Tradie tax deductions: what to claim and how to prove it

Tradie tax deductions in Australia cover the work-related share of your tools, vehicle, work clothes and protective gear, phone and internet, and home-office admin time. The catch is the private-use split and your records. Get those right and the rest is straightforward. Your accountant confirms what applies to you.

Figures below are for the 2025-26 income year, the return most tradies are lodging now. This is general information for business owners; your accountant decides your situation.

The big buckets#

Nearly every tradie deduction falls into six buckets, and knowing them stops you missing money or inventing claims. The ATO's own guidance for tradies covers the same ground:

• Tools and equipment, from the impact driver to the trailer.

• Vehicle and travel, the work share only.

• Protective clothing and laundry, steel caps yes, everyday jeans no.

• Phone and internet, the work share of the bill.

• Home office and admin time, the quoting and invoicing hours at the kitchen table.

• Everything else: licences, association fees, insurance, training, sunscreen and sunnies for outdoor work.

A quick sorting table before the detail:

Tools and equipment, and the $20,000 write-off#

If your turnover is under $10 million, the instant asset write-off let you deduct the full cost of eligible assets under $20,000 each, first used or installed ready for use between 1 July 2025 and 30 June 2026. That applies per asset, so a $6,000 mower and a $4,000 trailer can both go in the same year. If you are GST registered the $20,000 test is on the GST-exclusive cost; if not, GST-inclusive.

Two warnings. First, the rule for gear you buy after 30 June 2026 is not settled: in the May 2026 Budget the government announced it would make the $20,000 threshold permanent from 1 July 2026, but as of July 2026 that change has not passed Parliament, and if it does not, the threshold falls back to $1,000. Check the ATO page or ask your accountant before a big purchase. Second, assets over the threshold are not lost, they are depreciated over time instead. Figures verified July 2026.

The ute, the car, and the trap of driving to work#

Vehicle claims come down to two methods, and one very common mistake. The cents-per-kilometre method pays 88 cents per business kilometre for 2025-26, capped at 5,000 km per car, so $4,400 tops. It is all-inclusive: no separate fuel, rego or insurance claim on top. If you drive more than that for work, keep a logbook and claim the work percentage of actual costs.

The mistake: ordinary travel from home to your regular workplace is private and not deductible, and this is the claim the ATO watches hardest. The exceptions are narrow: carrying bulky tools with no secure storage at the site, travelling between job sites during the day, or heading out to a client from your usual base. Driving to the same site every morning is not a deduction, no matter what the bloke at smoko reckons.

Work clothes, boots and the stuff you actually wear#

The line here is protection, not appearance. Protective and occupation-specific gear is claimable: steel caps, hi-vis, hard hats, gloves, safety glasses, and sun protection if you work outdoors. Ordinary clothes are not claimable even if you only ever wear them on site. The ATO does not care that the jeans died a paint-related death; they could be worn anywhere, so they are private.

Laundry for claimable work gear has flat rates: $1 per load when the load is work clothing only, 50 cents when it is mixed. Small numbers, but they add up across a year of hi-vis washes, and they are the easiest legitimate claim to forget.

Phone, internet and the home-office hours#

The work share of your phone and internet is claimable, and so are the admin hours at home. For the home side, the ATO's fixed rate method pays 70 cents per work hour for 2025-26, and it already covers phone, internet, electricity, gas and stationery. That means no double-dipping: if you use the fixed rate, you cannot also claim the phone bill separately. You can still separately depreciate a desk or a laptop.

Worth saying plainly: if your partner does the quoting, invoicing and chasing from the kitchen table, those are real work hours. Keep a record of them. The requirement is a record of actual hours worked, not an estimate made in July.

Records are the whole game#

Every claim above lives or dies on evidence: receipts, a logbook, hours noted as you go. The ATO's free myDeductions tool in the ATO app is a perfectly good place to keep receipts and trip records, and it costs nothing.

For the business side, keeping your invoices, quotes and job records in one place all year means tax time is an export, not an archaeology dig. That is what Chippie does: your jobs and invoices live together, so the income side of your return is a clean list to hand your accountant. To be straight about the boundary, Chippie holds your records; it does not give tax advice or decide what is claimable. That is your accountant's call. Clean invoices also feed your GST figures, which matters once you are registered for GST.

When to just ring your accountant#

A good accountant usually saves more than they cost, and the grey areas are exactly what they are for. Private-use percentages, whether to use cents-per-km or a logbook, business structure, and anything GST are all questions where a professional answer beats a forum answer. If this year's return involves your first employee, a new ute, or your first year over the GST threshold, book the appointment. The deductions in this guide are the homework that makes that meeting cheap and fast.

FAQ#

Can I claim my ute on tax in Australia? Yes, the work-related share, using either cents-per-kilometre (88c/km for 2025-26, capped at 5,000 km) or the logbook method for the work percentage of actual costs. Private use, including ordinary home-to-work driving, is excluded.

Can tradies claim tools without receipts? You need evidence for claims. There is limited tolerance for small amounts, but receipts are the rule, and the ATO can knock back anything you cannot substantiate. A photo of the receipt taken at the counter is enough.

Is driving from home to the job site tax deductible? Generally no, that is private travel. Narrow exceptions exist, such as carrying bulky tools with no secure storage at the site, or travelling between different sites during the day.

What is the instant asset write-off for tradies in 2025-26? Assets under $20,000 each, for businesses under $10 million turnover, first used or installed between 1 July 2025 and 30 June 2026. The government announced in the May 2026 Budget that the $20,000 threshold would become permanent from 1 July 2026, but that is not yet law as of July 2026, so check the ATO page before new purchases.

Can I claim my work boots and hi-vis? Yes. Protective and occupation-specific gear like steel caps, hi-vis and hard hats is claimable, plus laundry at the flat rates. Ordinary clothing is not, even if you only wear it for work.

The tradies who find tax time easy are the ones whose records were kept in February, not found in July. Chippie's free tier keeps your quotes, jobs and invoices in one place all year, free for one user.