claims

Every deduction needs supporting records. The ATO requires receipts or other evidence showing the date, amount, supplier, and nature of each expense. Records must be kept for at least five years.

For tradies, the most effective approach is to use a vehicle logbook app and to photograph receipts as you receive them. Cloud accounting software can capture and categorise expenses throughout the year, making tax time far simpler. For more on this, see our article on moving from Excel to cloud accounting software.

Get Advice Specific to Your Situation

Not every tradie can claim every deduction listed here. Eligibility depends on your circumstances, how expenses are incurred, and current ATO rules. Working with an accountant who understands trades businesses ensures you claim what you're entitled to — and don't claim things that create compliance risk.

For tradies on the Gold Coast, accounting services in Burleigh Heads can provide tailored advice and handle your tax return preparation.

Frequently Asked Questions

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