Tradies can claim tax deductions for tools and equipment, work vehicle and travel costs, protective clothing and boots, union and licence fees, phone and internet used for work, and self-education related to their trade. Keeping receipts and a logbook is the key to claiming everything you are entitled to. If the ute is registered to someone else but you paid for it, our guide on claiming vehicle expenses when the rego is not in your name explains where you stand.

Most tradies overpay tax — not because they’re doing anything wrong, but because they don’t know what they’re entitled to claim. The ATO allows a wide range of deductions for trade workers and self-employed tradies, but you have to know what they are and keep the records to back them up.

Whether you’re a plumber, electrician, carpenter, concreter, painter, HVAC technician, or any other kind of trade worker, there are deductions that apply specifically to your occupation — and in a lot of cases, the difference between a well-prepared tax return and a poorly prepared one runs into the thousands of dollars.

In this guide, I’ll walk through every major deduction tradies can claim in Australia, how to record them properly, and a few traps that catch people out. If you want to make sure your tax return is capturing everything you’re entitled to, our tax planning service is a good place to start.

Tools and Equipment

Tools are one of the most straightforward deductions for tradies, but there’s an important split depending on the cost of the item:

• Tools costing $300 or less: Claim the full cost in the year you buy them — no depreciation schedule required.
• Tools costing over $300: Normally depreciated over the effective life of the asset. However, if your business qualifies for the instant asset write-off (currently a permanent $20,000 threshold for small businesses), you can write off tools up to $20,000 immediately in the year of purchase.

The $20,000 instant asset write-off is now a permanent feature of the tax law for eligible small businesses — read our detailed guide on the $20,000 instant asset write-off for the specific eligibility rules and thresholds.

Claimable tool expenses include: power tools, hand tools, measuring devices, levels, tool bags and cases, drill bits and consumable blades (immediate deduction regardless of cost), safety equipment, ladders, and specialised trade equipment.

Keep your invoices or receipts for everything. For tools bought from a hardware store, a credit card statement alone is not sufficient — you need a receipt showing what was purchased.

Motor Vehicle and Travel Expenses

For most tradies, the vehicle is the single biggest deduction on the return — and it’s also the area where the most mistakes are made.

What travel is deductible?

You can claim vehicle expenses for travel:

• Between job sites
• From a job site to a supplier, hardware store, or client meeting
• To pick up materials or deliver equipment
• From home to the first job site — only if your home is your genuine base of operations (you have tools or equipment stored at home that are regularly required at the worksite, and your home is the starting point of your work)

Home-to-work travel in the traditional sense — driving from home to a fixed workplace — is not deductible. But for many tradies who load their ute from home each morning with tools and materials, and who don’t have a fixed office or yard, the home can be considered a base of operations, making that first and last leg of the day deductible.

Which calculation method?

There are two methods for calculating vehicle deductions:

• Logbook method: You keep a logbook for a minimum of 12 consecutive weeks, recording every trip (date, destination, purpose, kilometres). The percentage of work-related kilometres then applies to all car running costs — fuel, registration, insurance, loan interest, depreciation. This method produces the correct deduction based on actual use.
• Cents per kilometre method: You claim a flat rate (88 cents per km in 2025–26) for up to 5,000 business kilometres per year. Simple, but capped at $4,400 — which for most tradies who drive heavily is far less than actual expenses.

For most tradies who use their vehicle heavily for work, the logbook method produces a substantially higher deduction. Our full guide on how to claim motor vehicle expenses on tax in Australia covers both methods in detail, including what a valid logbook looks like.

If you have a ute, van, or other vehicle used primarily for work, and the private use is genuinely minimal, the actual cost approach via logbook will almost always beat cents per kilometre.

Work Clothing and Personal Protective Equipment

You can claim the cost of purchasing and laundering clothing that is:

• Occupation-specific: Hi-vis shirts and vests, steel-capped boots, hard hats, safety helmets — items that are distinctive to your trade and not suitable for everyday wear.
• Protective: Safety glasses, ear protection, respirators, leather gloves, knee pads, cut-resistant sleeves.

What you cannot claim: conventional work clothes — generic shorts, plain polo shirts, or standard boots — even if you only wear them for work. The ATO’s test is whether the clothing is “distinctive” to the trade and not adaptable to general use. A branded uniform with your business logo is deductible; plain black work pants are not.

For laundry: the ATO allows $1 per load for work-specific clothing (or 50 cents if washed with other items). You can claim up to $150 without written evidence — for amounts above $150, you need to document your claim methodology.

Phone, Internet and Technology

If you use your mobile phone for work — calling clients, ordering materials, using job management apps, sending quotes — you can claim the work-use proportion of your phone bill.

