If you're a tradie, find out what you can claim on your tax return.
If you're a tradie, what you can claim in your tax return depends on whether:
- you're an employee tradie, or
- you run a small business (sole trader, partnership, company or trust).
You can claim a deduction for expenses incurred as an employee tradie if:
- you spent the money yourself and were not reimbursed
- it was directly related to earning your income
- you have a record to prove it.
If your expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
For more information about what you can claim, see our occupation guides for tradies (PDF, 343KB)This link will download a file and construction workers (PDF, 311KB)This link will download a file.
You can claim a deduction for protective clothing or items that have features or functions to protect you from specific risks of injury or illness at work.
These may include:
- protective clothing and footwear (for example, hi-vis vests and steel-capped boots)
- protective and safety equipment as well as occupation health and safety equipment (for example, safety glasses, safety helmets and earmuffs, or sunscreen, sunhats and sunglasses where you are required to work outdoors).
You can claim a deduction for tools or equipment if you use them for work purposes.
- If you also use the tools or equipment for private purposes, you can only claim the work-related portion.
- If you bought the tool or item of equipment part way through the financial year, you can only claim a deduction for the portion of the year that you owned it.
- If the tools or equipment are supplied by your employer, another person, or you are reimbursed for the cost, you can’t claim a deduction.
If a tool or item of equipment is only used for work and:
- cost more than $300 – you can claim a deduction for the cost over a number of years (that is, depreciation or the decline in value)
- cost $300 or less – you can claim an immediate deduction for the whole cost.
If you buy an item for work that forms part of a set and the whole set costs more than $300 but the individual item costs less than $300, you can claim a deduction for the decline in value (depreciation) of the whole set. You can't claim an immediate deduction for each individual item. This is because the combined cost of the set is more than $300.
For example, if you buy a ratchet set for $350 you can only claim the decline in value of the set, even if you could buy each of the individual ratchets for less than $300 each. However, if in a later income year, you buy an additional socket to replace part of the set you have lost, you can claim the full cost of the socket if it costs less than $300.
For more information, see:
You may be able to claim the cost of trips between home and work when you carry bulky tools or equipment for work purposes. You can only claim a deduction for the cost of these trips if you meet all of the following conditions:
- The tools or equipment are essential for your employment duties.
- The tools or equipment are bulky (this means that because of the size and weight, they are awkward to transport and can only be transported conveniently by the use of a motor vehicle).
- There is no secure storage area for such items at the workplace location.
If you claim car expenses, you must either:
- keep a valid logbook to determine the percentage of work-related use of your car along with evidence of your car expenses (logbook method)
- calculate your work-related kilometres and be able to show that those kilometres were work related (cents per kilometre method – this is only available for claims up to 5,000 km).
Your vehicle is not considered to be a car if it is a vehicle that:
- has a carrying capacity of one tonne or more, such as a ute or panel van
- can transport 9 passengers or more, such as a minivan.
Claiming actual expenses
For these vehicles, you can claim the actual expenses that relate to your work travel. For example, if you use a vehicle with a carrying capacity of one tonne or more.
Examples of actual expenses include:
- repairs and servicing
- car loan interest
Keep records of all your actual expenses to prove your expense claims, as well as records that show how you have calculated your work travel as a percentage of your overall travel. While it is not a requirement to keep a logbook, it is the easiest way to show how you have calculated your work-related use of the vehicle.
You can't use the cents per kilometre method for vehicles that are not a car.
For more information on car expenses, see:
- Building and construction employees – income and work-related deductions
- Transport and travel expenses.
You may also be able to claim the cost of:
- permits, licences and services, such as a forklift or heavy vehicle permit (but you can’t claim the cost of getting and maintaining a private drivers licence)
- self-education expenses, such as upskilling that's directly related to your existing business
- your phone and internet.
Remember you can’t claim a deduction for the same expenses twice. For example, if you’re using the cents per kilometre method, you can’t claim car expenses such as rego, insurance, fuel, servicing, and depreciation separately as these expenses are included in this rate.
If you claim a tax deduction, you must have a receipt or other form of written evidence from the supplier and be able to show how you calculated your claims. Records can be electronic (for example, you can take a photo of your receipt, or use an app).
The receipt or other form of written evidence must show the:
- name of the supplier
- amount of the expense
- nature of the goods or services
- date the expense was paid
- date of the document.
Bank or credit card statements usually won’t contain this information.
You don’t have to get and keep a receipt for work-related expenses that are $10 or less, as long as your total claim for small expenses is $200 or less. You can still claim a deduction as long as you make a record of the small expenses. For example, you can make a record by writing in your diary. Your record should show what you purchased, when, where, and how much you spent. You can use this to show how you calculated your deduction if we request this information from you.
After you've lodged your tax return for the year, you must keep your records for a minimum of 5 years.
If you're claiming a deduction for the cost of a depreciating asset used for work, such as a laptop, you must keep both:
- purchase receipts
- a depreciation schedule or details of how you calculated your claim for decline in value, for 5 years following your final claim.
For more information on deductions and keeping records, see:
Generally, the best time to lodge your tax return is from late July to take advantage of the pre-fill information available in myTax (or with your tax agent).
