This guide applies to the 2025-26 income year, being 1 July 2025 to 30 June 2026.
Tax deductions reduce your taxable income.
They do not reduce your tax payable dollar-for-dollar. A deduction only helps if it is allowable, correctly calculated and supported by records.
This page explains common deductions for individuals, employees, investors, sole traders and small business clients. Not every deduction applies to every person. The safest approach is to bring the record, explain the facts, and let us classify the claim correctly.
Golden Rules for Claiming Deductions
For work-related deductions, the ATO’s basic rules are:
You must have spent the money yourself and not been reimbursed.
The expense must directly relate to earning your income.
You must have a record to prove it.
If an expense is partly work-related and partly private, only the work-related portion can be claimed.
👨🏾💼 PRACTICAL WARNING You cannot claim a personal expense just because you used the item occasionally for work. For example, a personal mobile phone, internet plan, laptop, car, clothing item or travel cost must be apportioned if there is private use.
If the ATO reviews the claim, you need to show how the deduction was calculated. A receipt alone is not always enough.
💡 Better Practice
Use tools like the ATO’s myDeductions app or simply keep a folder (digital or physical) for all tax-related receipts through the year.
No automatic A$1,000 standard deduction for FY2026
There has been public discussion about a possible standard deduction for work-related expenses, but it does not apply to the 2025–26 tax return. For FY26, you still need proper records and a reasonable calculation for deductions claimed.
Work-Related Expenses
Work-related expenses are expenses you incur in earning your salary or wages.
Common categories include:
car and motor vehicle expenses;
travel and accommodation;
working from home;
uniforms and protective clothing;
tools and equipment;
phone and internet;
self-education;
union fees and professional memberships;
licences and checks;
seminars and training.
🌐 NOTE - Not every worker will have each of these, but use this as a guide to identify what you might be able to claim.
Car Expenses - Employees
This section applies where you use your own car for work as an employee.
🔍 Normal travel between home and your regular workplace is usually private and not deductible, even if you live far away, work outside normal hours, or carry ordinary work items.
You may be able to claim car expenses where you use your car:
to travel directly between separate workplaces;
to travel from your normal workplace to a client site;
to travel to meetings away from your usual workplace;
to travel between job sites;
to carry bulky tools or equipment where there is no secure storage at work;
for itinerant work, where your work requires you to travel from site to site.
There are two main methods for claiming employee car expenses.
Cents-per-Kilometre Method
For the 2025-26 income year, the cents-per-kilometre rate is 88 cents per work-related kilometre.
This method:
allows a maximum claim of 5,000 work-related kilometres per car;
does not require fuel receipts;
already includes running costs such as fuel, registration, insurance, servicing and depreciation;
still requires a reasonable basis for the kilometres claimed.
You must be able to show how you worked out your work-related kilometres. Examples include:
diary records;
calendar entries;
job sheets;
work rosters;
client appointment records;
delivery records;
addresses and kilometres travelled;
maps or route calculations.
Example - cents-per-kilometre method
Sarah used her own car to visit clients during the year. Her work diary shows 3,200 work-related kilometres.
Calculation: 3,200 km × A$0.88 = A$2,816
Sarah cannot also claim fuel, registration, insurance or depreciation for that same car under this method.
Logbook Method
The logbook method may give a better result where you have significant work-related car use, but the record-keeping is stricter.
You need:
a valid logbook kept for at least 12 continuous weeks;
odometer readings at the start and end of the logbook period;
total kilometres for the income year;
receipts or records for car expenses;
a reasonable business/work-use percentage;
evidence that the logbook period represents your normal pattern of use.
A valid logbook can generally be used for up to five years, provided your work-use pattern does not materially change. If your work changes, your job changes, your business changes, you buy a new car, or the vehicle use changes significantly, a new logbook may be needed.
Example - logbook method
Michael keeps a valid 12-week logbook.
