Things you need to know
You may be able to claim deductions for work-related expenses you incur in the course of your employment duties or while performing your work duties as an employee. You incur an expense in 2024–25 if you either:
- receive a bill or invoice for an expense that you're liable for (even if you pay it after 30 June 2025)
- don't receive a bill or invoice but you pay for the expense.
These expenses include:
- car expenses, including fuel costs and maintenance
- travel costs
- clothing expenses
- education expenses
- union fees
- home computer and phone expenses
- tools and equipment expenses
- journals and trade magazines.
Use the Employees guide for work expenses to help you as an employee to decide:
- whether your expenses are deductible
- what written evidence and other records you need to keep to show you incur the expense and how you work out your claim.
You may also be able to claim some deductions that aren't work-related expenses. They are:
- interest and dividend deductions for investments
- deductions for gifts and donations
- a deduction for the cost of managing your tax affairs.
For more information, see:
- Taxation Ruling TR 97/7 Income tax: section 8-1 – meaning of 'incurred' – timing of deductions
- Taxation Ruling TR 2020/1 Income tax: employees: deductions for work expenses under section 8-1 of the Income Tax Assessment Act 1997
Goods and services tax
If your expense includes an amount of goods and services tax (GST), the GST is part of the total expense and is therefore part of any deduction. For example, if you incur union fees of $440 which includes $40 GST, you claim a deduction for $440.
Foreign employment
If you receive a PAYG payment summary – foreign employment or have foreign employment payment information on your income statement, you claim deductions that you're eligible to claim for that income at questions D1 to D6, as relevant.
You must convert all foreign deduction claims to Australian dollars before you complete this question.
For more information on
- how to convert your foreign deductions, see Foreign exchange gains and losses
- exchange rates, see Foreign exchange rates.
Basic rules
You must incur the expense in 2024–25.
To claim a deduction for a work-related expense:
- you must spend the money yourself and not get a reimbursement
- the expense must directly relate to earning your income
- you must have a record to prove it (usually a receipt).
The expense must not be private, domestic or capital in nature. For example, the costs of normal travel to and from work, and buying lunch each day are private expenses.
If you incur an expense:
- that is both work-related and private or domestic in nature, you only claim a deduction for the work-related part
- that is capital in nature, you may be able to claim a deduction for the decline in value of the depreciating asset you acquire and use for work
- for services paid in advance, you need to work out what part of the expense is deductible in 2024–25.
You can't claim a deduction for an expense if any of the following apply:
- someone else pays for the expense
- someone has or will reimburse you for the expense
- the payment or reimbursement is a fringe benefit (including an exempt benefit).
If you receive a partial reimbursement for the expense, you can only claim a deduction for the part that you don’t receive a reimbursement for.
Record keeping for work-related expenses
When you claim a deduction, you need to keep records that show you incur the expense. Records are written evidence of your income or expenses, these can be either paper or electronic. You need to keep records that support the claims you make in your tax return.
You need to keep records for 5 years (in most cases) from the date you lodge your tax return.
Total work-related expenses more than $300
If the total amount of deductions you're claiming is more than $300, you must have written evidence (such as a receipt or invoice) to show you incur and don't receive a reimbursement for the expenses you claim.
The written evidence and records you keep must prove the total amount you claim, not just the amount over $300.
The $300 threshold doesn't include car expenses, meal allowance expenses, award transport payment expenses and travel allowance expenses. There are special written evidence rules for these claims which we explain at the relevant questions in the instructions.
Total work-related expenses $300 or less
If the total amount you're claiming is $300 or less, you need records (such as calendar entries or a spreadsheet) to be able to show how you work out your claims, but you don't need written evidence (such as receipts or invoices).
Advance expenditure
If you prepaid for a service costing $1,000 or more, and the service extends for a period of more than 12 months or beyond 30 June 2026 (such as a subscription to a journal relating to your profession), you can only claim the prepaid amount that relates to 2024–25. You can also claim the proportion of your pre-paid expenses from a previous income year that relate to 2024–25.
For help to work out deductions you can claim for expenses you incur for things to be done in a later income year, see Deductions for prepaid expenses 2025.
Allowances
If you receive an allowance that you show at question 2 in your tax return, you can claim a deduction for your expenses the allowance covers, but only if you:
- actually incur the expenses in producing your employment income
- meet the basic rules.
For example, if you receive a tools allowance of $500 and your tool expenses were $300:
- include the whole allowance of $500 at question 2 in your tax return
- you claim a deduction of $300 at question D5 if you have written evidence (such as a receipt for the purchase of the tools).
Decline in value of a depreciating asset
You may be able to claim a deduction for the decline in value of a depreciating asset you held during 2024–25 if you use it to produce income that you show in your tax return.
A depreciating asset is an asset that has an effective life and can reasonably be expected to decline in value over time. Depreciating assets include items such as tools, reference books, computers and office furniture.
Work out the decline in value of a depreciating asset using its effective life. You can either make your own estimate of its effective life or use the Commissioner's effective life determinations. For more information, see Effective life of an asset.
You may be able to claim an immediate deduction for the full cost of depreciating assets costing $300 or less if certain conditions are met.
Where to go next
- Go to D1 Work-related car expenses 2025.
- Return to main menu Individual tax return instructions 2025.
- Go back to Total income or loss 2025.