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  • Tools, equipment and other assets

    You can claim a deduction for the cost of tools, equipment and other assets you use to help earn your employment income.

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    Media: Transporting bulky tools and equipment External Link(Duration: 00:52)

    Assets you can claim

    You can claim a deduction for tools, equipment and other assets if you use them to perform your work duties. The deduction you can claim depends on the cost of the asset.

    If you use the tools for both work and private purposes you can only claim for your work-related use of the item.

    If the tool or equipment cost you $300 or less, you can claim a deduction for the full amount in the year you buy it, if:

    • you use it mainly for work purposes (more than 50% of the time)
    • it's not part of a set that together cost more than $300.

    You can claim a deduction for the cost over the life of the item (that is, decline in value), if the tool or equipment:

    • cost more than $300
    • is part of a set that together cost more than $300.

    You can only claim a deduction for the work-related use of the item.

    You can’t claim a deduction for tools and equipment that your employer or a third party supplies for use.

    Examples of tools, equipment or assets

    You can claim a deduction for some or all of the cost of tools, equipment, assets or products you use to help earn your income. For example:

    • Calculators
    • Computers and software
    • Desks, chairs and desk lamps
    • Filing cabinets and bookshelves
    • Hand tools, such as spanners, hammers and screwdrivers or power tools, such as grinders, sanders and hammer drills.
    • Protective items, equipment and products, such as hard hats, safety glasses, sunglasses
    • Professional libraries
    • Safety equipment
    • Technical instruments.

    You can also claim the cost of repairing and insuring your tools and equipment and any interest on money you borrow to buy these items.

    If you use items for both personal and work-related purposes you need to keep records such as a diary to show the purpose of use of the item. This is so you can show how you work out the amount of personal and work-related use if we request it from you.

    Carry cases and bags

    You can claim a deduction for a bag or carry case you buy to carry items you need to use for your work. Bags and carry cases may include briefcases, laptop bags, luggage and handbags.

    Items you carry for work may include laptops, tools, client briefs and protective gear.

    Items don't include private and domestic items like gym gear, food or a personal phone or tablet.

    Your job must require you to transport work items and the bag must be suitable for that purpose. You can claim a deduction to the extent that you use the bag or similar for work purposes.

    If you use a bag or case to carry both work and private items, you need to apportion the expense between work-related and private use, and you can only claim the work-related portion.

    Where you use the bag for work purposes only and it costs:

    Example: allowable deduction for a handbag

    Elizabeth buys a handbag for $150 to carry her tablet and work diary between appointments with clients. The handbag is only used to carry the work items and she carries another bag for her personal items. She doesn't use the handbag that carries her tablet and work diary outside of work hours.

    As Elizabeth requires the tablet and diary to perform her work duties and she never uses the handbag outside of work hours, the bag is solely used for work purposes.

    Elizabeth can claim a deduction for the full cost of the handbag ($150) in the year that she buys it.

    End of example


    Example: no deduction is allowable for a satchel

    Arki buys a messenger satchel for $220 to carry his lunch and snacks, personal medical kit and private grooming items to work every day. He also uses it to carry a mini tablet, which he uses for private purposes.

    Although Arki carries the satchel to work every day, he only carries private items in it so the satchel isn't used for work purposes.

    Arki can't claim a deduction for the cost of the satchel.

    End of example


    Example: apportioned deduction for a handbag

    Theresa buys a large handbag for $280 to replace her current handbag, as she must now take a small laptop and client paperwork to and from work and to client meetings. She also uses her new handbag to carry personal items.

    Theresa works out she is using the new handbag 70% for work purposes.

    As the handbag cost less than $300 and is mainly being used for work purposes, the decline in value is the full cost of the bag. However, as Theresa is using the handbag for both work and private purposes, she would need to apportion her deduction between both uses.

    Theresa's works out her deduction as $196 ($280 × 70% work use).

    If Theresa uses her handbag less than 50% of the time for work purposes, she would need to work out her deduction for decline in value over the effective life, She would also need to apportion the deduction for her private use.

    End of example

    Calculate your deduction

    Use our depreciation and capital allowances tool to help you work out the deduction available from the depreciating asset.

    Keeping records for depreciating assets

    You must keep receipts for depreciating assets that show:

    • name of the supplier
    • cost of the asset
    • nature of the asset
    • date you acquire the asset
    • date of the document.

    You also need to be able to show:

    • The date you first started using the asset for work-related purposes.
    • The effective life of the asset (how long an asset can be used for).
    • How you worked out the effective life, if you have not adopted the effective life determined by us.
    • The method used to work out the decline in value.
    • How you work out your percentage of work use.

    For more information on general record keeping requirements and formats, see Records you need to keep.

    You can use the myDeductions tool in the ATO app to record your expenses or upload a photo of receipts or invoices.

    Last modified: 22 Aug 2022QC 31938