During the logbook period:
total kilometres: 6,000 km
work-related kilometres: 3,900 km
Work-use percentage: 3,900 ÷ 6,000 = 65%
For the full year, Michael’s car expenses are:
Expense | Amount | |
|---|---|---|
Fuel / charging | A$3,200 | |
Registration | A$950 | |
Insurance | A$1,400 | |
Servicing and repairs | A$1,600 | |
Depreciation | A$4,000 | |
Total | A$11,150 |
Deduction: A$11,150 × 65% = A$7,247.50
Michael cannot also claim cents per kilometre for the same car.
No logbook? What can you claim?
If you do not have a valid logbook, you generally cannot use the logbook method.
For an employee car claim, the practical fallback is usually the cents-per-kilometre method, up to 5,000 work-related kilometres per car, provided you can explain and support the kilometres.
If you have:
Records available | Likely treatment | |
|---|---|---|
Valid logbook and expense records | Logbook method may be available | |
No logbook but reasonable work-km diary/calendar | Cents-per-kilometre method may be available | |
No logbook, no diary, no calendar, no evidence | Claim is high-risk and may need to be reduced or not claimed | |
Receipts only, but no work/private apportionment | Receipts alone are not enough for logbook method | |
Estimate only, with no basis | Not acceptable for a defensible claim |
👨🏾💼🚨 PRACTICAL WARNING A claim must be based on facts, not a refund target. If there is no diary, logbook, calendar, roster or work trip record, we may not be able to claim the amount you expect.
Travelling between workplaces?
Travel between separate workplaces may be deductible where the travel is part of your work duties.
Examples may include:
travelling from your employer’s office to a client site;
travelling between job sites;
travelling from one employer’s workplace directly to another employer’s workplace;
travelling to an off-site meeting during the workday.
Normal home-to-work travel is usually private and not deductible.
Parking & Tolls?
If you incur parking fees or road tolls while on work travel (not just parking at your normal work daily – that’s usually private unless your job involves moving to various sites), those are deductible. Keep receipts or log them.
A note on motorcycles or large vehicles
If you use a motorcycle or a vehicle heavier than 1 tonne (i.e., certain utes or vans) for work, the cents-per-km and logbook methods technically don’t apply. Instead, you claim actual expenses (fuel, maintenance, etc.) and need to keep all receipts, and ideally a log or diary of work use. We can work out an appropriate claim if this applies to you – but for most individuals, it’s about cars under 1 tonne which the above methods cover.
Home-to-work travel with bulky tools
Home-to-work travel may be deductible in limited cases where you are required to carry bulky tools or equipment.
The key points are:
the tools or equipment must be essential for your work;
the items must be genuinely bulky or difficult to transport;
there must be no secure storage at the workplace;
the travel must be because of the equipment, not merely because you choose to carry it.
A laptop bag, ordinary tools, paperwork or small work items will usually not be enough.
Example - Car Expense Scenario
Jenny is a sales rep who uses her personal car to visit clients across the city. She keeps a logbook and finds 40% of her 20,000 km annual driving is for work (the rest is personal). She incurs $10,000 in total car costs for the year (fuel, service, rego, insurance, depreciation).
Using the logbook method, she claims 40% = $4,000 as a deduction. She cannot claim fuel or service costs separately – it’s all in that $4,000.
Alternatively, if Jenny didn’t keep receipts, she could use the cents-per-km method and claim 5,000 km × $0.88 = $4,400 (if she indeed drove at least 5,000 work km).
In her case, cents-per-km gives a slightly higher deduction and is simpler, but she must be confident in how she arrived at 5,000 km (which she is, given her client logs). We’ll choose the best method when preparing her return.
Business Vehicle Expenses - Sole Traders and Small Business
If you are a sole trader or operate a small business, motor vehicle expenses can be deductible to the extent the vehicle is used in the business.
Depending on the vehicle and business structure, possible methods include:
cents-per-kilometre method;
logbook method;
actual cost method;
simplified depreciation or instant asset write-off, if eligible.
