Income and deductions for small business

Expenses you can claim in the income year you incur them

Working or operating expenses you incur for the everyday running of your business are called revenue expenses. Revenue expenses can include office stationery, rent of office premises, and salary or wages. You can generally claim a deduction for these expenses in the year you incur them.

You can claim a deduction for most expenses you incur for the everyday running of your business in the same income year you incur them. These include expenses you incur, such as:

advertising/sponsorship expenses
bad debts
bank fees and charges
business motor vehicle expenses
business operating expenses
business travel expenses
clothing (corporate wardrobes and uniforms, occupation-specific clothing, protective clothing) expenses
education, technical or professional qualification expenses
electricity costs
fringe benefits - the cost of any fringe benefit provided and fringe benefits tax on the benefit
home office expenses where the home is used as business premises
insurance premiums, including workers' compensation, fire, burglary, professional indemnity, public risk, motor vehicle, loss of profits
interest on money you borrowed

for income tax
for employer super contributions
for late payment or lodgment of tax
to produce assessable income
to purchase income producing assets

land tax on business premises
legal expenses, such as those you incur to defend future income earning, borrow money, discharge a mortgage, or obtaining tax advice
losses from a previous year
luxury car lease expenses
office stationery
costs for operating a commercial website, such as site maintenance, content updating, internet service provider fees
parking fees
advertising or public relations costs
phone expenses
rates on business premises
registered tax agent/accountant fees
rent or lease of business premises
repairs and maintenance of income producing property
costs for replacing income producing property costing $300 or less
salary, wages, bonuses or allowances paid
subscription costs for business or professional journals, information services, newspapers and magazines
costs for sunglasses, sunhats and sunscreen where your activities entail working outside
super contributions
tax preparation costs, such as income tax or GST
tender costs, even if the tender is unsuccessful
costs for trading stock, including delivery charges
transport and freight expenses
travel expenses related to relocating employees
union dues and periodical subscription fees to trade, business or professional associations
water rates on business premises.

Sections within Working out your allowable deductions

Last Modified: Tuesday, 4 October 2011