Pre-fill information is the data we already have on our systems plus the information provided to us by third parties, including your employer, banks, government agencies and private health insurance providers.
If you wait for pre-filled information to be available before completing your tax return, all you have to do is review the information and add any missing details or update incorrect details. This way you're less likely to miss any income that you must include.
If you prefer to lodge sooner, you’ll need to ensure you declare all your income. This includes income from any cash jobs, the sharing economy, your second job, foreign sources and capital gains.
Tax time information
For more information on tax and superannuation changes that may impact you as an employee, see What's new for individuals.
You can claim a business tax deduction for most expenses from carrying on your business, as long as they are directly related to earning your assessable income.
To claim business expenses:
- the money must have been spent for your business (not a private expense)
- if it is for a mix of business and private use, you can only claim the portion that is related to your business
- you must have a record to prove it.
Operating expenses you may be able to claim include:
- drop sheets
- masking, gaffer or duct tape
- replacement belts for machines
- computer consumables (for example, printer ink)
- insurance (for example, public liability insurance, professional indemnity insurance and personal accident and illness insurance)
You can generally claim a deduction for the cost of:
- protective clothing (such as hi-vis vests and steel-capped boots)
- protective and safety equipment as well as occupation health and safety equipment (for example, safety glasses, safety helmets and earmuffs, or sunscreen, sunhats and sunglasses where you are required to work outdoors)
- items that protect you or your employees from safety hazards involved in performing work duties, for example, infection from COVID-19 or other transmissible diseases (such as hand sanitiser, sneeze or cough guards, face masks, gloves, other personal protective equipment, antibacterial wipes and other cleaning supplies used for business).
If you are buying depreciating assets for your small business, such as tools or machinery, you can immediately deduct the business portion of the cost of the asset under temporary full expensing (but you need to meet the eligibility criteria).
The temporary full expensing measure is available to businesses with an aggregated turnover under $5 billion.
The assets must be first held and first used or installed ready for use for a taxable purpose between 7:30 pm AEDT on 6 October 2020 and 30 June 2023.
Small businesses can immediately deduct the business portion of the cost of:
- an eligible new or second-hand depreciating asset
- improvements to an existing asset if the improvement costs are incurred between 7:30 pm AEDT on 6 October 2020 and 30 June 2023.
If you have a small business pool and choose the simplified depreciation rules, you must deduct the balance of your small business pool under temporary full expensing at the end of your income years ending between 6 October 2020 and 30 June 2023.
If you are claiming or opting out of temporary full expensing, you can also use the temporary full expensing tax return label guide to help you correctly complete the labels on your tax return.
If you are lodging previous year tax returns, you may be eligible to apply the instant asset write-off.
Examples of assets that you may be able to claim as an immediate deduction under temporary full expensing or instant asset write-off include:
- a car or ute
- electric sanders
- electric saws
- leaf blowers
- lawn mowers
- nail guns
- tool boxes
- work lights
- high-pressure water cleaners
- concrete mixers
- shelving and storage
- computers, laptops and tablets.
For more information, see Interaction of tax depreciation incentives.
A car limit applies to passenger vehicles (except a motorcycle or similar vehicle) designed to carry a load less than one tonne and fewer than 9 passengers. The car limit is:
- $60,733 for the 2021–22 income year
- $64,741 for the 2022–23 income year.
If you purchase a car for your business and the car limit applies, your deduction under temporary full expensing is limited to the business portion of the car limit. For example, if you use your vehicle for 75% business use, the total you can claim for the 2022–23 income year is 75% of $64,741 – which is $48,556.
For yearly car limits, see Car limit.
Motor vehicle expenses
Media: Motor vehicle expenses
https://tv.ato.gov.au/ato-tv/media?v=bd1bdiunpjejpxExternal Link (Duration: 00:58)
As a small business, you will be able to claim motor vehicle expenses to the extent the vehicle is used in carrying on your business. Your business structure and type of vehicle you drive can affect which method you should use to calculate your deductions.
For more information, see:
- Deductions for motor vehicle expenses
- Calculation methods for claiming business motor vehicle expenses.
Media: Record keeping
https://tv.ato.gov.au/ato-tv/media?v=bd1bdiunpjek4gExternal Link (Duration: 00:50)
You need to keep records that substantiate your business income and expenses.
Your records must:
- explain all transactions
- be in writing (electronic or paper)
- be kept for 5 years (some records may need to be kept longer).
Depending on your tax obligations, you may also need to keep records for GST, fuel tax credits and records relating to your employees and contractors.
You can keep your business records electronically or on paper, but keeping electronic records makes some tasks easier.
For more information, see Record keeping for business.
You need to lodge a tax return if you carry on a business, even if your business hasn't earnt any income. There’s no threshold for business income, so you need to lodge a tax return even if you only earn $1.
What you need to report and how you lodge your annual tax return for your business depends on your type of business entity.
Services and support
Find out about our range of tools and services that help make it easier for you to get your tax and superannuation right at:
Remember, you can also speak with a registered tax agent to help you with your tax.If you're a tradie, find out what you can claim on your tax return.