100% business use warning
Some clients say a vehicle is used 100% for business. That may be possible, but it must be supported by objective evidence.
A 100% business-use claim is difficult to justify where:
the vehicle is garaged at home;
the same vehicle is available for private or family use;
there is no second private vehicle;
the business income is low compared with the vehicle costs;
there are school, shopping, family or weekend trips;
there is no logbook or GPS/job record;
the business activity is occasional or part-time.
Low business income does not automatically deny a vehicle claim, but it does make the reasonableness of a large claim more important.
🔍🕵🏾♂️ Example - High-Risk Claim
A sole trader earns A$6,000 of business income for the year and buys a new vehicle. They claim 100% business use but keep no logbook, no diary and no job records.
This is not a defensible claim. At a minimum, we would need evidence showing how the vehicle was actually used and why there was no private use. Without that evidence, the claim must be reduced or not made.
Safer approach
Keep:
a 12-week logbook;
odometer readings;
job addresses;
invoices or appointment records;
fuel/charging records;
servicing records;
evidence of private vehicle availability, if claiming very high business use.
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Electric Vehicles and Home Charging
If you use an electric vehicle for work or business and charge it at home, special record-keeping applies.
For the 2025–26 income year, the ATO’s practical home-charging rate for eligible electric vehicle home charging is 4.20 cents per kilometre.
From the 2026–27 income year, the rate increases to 5.47 cents per kilometre.
To use the EV home-charging rate, you still need relevant records, such as:
odometer readings;
a valid logbook where required;
evidence you incurred home electricity costs;
records of commercial charging costs, if claimed separately;
petrol records for plug-in hybrid vehicles where relevant.
EV example
A client drives an EV for both work and private purposes.
For FY2026:
total kilometres: 18,000 km
home-charging rate: 4.20c/km
work/business use from logbook: 60%
Home-charging cost estimate: 18,000 × A$0.042 = A$756
Work/business portion: A$756 × 60% = A$453.60
This is only the home-charging electricity component. The overall motor vehicle claim still depends on the chosen method, records and private-use adjustment.
Depreciation for Cars, Tools and Equipment
Some assets are deductible immediately. Others must be depreciated over time.
For employees, work-related tools or equipment costing A$300 or less may generally be deductible immediately, provided the item is mainly used for work and is not part of a set or substantially identical items that together cost more than A$300.
Assets costing more than A$300 usually need to be depreciated.
Diminishing value method
Under the diminishing value method, the deduction is higher in the earlier years and lower in later years.
A simplified formula is: Asset cost × days held ÷ 365 × 200% ÷ effective life × taxable use percentage
The effective life depends on the type of asset.
Example - depreciating a work laptop
A client buys a laptop for A$1,800 on 1 January 2026 and uses it 70% for work. Assume the effective life used is 2 years.
Days held from 1 January 2026 to 30 June 2026: 181 days
Calculation: A$1,800 × 181 ÷ 365 × 200% ÷ 2 = A$892.60
Work-related portion: A$892.60 × 70% = A$624.82
Deduction for FY2026: A$624.82
The balance of the asset is then depreciated in later years, subject to continued work use.
Work-Related Travel and Accommodation
Travel and accommodation claims are a common ATO review area.
You may be able to claim work-related travel where you are required to travel away from your usual work location for work purposes.
Examples include:
flying interstate for a work conference;
staying overnight for a work project;
travelling to a temporary work site;
visiting clients away from your normal area;
attending training directly connected to your current work.
You cannot claim private travel, ordinary commuting, holidays, family travel, or costs reimbursed by your employer.
If your employer reimbursed the expense, you cannot claim it.
Example: You paid A$900 for accommodation and your employer reimbursed A$900. No deduction is available because you are not out of pocket.
If you received a travel allowance
A travel allowance does not automatically make the expense deductible.
You must still have:
a genuine work-related trip;
actual expenses incurred;
a connection to earning your employment income;
a reasonable calculation;
records where required.
