Details on claiming tradesperson expenses for:
- Tools and equipment
- Travel expenses
- Union and professional association fees
- Working from home expenses
You can claim a deduction for tools and equipment you use to perform your duties as a tradesperson or apprentice. For example, a toolbox or a power drill.
You can only claim a deduction for the work-related use of the item.
If a 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
- 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.
If you bought the tool or item of equipment part way through the year, you can only claim a deduction for decline in the value for the period of the income year that you own it. To work out your deduction use the Depreciation and capital allowances tool.
You can also claim a deduction for the cost of repairs to tools and equipment that you use for work purposes.
You can't claim a deduction for tools and equipment that your employer or a third party supplies for use.
If you're a new apprentice and you received government funded tools through your employer, you can't claim a deduction for the costs or decline in value of those tools.
Example: depreciating (no immediate deduction)
Anna needed a new set of 16 spanners for work. She couldn't afford the $352 cost for the complete set, so she bought them all individually throughout the income year.
Although they only cost $22 each, Anna can't claim an immediate deduction for the spanners. This is because they are part of a set she bought in the income year that cost more than $300.
Anna can claim a deduction for the decline in value of the set, which in the end cost $352.
If in a following income year, Anna breaks one of the spanners and has to buy a replacement, she'll be able to claim an immediate deduction for the replacement because it won’t be part of a set she bought in that year that cost more than $300.End of example
Example: effective life of an asset
Tal buys an electric hand tool set on 5 September for $1,500. He only uses the tool for work purposes.
He checks the ruling on the effective life of depreciating assets. The ruling says the effective life of electric hand tools is 5 years.
He works out the deduction for the decline in value of his tool set using the prime cost method, as follows:
(Asset cost × (days held ÷ 365) × (100% ÷ 5))
If Tal used the electric hand tool for private purposes as well, he would have to multiply the amount calculated using the formula above by the work-related use percentage.
Tal works out that he has held the tool for 300 days and calculates his deduction for the decline in value as:
$1,500 × (300÷ 365) × (100% ÷ 5) = $246
Tal can therefore claim $246 for the decline in value of his tool set in the first year. Using the same method, he will also be able to claim $300 per year in the following four years and $54 in the final (sixth) year.End of example
You can claim a deduction for travel expenses you incur when your work requires you to both:
- travel for work
- sleep away from your home overnight in the course of performing your employment duties.
Expenses you can claim include your accommodation, meals and expenses which are incidental to the travel (incidentals). For example, when you travel interstate to attend a work-related conference, seminar or training course.
You can't claim a deduction for travel expenses where you haven't incurred any expenses, because:
- you slept in accommodation your employer provides
- you eat meals your employer provides
- your employer or a third party reimburses you for any costs you incur.
You also can't claim a deduction if you are not required to sleep away from your home overnight in the course of performing your employment duties, for example if you fly interstate and return home the same day, or you choose to sleep near your workplace rather than returning home.
Receiving an allowance from your employer doesn't automatically mean you can claim a deduction. In all cases, you need to be able to show:
- you were away overnight
- you spent the money
- the travel directly relates to earning your employment income
- how you work out your claim.
If you receive a travel allowance you must include it as assessable income in your tax return unless all of the following apply:
- the travel allowance is not on your income statement or payment summary
- the travel allowance doesn't exceed the Commissioner's reasonable
- you spent the whole allowance on deductible accommodation, meal and incidental expenses (if applicable).
The Commissioner's reasonable amount is set each year. The amount is used to determine whether an exception from keeping written evidence applies for the following expenses which are covered by a travel allowance:
You don’t have to keep written evidence such as receipts if both of the following apply:
- you receive a travel allowance from your employer for the expenses
- your deduction is less than the Commissioner’s reasonable amount.
If you claim a deduction for more than the Commissioner’s reasonable amount you need to keep receipts for all expenses, not just for the amount over the Commissioner’s reasonable amount.
Even if you are not required to keep written evidence such as receipts, you must be able to explain your claim and show you spent the amounts. For example, show your work diary, that you received and correctly declared your travel allowance and bank statements.
Example: living away from home allowance
Joe is a carpenter. He lives in the city with his family and applied for a job to work on a large construction project near a country town for 12 months. He is paid a living-away-from-home allowance by the construction company to meet his accommodation and meal costs whilst working in the country town.
The allowance isn't income and shouldn't be shown on Joe's income statement. He can't claim a deduction for his accommodation and meal costs while living away for work. The expenses are private living expenses.End of example
Example: reasonable allowance amount
Antoni travels from Adelaide to Mt Gambier for a job, he is away from home for 5 nights. His employer pays him a travel allowance of $110 per night to cover his accommodation, meals and incidentals. The allowance isn't shown on his income statement.
The travel allowance amount paid to Antoni is less than the reasonable allowance amount and he spends all of the travel allowance on his travel expenses.
Antoni doesn't include his allowance on his tax return because:
- it isn't shown on his income statement
- it's less than the reasonable allowance amount
- he spends it all to cover his travel expenses.
This means Antoni can't claim a deduction for his expenses in his tax return.End of example
For more information, see TD 2022/10 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2022-23 income year?
You can claim a deduction for union and professional association fees you pay. You can use your income statement as evidence of the amount you pay if it's shown on there.
You may be able to claim a deduction for working from home expenses you incur as an employee. These can be additional running expenses such as electricity, the decline in value of equipment or furniture, phone and internet expenses. You must:
- use one of the methods set out by us to calculate your deduction
- keep the records required for the method you choose.
There are some expenses you can't claim a deduction for as an employee. Employees who work at home can't claim costs:
- for coffee, tea, milk and other general household items your employer may provide you at work
- for your children and their education including
- setting them up for online learning
- teaching them at home
- buying equipment such as iPads and desks
- your employer pays for or reimburses you for the expense
- for the decline in value of items provided by your employer – for example, a laptop or a phone.
Generally, as an employee, you can’t claim occupancy expenses (rent, rates, mortgage interest and house insurance premiums), unless your home office is both:
- your only place of work because no other work location is provided by your employer
- exclusively or almost exclusively used for work purposes.
You can’t claim a deduction if your employer paid for your home office to be set up or they reimbursed you for the expense.
The Home office expenses calculator helps you work out the amount you can claim as a deduction for home office expenses.
For more information, see
- PS LA 2001/6 Verification approaches for home office and electronic device expenses
- TR 93/30 Income tax: deductions for home office expenses
- PCG 2023/1 Claiming a deduction for additional running expenses incurred while working from home - ATO compliance approach
For more tradesperson expenses, see: