Tools and equipment to perform your work

Deductions for tools or instruments you use for work, including the cost of repairs and insurance.

Last updated 15 June 2025

Eligibility to claim tool and equipment expenses

To claim a deduction for tools and equipment expenses you must:

use the items to perform your work duties
work out if you can claim the cost of the item in the income year you buy it or the decline in value over its effective life
have a record of your expenses and use of the items.

When you use the items for both private and work purposes, you need to apportion your deduction. You can only claim the work-related use of the item as a deduction.

You can also claim a deduction for the work-related portion of:

costs you incur to repair and insure your tools and equipment
interest expenses you incur on money you borrow to buy these items.

What you can't claim

You can't claim a deduction for:

your use of the tools or equipment for private purposes
expenses for tools and equipment that someone else supplies for your use.

Types of tools and equipment you can claim

You can claim the cost of tools and equipment that you use for work, such as:

hand tools – for example, spanners, hammers and screwdrivers
power tools – for example, grinders, sanders and hammer drills
calculators
cameras
musical instruments
safety equipment – for example, a hard hat or steel cap boots
technical instruments
electric clippers and scissors
phones and other devices
computers, laptops and software
bags and cases
stationery and office supplies
office furniture and equipment.

This is not an exhaustive list of items or equipment you use for work.

How to calculate your tools and equipment deduction

Tools and equipment are generally depreciating assets that decline in value over time. How you work out your deduction will depend on if the item cost:

$300 or less
More than $300

You need to apportion your deduction if you use the item for both work and private purposes.

You claim the deduction in your tax return as other work-related expenses. For instructions on how to complete your tax return, see Instructions to complete your tax return.

$300 or less

An immediate deduction is available for a depreciating asset if:

it cost $300 or less
you use it mainly to produce non-business assessable income
it isn't part of a set that cost more than $300
it isn't one of a number of items that are identical or almost identical costing more than $300

You must satisfy the conditions of all 4 tests to claim an immediate deduction.

If you can't claim an immediate deduction, you can claim a deduction for the decline in value of the depreciating asset.

Example: tools costing less than $300

Delia is a violinist in an orchestra and requires a new bow for performances. The new bow costs $200. Delia keeps a copy of the receipt, that shows the cost of the bow and where and when she bought it.

Delia only uses this bow for performances with the orchestra.

Delia can claim an immediate deduction for the full cost of the new bow as:

it cost less than $300
the bow is required to carry out her work-related duties
the bow is only used for earning employment income
she has records as evidence she incurred the cost.

End of example

More than $300

You can claim a deduction for the decline in value over the effective life of the depreciating asset, if the item:

cost more than $300
forms part of a set that together cost more than $300
is identical, or substantially identical to, other items that together cost more than $300.

Example: decline in value for a set of tools costing more than $300

Sammy is an employee mechanic and needs a spanner set for working on cars.

Each spanner costs $22 and can be bought individually. There are 16 spanners in the set costing a total of $352.

Sammy buys one spanner each fortnight of the income year starting in August.

As the spanners are part of a set costing more than $300 in total, Sammy can claim a deduction for the decline in value of the set.

End of example

Calculating your claim

Work out your claim for the decline in value for a depreciating asset using our Depreciation and capital allowances tool below.

Depreciation and capital allowances tool

You can manually calculate the decline in value of a depreciating asset using either the prime cost method or diminishing value method.

Keeping records for tools and equipment

You must keep records to support your claim for work use of tools and equipment, such as:

written evidence (such as receipts) for items you buy
information about how the item is used by you in carrying out your employment duties
a record (such as a diary note) that shows how you work out your percentage of work-related use.

If you are claiming the decline in value of an asset, you also need to keep records that show how you calculated decline in value.

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

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