The ATO publishes reasonable travel allowance amounts each year. These rates are mainly relevant for substantiation relief where the allowance rules are satisfied.
They are not a flat deduction and they are not an automatic entitlement.
If no travel allowance was paid
If no travel allowance was paid, you generally need actual records.
That means:
accommodation invoices;
flight records;
meal receipts;
taxi/Uber receipts;
parking and toll records;
conference or training registration;
employer direction or work purpose evidence;
travel diary where required.
You generally cannot use the ATO reasonable travel rates as a shortcut where no allowance was paid.
Travel diary requirement
If you are away from home for 6 or more consecutive nights, you generally need to keep a travel diary.
The diary should show:
where you were;
the dates and times;
what you were doing;
the work purpose;
any private component.
Where travel is partly private and partly work-related, only the work-related portion can be claimed.
Travel and accommodation record table
Situation | Can a deduction be claimed? | Records needed |
|---|---|---|
Employer reimburses the cost | No, not to the extent reimbursed | Keep reimbursement evidence |
Employee travels overnight for work and pays personally | Potentially yes | Receipts, itinerary, work purpose, travel diary if 6+ nights |
Employee receives travel allowance | Potentially yes, if allowance rules are met | Still need to show the trip occurred and expense was incurred; accommodation evidence may still be required |
Employee receives no allowance | Potentially yes | Actual receipts and evidence required |
Trip is mainly private with minor work activity | Only direct work portion, if any | Apportionment records |
Family accompanies the taxpayer | Family costs are private | Separate invoices or allocation |
Accommodation near normal workplace for convenience | Usually private | High-risk unless exceptional facts |
Meals while working normal day | Usually private | Not deductible unless specific overnight/overtime rules apply |
Overtime Meals
You may be able to claim an overtime meal expense where:
you worked overtime;
you received an overtime meal allowance under an industrial award, enterprise agreement or employment arrangement;
the allowance is included in your income;
you actually bought food or drink because of the overtime;
the claim is reasonable and supported where required.
For the 2025–26 income year, the reasonable overtime meal amount is A$38.65.
🕵🏾♂️🚨 IMPORTANT You cannot claim an overtime meal just because you worked late. You generally need to have received a qualifying overtime meal allowance and actually incurred the expense.
Reasonable travel and meal rates - how they are used?
The ATO’s reasonable amounts are set out each year in a Taxation Determination.
For FY2026, the relevant determination is TD 2025/4.
Category | What it covers | How to use it |
Overtime meal | Meal bought when working overtime and paid a qualifying allowance | FY2026 reasonable amount: A$38.65 |
Domestic travel meals | Breakfast, lunch and dinner while travelling overnight for work | Depends on destination, salary level and allowance rules |
Domestic accommodation | Accommodation while travelling overnight for work | Depends on location and allowance rules |
Incidentals | Minor incidental travel costs | Depends on destination and allowance rules |
Overseas travel | Meals and incidentals for overseas work travel | Depends on country/city and allowance rules |
These rates do not create a deduction by themselves. They are used only where the allowance and substantiation rules are satisfied.
Example: Work Trip
Raj, a software consultant, flew from Brisbane to Melbourne for a 3-day work conference in August 2024. He spent $400 on flights, $600 on hotel, and $150 on meals and taxis. His employer didn’t reimburse these (he paid on his personal card).
He can claim the $1,150 as deductions (meals are deductible because he was travelling overnight for work; had he just been out for the day in town, normal meals wouldn’t be). He kept all receipts and a note of the conference dates.
⚠️ Non-Deductible Travel
If your trip is mainly personal with a bit of work, generally you can only claim the expenses directly related to the work portion (e.g., you tack a holiday onto a work trip – only the days of the conference are claimable). And commuting from home to office, as stressed, is not claimable (unless the exceptions apply).
Work-Related Clothing and Laundry
The tax law is very specific about what clothing can be claimed. You can’t claim normal everyday clothes worn to work, even if your employer requires a certain color or style (i.e., black pants and white shirt for a retail worker – still conventional clothing).
