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  • Other operating expenses

    Operating expenses are the expenses you incur in the everyday running of your business – such as office stationery, renting office premises, and salaries or wages. These expenses are sometimes called working or revenue expenses.

    You can generally claim a deduction for most operating expenses in the same income year you incur them.

    On this page:

    General business expenses

    Expenses that are common in business include:

    • advertising and sponsorship costs
    • bad debts
    • bank fees and charges
    • insurance premiums, including accident or disability, fire, burglary, professional indemnity, public risk, motor vehicle, loss of profits insurance, or workers’ compensation
    • interest on money borrowed for
      • income tax obligations, employer super contributions, or late payment or lodgment of tax
      • producing assessable income or purchasing income-producing assets
    • luxury car lease expenses
    • stationery expenses
    • costs for running a commercial website, such as site maintenance, content updates and internet service provider fees
    • parking fees (but not parking fines)
    • public relations expenses
    • legal expenses, such as those incurred defending future earnings, borrowing money, discharging a mortgage or obtaining tax advice
    • small-value items costing $100 or less
    • tender costs, even if the tender is unsuccessful
    • trading stock, including delivery charges
    • transport and freight expenses.

    Expenses similar to those claimed by employees

    Business expenses that are the same as those that employees can claim include:

    • union dues and periodical subscription fees to trade, business or professional associations
    • clothing expenses (corporate wardrobes and uniforms, and occupation-specific and protective clothing)
    • education, technical or professional qualification expenses
    • subscription costs for business or professional journals, information services, newspapers and magazines
    • costs for sunglasses, sunhats and sunscreen when your business activities require outdoor work.

    Cost of employing people

    Expenses that may occur because your business employs people include:

    • fringe benefits, including the cost of any fringe benefit provided and the fringe benefits tax on the benefit
    • travel expenses for relocating employees
    • losses due to misappropriation of money by an employee or agent such as fraud, theft or embezzlement.

    Your premises expenses

    Business premise expenses include:

    • electricity expenses
    • land tax on business premises
    • phone expenses
    • rates on business premises
    • renting or leasing a business premises
    • water expenses on business premises.

    Tax-related expenses

    Tax-related expenses include:

    • registered tax agent and accountant fees
    • tax-related expenses, such as
      • having a bookkeeper prepare your business records
      • preparing and lodging tax returns and business activity statements
      • objecting to or appealing against your assessment
      • attending an ATO audit
      • obtaining tax advice about your business
      • credit card/charge card payment fee (only for the purposes of paying a business tax liability, for example, GST liability).
    Last modified: 08 May 2018QC 33867