Tax Deductions for Tradies in Australia: What You Can Actually Claim (2026)

Tools and equipment used for work are tax-deductible. For eligible assets under the ATO's instant asset write-off threshold (which changes — check ato.gov.au for the current threshold), you can claim the full cost in the year of purchase. For assets above the threshold, you depreciate them over their effective life.

This applies to: power tools, hand tools, test equipment, measuring tools, safety equipment, work vehicles and trailers, ute fit-outs (canopies, drawers, toolboxes), laser levels, site equipment, and any other equipment used for work. If you bought it this financial year and use it for work, talk to your accountant about how to claim it.

Important: if you use a tool for both work and private purposes, you can only claim the work-use proportion. Most tradies who carry tools in their work ute use them almost exclusively for work — document this and claim accordingly. Small tools under $300 used exclusively for work can generally be claimed immediately regardless of the instant write-off threshold.

For most tradies, the vehicle is the second-largest claimable deduction after tools. The two methods:

Cents-per-kilometre: Claim a set rate per km (set by ATO annually) up to 5,000 km maximum. No receipts needed — but the cap means most tradies with high annual km will leave substantial money unclaimed. This method is better for employees with company cars or very low work km.

Logbook method: Keep a logbook for 12 consecutive weeks every 5 years. Calculate the percentage of total km driven for work purposes. Claim that percentage of ALL actual vehicle costs — fuel, registration, insurance, tyres, servicing, depreciation on vehicle cost. For a tradie driving 30,000+ km per year with 70%+ work use, this can represent $8,000–$20,000+ in annual deductions. The one-off effort of keeping a logbook for 12 weeks is trivially worth it.

Note: travel from home to a regular workplace is not deductible (it's considered private travel). Travel from home to a job site — where the job site is not your regular place of work — is deductible. Most tradies travelling to different job sites daily have strong logbook claims.

Work clothing is deductible when it is: (a) distinctive, occupation-specific clothing (high-vis vests, hard hats, safety glasses), (b) protective clothing required for the work (steel-cap boots, gloves, sun protection for outdoor workers), or (c) company-branded clothing with a logo. Plain khaki work pants, plain boots, and generic clothing are generally NOT deductible — even if you only wear them for work. The ATO's test is whether the clothing could be worn privately, not whether you choose to.

What's clearly deductible for tradies: steel-cap boots (AS/NZS 2210.3 compliant), high-visibility vests and shirts, hard hats, safety glasses and face shields, company-branded shirts and jackets with your business logo, sun protection garments specifically designed for outdoor workers.

Your mobile phone, tablet, and internet plan are deductible to the extent they're used for work. The method: keep one month's phone bill and calculate the work-use percentage (percentage of calls, data, and minutes used for work). Apply that percentage to the full year's cost. For most tradies, a 60–80% work-use figure is reasonable and defensible with a one-month usage diary.

If you have two phones — a personal phone and a work phone — and the work phone is exclusively for business, 100% of the work phone cost is deductible. Switching to a separate work phone and SIM is worth considering if your phone use is predominantly work-related and you want to simplify the calculation.

Software subscriptions used for work — Xero, ServiceM8, Tradify, Dext, job management apps, quoting tools, safety compliance apps — are fully deductible as business expenses. Keep a list of every subscription and ensure they're all claimed.

Training and education expenses are deductible when they maintain or improve the skills required for your current trade — not when they lead to a new career. For tradies, the following are clearly deductible: trade licence renewals and fees, safety training and certification (white card renewal, working at heights, confined spaces, first aid), industry association membership fees, technical CPD courses, on-site inductions and compliance training, and subscriptions to industry publications.

What's NOT deductible: the initial cost of qualifying as a tradesperson (apprenticeship costs and TAFE fees are not deductible because they're qualifying for a new career, not maintaining existing skills). Post-qualification courses are deductible; the original qualification isn't.

The ATO requires records to be kept for five years from the date you lodge your tax return. Records required for common tradie deductions:

• Tools & equipment: Original receipts or invoices, or bank/credit card statements
• Vehicle (logbook method): 12-week logbook showing work km, odometer reading at start and end of income year, all expense receipts (fuel, servicing, registration, insurance)
• Phone: One month's detailed bill showing work/private split; annual phone plan receipts
• Clothing: Receipts for compliant work clothing only (plain clothing not deductible)
• Training: Receipts and records of what the training related to

The practical solution: use Hubdoc or Dext to photograph and store receipts digitally. Connect it to Xero for automatic categorisation. Your bookkeeper has everything they need for BAS and tax time, and you've complied with record-keeping obligations without a shoebox of paper.