What you can claim:
Uniforms
You may be able to claim a uniform where it is:
compulsory;
distinctive to your employer;
not conventional clothing;
has a logo or unique design;
or is a registered non-compulsory uniform.
A plain black shirt, black pants, business suit, white shirt or standard shoes are usually conventional clothing and not deductible.
Protective Clothing
You may be able to claim protective items that protect you from a real risk at work.
Examples include:
steel-cap boots;
hi-vis clothing;
hard hats;
safety glasses;
gloves;
fire-resistant clothing;
aprons;
masks or respirators;
sunscreen and sunglasses for outdoor workers;
non-slip shoes where required for safety.
The item must have protective qualities and be used for work.
Costumes for Performers
If you’re in an occupation like acting or entertainment and you buy costumes or stage-specific clothing, those can be deductible (they’re not daily wear).
Laundry & Dry-Cleaning
If the clothing itself is deductible, the laundry or dry-cleaning may also be deductible.
Keep records showing how you calculated the claim. If the claim is large, the ATO may expect a more detailed record of loads, dry-cleaning receipts or work pattern.
Example: Hi-Vis & Safety Shorts
A construction worker buys $200 worth of hi-vis shirts and safety shorts with company logo and spends $300 on steel-cap boots – these are deductible. They wash them separately twice a week (say ~100 loads/year × $1 = $100 laundry claim). On the other hand, an office worker required to wear business attire (suit) cannot claim those suits – they’re conventional clothing, even if only worn for work.
Working from Home Expenses
For FY2026, the fixed-rate method is 70 cents per hour.
The fixed-rate method covers:
electricity and gas;
home and mobile internet;
home and mobile phone usage;
stationery;
computer consumables.
You must keep records of the actual hours worked from home for the income year.
You cannot separately claim phone, internet, electricity or stationery again if those expenses are already covered by the fixed-rate method.
You may still be able to claim separate depreciation for work-related equipment, such as:
office chair;
desk;
computer;
monitor;
printer;
headset;
other eligible equipment.
👨🏾💼📝 Record checklist
Please keep:
a diary or timesheet of actual hours worked from home;
at least one electricity or gas bill;
internet bills;
phone bills, if relevant;
receipts for equipment;
details of any employer reimbursement.
Phone & Internet
Phone and internet claims must be apportioned between work and private use.
A reasonable claim may be based on:
itemised bills;
work call percentage;
data usage;
a four-week representative diary;
work-from-home pattern;
employer requirements.
If you are using the working-from-home fixed-rate method, phone and internet are already included in the 70c hourly rate. Do not double claim.
Tools & Equipment
You may be able to claim tools and equipment used for work.
Examples include:
trade tools;
toolboxes;
laptop or tablet;
printer;
software;
work bag;
stethoscope;
calculators;
safety equipment;
occupation-specific equipment.
Items costing A$300 or less may be deductible immediately where the rules are satisfied.
Items costing more than A$300 usually need to be depreciated over their effective life.
If the item is used partly privately, only the work-related portion is deductible.
Self-Education and Training Expenses
Self-education expenses may be deductible where the course has a sufficient connection to your current income-earning activities.
The course should:
maintain or improve skills used in your current work;
be likely to increase income in your current role or field;
be required by your employer or profession;
relate directly to your existing employment.
Self-education is generally not deductible where it:
helps you get a new job;
helps you start a new career;
is only generally related to work;
is undertaken before you start earning income in that field;
is for personal interest or general self-improvement.
Self-education example - Deductible
Angela is an architect and completes a project management course to improve skills used in her current role. Her employer supports the course because it helps her manage architectural projects.
She pays:
course fees: A$5,000
textbooks: A$800
work-related travel to training: A$211
Potential deduction: A$5,000 + A$800 + A$211 = A$6,011
This may be deductible because the course improves skills used in her current income-earning work.
