What Tax Deductions Can Australian Tradies Claim?
By Dan Reeve — Working handyman and founder of SMASH Invoices. Built SMASH after losing $1,200 in uninvoiced jobs in a single year. He still takes on handyman work and uses SMASH on every job. About Dan →
Australian sole trader tradies can claim tax deductions for: tools and equipment, vehicle expenses (logbook or cents-per-kilometre method), work clothing and PPE, phone and internet (business proportion), insurance, licensing fees, union fees, training costs, advertising, and invoicing software subscriptions. Most tradies miss $2,000–$5,000 in legitimate deductions annually by failing to keep receipts for materials and small tool purchases. Every dollar deducted reduces taxable income by that amount.
The full deductions list for trades businesses
Tools and equipment
- Hand tools and power tools
- Tool batteries and chargers
- Tool storage (toolboxes, van racking)
- Replacement blades, bits, and discs
- Equipment hired for jobs
- Safety equipment (hard hats, harnesses)
Note: Tools costing over $300 must be depreciated over their effective life, not claimed in full in year one. The instant asset write-off scheme has had varying thresholds, check current ATO rules.
Vehicle expenses
Two options, choose one and stick with it:
Logbook method: Keep a 12-week logbook recording business vs personal trips. Claim the business percentage of all vehicle costs: fuel, registration, insurance, maintenance, loan interest.
Cents per kilometre: Claim 88 cents per business kilometre (2024–25 rate) up to 5,000km per year. No logbook required.
Most tradies who drive frequently for work are better off with the logbook method, it typically captures a higher deduction.
Work clothing
- Branded uniforms with your logo
- Protective clothing (hi-vis, steel caps, rigger gloves)
- Wet weather gear used for work
Generic clothing (plain work shirts, jeans) is NOT deductible even if worn only for work.
Phone and internet
The work-use percentage of your phone and internet plan. If you use your phone 70% for work (calls, emails, job scheduling, invoicing), you claim 70% of the cost.
Insurance
- Public liability insurance
- Professional indemnity
- Vehicle insurance (work proportion)
- Income protection insurance (claimed separately in your personal return)
Licences, registrations, and memberships
- Trade licences (electrical, plumbing, building)
- Master Builders Association, Master Plumbers fees
- Union membership
- Industry association fees
Software subscriptions
- Invoicing apps (SMASH Invoices, MYOB, Xero)
- Job management software
- Accounting software
- Cloud storage used for business
Training and education
- Trade courses and certificates relevant to your current work
- First aid certificates
- Safety training (white card, confined space)
What most tradies miss
The biggest missed deductions are small and consistent:
Materials for jobs. Every bag of silicone, every tube of adhesive, every box of screws bought for a specific job is deductible. Without itemised invoices and receipts, these disappear. Tradies who invoice materials accurately also document their deductible costs.
Small tool purchases. A $40 drill bit set. A $25 extension lead. A $65 multimeter. Bought every year. Rarely claimed. Adds up to $200–$500 in missed deductions annually.
Phone and data. Most tradies underestimate their work usage. A tradie who uses their phone for calls, texts, job management apps, invoicing, and navigation is easily at 70–80% business use.
Frequently asked questions
Can Australian tradies claim the cost of safety boots? Yes. Safety boots (steel-capped, safety-rated) worn as a condition of work or for safety protection are deductible. Regular boots worn on site but not specifically required for safety protection may not be. Keep the receipt and note their work purpose.
Can I claim my ute or work vehicle if it's used personally too? Yes, using the logbook method. Keep a 12-week logbook recording every trip (date, destination, kilometres, purpose). Calculate the business percentage and apply it to all vehicle running costs for the year. The ATO accepts electronic logbooks.
Can I claim invoicing software as a tax deduction? Yes. Software subscriptions used for business purposes, including invoicing apps like SMASH Invoices, are deductible business expenses. At $14.99–$39.99/month, SMASH Invoices costs $179–$480 per year, fully deductible.
What records do I need to keep for tax deductions in Australia? The ATO requires receipts for all claims over $300. For claims under $300, you can often claim without a receipt if you can demonstrate the expense was work-related. Keep digital photos of receipts, the ATO accepts these. Cloud storage makes this simple.
What is the deadline for claiming tax deductions as a sole trader? Deductions are claimed in your annual tax return, due October 31 for self-lodgers. You can claim deductions for expenses incurred during the financial year (July 1 – June 30). Expenses from prior years cannot be backdated.
Every deduction needs a record. Every invoice is a record. Start Free →
Internal links: The EOFY invoicing checklist · What is a BAS?