Self-education example - Not Deductible
Brian works as an accountant but studies a coding bootcamp to move into software development.
Even if the course may help him earn income in the future, it is directed at a new career. It is not sufficiently connected to his current accounting income.
The course is not deductible against his current employment income.
Seminars, Conferences and Professional Development
You may be able to claim seminars, conferences and training courses where they are sufficiently connected to your current work.
Bring:
registration invoice;
program or agenda;
travel records;
accommodation receipts;
meal receipts;
employer approval or work purpose evidence;
notes showing the connection to your current duties.
If the trip includes private travel, family travel or holiday days, the claim must be apportioned.
Union Fees and Professional Memberships
Union fees and professional association memberships may be deductible where they relate to your current employment.
Examples may include:
union fees;
CPA or CA membership;
nursing association membership;
professional registration renewal;
industry body membership.
Joining fees, social club fees, fines, penalties and private memberships are generally not deductible.
Licences, Checks and Renewals
Renewal fees for licences, registrations or checks may be deductible where they are required to continue earning income in your current job.
Examples may include:
Blue Card renewal;
professional registration renewal;
trade licence renewal;
practising certificate renewal;
first aid renewal where required for work.
Initial licence or registration costs are often not deductible because they help you enter the occupation rather than continue in it.
First Aid Courses
If you are the designated first aid officer at work and pay for the course yourself, the course may be deductible.
If the course is private, general, or not connected to your current income-earning work, it may not be deductible.
Fines, Penalties and Strike Funds
Fines and penalties are generally not deductible.
This includes:
speeding fines;
parking fines;
court fines;
late licence penalties;
penalties imposed for breaches of law.
Strike fund contributions are also generally not deductible.
Other Common Work-Related Deductions
There are many potential deductions depending on your occupation and work arrangements.
Here are some of the most frequent ones:
Union Fees and Professional Memberships
Annual union fees, or membership fees to professional associations related to your job (for example, membership of a professional engineers’ society, CPA Australia for accountants, Australian Nursing & Midwifery Federation for nurses, etc.) are deductible . These are often shown on your income statement if your employer deducts them from pay, or you’ll have a receipt from the union. Note: Initiation fees or contributions to things like a strike fund are not deductible – only the regular membership fee. Fees for social clubs are not included.
Subscriptions and Journals
If you subscribe to trade or professional publications, journals, or online information services directly related to your work, that’s deductible. For example, a lawyer subscribing to a legal case database, a doctor subscribing to a medical journal, a finance worker paying for a premium financial news service. Similarly, buying reference books or industry magazines can be claimed if they relate to your current job.
🌐 Note
If you’re using the home office fixed rate (70c) method, phone and internet are already included in that rate . In that case, you shouldn’t also claim them separately (to avoid double-dipping) . We’ll ensure no duplication depending on which method you use for WFH.
Stationery and Office Supplies
Pens, notebooks, printer ink, paper, staplers – any consumables you buy for work (and aren’t reimbursed) are deductible. This is often small, but it adds up. Also, work-related software, apps, or cloud services subscriptions can be claimed (i.e., paying for a software license used in your job).
Conference & Seminar Fees
If you attend conferences, workshops, or seminars related to your profession (and you pay for it), that fee is deductible, plus travel as discussed. This could overlap with self-education or just be considered work training – either way it’s deductible if it’s about your current work.
Working with Children/Vulnerable Checks or Other Licenses
If your job requires a certification like a Blue Card (working with children check) or other licenses, renewal fees are deductible because they’re required to continue earning income . The initial application fee for a new license (or initial registration like a nurse’s first registration, a tradesperson’s first license) is usually not deductible , because it’s seen as allowing you to get a new job. But renewals to maintain your current employment are deductible. For instance, renewing your annual professional practicing certificate or license – yes deductible . First time you ever get it – not deductible.
Union Strike Pay Levy/Fines
Just to note, if you paid things like a strike fund contribution or any fines (for example, a fine for a late work-related license renewal), those are not deductible.
First Aid Courses
If you are designated first aid officer at work and you pay for the course, that can be deductible.
Personal Protective Equipment (PPE)
Beyond clothing, items like sunscreen, sunglasses, and hats can be claimed if you need them to protect from the sun at work (say you work outside all day) – they’re considered protection. Likewise, earplugs or safety equipment not provided by employer that you buy yourself for work.
Remote Area Travel or Trip Expenses
If your job required you to live away from home or travel to remote areas temporarily (not permanent relocation), some costs could be deductible (but often these are reimbursed or come with an allowance). We’ll handle these case by case.
Work-From-Home (WFH) Expenses
Not to repeat, but aside from the hourly rate method, if you choose to use the actual cost method for WFH, you’d claim portions of electricity, heating/cooling, cleaning, etc., based on a reasonable formula. We’ll discuss WFH in its own section next, as it’s a common and slightly complex area.
Investment-Related Deductions
If you earn investment income, some expenses may be deductible.
Examples include:
interest on investment loans
investment management fees
accounting fees for investment schedules
subscriptions for investment research
safe custody fees
income protection insurance
cost of managing tax affairs.
The expense must relate to earning assessable income.
Interest on Investment Loans
Interest on money borrowed to buy income-producing investments may be deductible.
Examples may include loans used to buy:
shares that pay dividends
managed funds
income-producing ETFs
units in trusts
other income-producing investments.
If the borrowing is used partly for private purposes, the interest must be apportioned.
Please provide the full loan statement and details of what the borrowed funds were used for.
Investment Management Fees
Ongoing fees for managing existing income-producing investments may be deductible.
However, fees for initial investment advice, setting up an investment, or buying a capital asset are generally capital in nature and may not be immediately deductible.
Fees relating to superannuation investments inside your super fund are usually not deductible to you personally.
Accounting or Advice Fees for Investments
You may be able to claim costs for managing your tax affairs, including:
tax return preparation fees
tax advice from a recognised tax adviser
dealing with the ATO
investment income schedule preparation
tax software used to prepare tax records.
Where an invoice covers multiple people or multiple entities, the fee may need to be split.
👨🏾💼🚨 New FY2026 warning - ATO Interest General interest charge and shortfall interest charge incurred on or after 1 July 2025 are not deductible.
Deductible Super Contributions
Personal super contributions may be deductible if the notice of intent rules are satisfied.
Please provide:
amount contributed;
date paid;
super fund name;
notice of intent to claim a deduction;
written acknowledgement from the super fund.
A deduction cannot be claimed unless the notice of intent requirements are validly completed.
Contribution caps and Division 293 tax may also need to be checked.
Income Protection Insurance
Premiums for income protection insurance may be deductible where the policy is held outside super and covers loss of income.
If the policy is held through super, or is bundled with life, TPD or trauma cover, part or all of the premium may not be deductible personally.
Please provide the annual premium statement and policy details.
Interest on Loans to Purchase Crypto or Other Investments
Interest on borrowings to buy crypto or other assets is complex.
If the asset does not produce assessable income and is held mainly for capital growth, the interest may not be immediately deductible and may instead be relevant to CGT cost base issues, depending on the facts.
If the crypto or asset produces assessable income, such as staking income, the treatment may be different.
Please provide the loan records, transaction history and income details so we can review the correct treatment.
Cost of Managing Tax Affairs
The fee you pay us (your tax agent) for this tax return next year will be deductible on your 2026 return. Also any tax-related books or software you purchase are deductible. For this year, you can claim what you paid for last year’s tax return preparation, or any other accounting fees you paid related to tax advice. The ATO allows a deduction for “Managing tax affairs” which includes things like travel to see your tax agent, paying for tax audit insurance, etc. We’ll include last year’s fee in your deductions if you were a client; if you’re new, bring the amount you paid your previous accountant or tax agent for last year’s return.
Donations
Donations of A$2 or more may be deductible if made to a deductible gift recipient.
You generally cannot claim:
raffle tickets;
fundraising dinners;
chocolates or merchandise;
school fundraising purchases;
GoFundMe or crowdfunding payments unless the recipient is a DGR;
donations where you receive a material personal benefit.
Please keep receipts or bank records.
Interest & Dividend Deductions
If you pay any fees to manage your shares (like a monthly fee for an online trading platform, or fees for a safe custody of stock certificates, etc.), those are deductible. If you paid for investment magazines or share market subscriptions, those can be claimed too (assuming the investments are producing income or expect to).
Rental Property Expenses
Rental property deductions are covered in more detail in our investment property guide.
Common deductible expenses may include:
interest on rental property loans
council rates
water rates
insurance
property management fees
repairs and maintenance
pest control
body corporate fees
advertising for tenants
depreciation
capital works deductions.
Capital improvements are not immediately deductible and may need to be claimed over time or included in the CGT cost base.
Please provide the annual rental statement, loan statements, invoices and depreciation schedule.
Crypto Investment Expenses
Crypto-related expenses need careful treatment.
Some costs may be deductible if they relate to earning assessable income. Other costs may form part of the CGT cost base or may not be deductible.
Examples requiring review include:
crypto tax software
portfolio tracking tools
exchange fees
gas fees
wallet fees
staking-related costs
DeFi transaction costs
NFT platform fees.
Please provide full transaction reports and invoices for crypto-related expenses.
Tax Offsets (Rebates)
Offsets directly reduce your tax payable. While not “deductions”, it’s worth mentioning a couple that individuals might have:
Low Income Tax Offset (LITO)
As noted earlier, if your taxable income is under $66,667, you’ll get some LITO automatically. The maximum is $700 for incomes $0–$37,500 (approx) and then it tapers. This is calculated by the ATO – you don’t need to do anything except lodge your return. It will show up on your notice of assessment.
Low and Middle Income Tax Offset (LMITO)
This extra offset of up to $1,500 was available in 2019-20, 2020-21, 2021-22 but has ceased and is not available for 2024-25 . Some taxpayers were unpleasantly surprised last year (and in 2023) when their refund was lower – that’s because LMITO ended. Just a heads up: don’t expect that extra boost this year either.
Senior and Pensioner Tax Offset (SAPTO)
If you are eligible (generally you or your spouse are of Age Pension age and meet certain income criteria), you could get an offset to reduce tax. The income thresholds for SAPTO also moved slightly with the tax cuts. For instance, a single senior with taxable income up to ~$34,000 gets max offset, and it cuts out completely around $52k . We’ll automatically calculate this if your birth date and income qualify – just ensure we have your correct date of birth and marital status.
Private Health Insurance Rebate / Medicare Surcharge
Not an “offset” you claim per se (and the rebate can be taken as reduced premiums through your insurer), but if you pay for private hospital cover, the government provides a rebate based on your income tier (which can reduce tax or increase refund). Conversely, if you earn over $90k single / $180k family and don’t have appropriate hospital cover, a Medicare Levy Surcharge of 1%–1.5% may apply. We will need your Private Health Insurance Statement to complete that section and apply any rebate or surcharge correctly.
Zone/Overseas Forces Offset
If you lived in a remote area or served overseas in forces, these still exist but are less common; we’ll check eligibility if applicable (requires specific conditions and often evidence of location/days).
Other Offsets
There are offsets for certain dependants (rare now, mostly phased out except perhaps a parent carer in some cases) and for net medical expenses (phased out except for disability aids or aged care expenses). Likely not applicable to most, but we’ll ask if any apply.
Final Reminder
A deduction is only useful if it is lawful, calculated correctly and supported by records.
Please bring any expense you are unsure about. We will review it and either claim it, apportion it, defer it, treat it as capital, or explain why it cannot be claimed.
It is better to ask before lodging than to claim an unsupported deduction and deal with an ATO review later.