The ATO requires you to estimate the work-use percentage based on actual usage. A common approach is to review one month’s bill in detail, categorise each call or data activity as work or private, calculate the percentage, and apply that to the full year. Document your methodology — if the ATO asks, you need to show how you arrived at your figure.

The same applies to your internet connection if you use it for work purposes: submitting quotes, invoicing clients, ordering supplies online, or running business software.

Note: if your business purchases a laptop, tablet, or smartphone primarily for work use, this can also qualify for the instant asset write-off if under $20,000 — or the FBT-exempt device provision if it’s provided by a company to an employee (one device per category per year).

Training, Licences and Registrations

Training costs directly related to your current trade are deductible. This includes:

• Licence renewals (electrical licence, plumbing licence, builder’s registration)
• White card (Construction Induction Card) — deductible if required to continue working in construction
• Working at heights certification, confined spaces, first aid renewal
• Trade-related short courses and CPD (continuing professional development)
• Union fees and professional membership subscriptions

What you cannot claim: training costs that qualify you for a completely new trade or occupation. If you’re an electrician who pays for a plumbing course to change careers, that’s not deductible — it qualifies you for a new income-earning activity, not your existing one.

Home Office Deductions

If you run the administrative side of your business from home — preparing quotes, invoicing, scheduling, doing your BAS — you may be able to claim a home office deduction.

From 1 July 2022, the ATO revised the fixed rate method for home office deductions. The current rate is 70 cents per hour for the 2024–25 and 2025–26 income years. This covers electricity, internet, stationery, and similar expenses. You still need to keep a diary or record of your actual hours worked at home.

If you run your trade business from a dedicated space at home (a shed, workshop, or home office), you may be able to claim a proportion of occupancy costs (rent/mortgage interest, council rates, building insurance) on top of the 70 cents per hour rate. This is more complex and requires advice specific to your situation.

Other Business Expenses

Beyond the major categories above, tradies and trade business owners can also claim:

• Insurance premiums: Public liability, income protection, tool insurance, professional indemnity
• Accounting and tax agent fees: The cost of preparing your tax return and managing your BAS is deductible
• Subcontractor costs: If you engage subbies on your jobs, their invoices are a deductible business expense
• Advertising: Google ads, website costs, flyer printing, any marketing spend
• Subscription software: Job management apps (ServiceM8, Tradify, etc.), Xero or similar accounting software
• Bank fees: Business account fees, merchant facility fees

What Tradies Cannot Claim

To keep the ATO happy, it’s equally important to know what’s off the table:

• Home-to-work commuting (in most cases — see the home base of operations exception above)
• Conventional clothing — even if worn exclusively for work
• Fines and penalties — parking infringements, speeding fines, even if incurred during work travel
• Private portion of any expense — if you use a tool or vehicle partly privately, you can only claim the work-related proportion
• Personal grooming — haircuts, skincare products, even sunscreen (unless you work in direct sun and sunscreen is a genuine occupational requirement)

Employing Apprentices or Workers: FBT Considerations

If you run a trade business and employ apprentices or workers — and you provide them with a vehicle, tools, or other benefits beyond their wages — you may have fringe benefits tax (FBT) obligations as an employer.

FBT applies to non-cash benefits provided to employees. So if you put an apprentice in a company van for private use, or provide equipment that has significant private use, the ATO may consider that a fringe benefit. Our comprehensive guide to fringe benefits tax in Australia explains exactly how FBT works and which exemptions are available, including the electric vehicle exemption that may apply to your fleet.

Frequently Asked Questions

What can tradies claim on tax without receipts?

The ATO allows limited claims without written evidence in certain circumstances. For laundry of work clothing, you can claim up to $150 without receipts. For car expenses using the cents per kilometre method (up to 5,000km), you don’t need to keep a logbook — but you should have some record of the trips. For other deductions, the ATO generally expects receipts or bank statements. If you’re missing receipts for genuine work expenses, a credit card statement showing the amount, merchant, and date is the next best option.

Can tradies claim tools over $300?

Yes — tools over $300 are claimable, but they’re typically depreciated over the effective life of the asset rather than written off immediately. However, if your business qualifies as a small business entity (turnover under $10 million), the instant asset write-off allows you to deduct tools and equipment up to $20,000 in the year of purchase. This significantly improves the cash flow benefit of buying new tools for your trade.

Can a tradie claim home-to-work travel?

Generally no — the ATO considers home-to-work travel to be a private expense. However, if your home is your genuine base of operations — you store bulky tools or materials at home that are required at each worksite, and you have no fixed office or yard to report to — then the first trip to the first job site and the last trip home can be deductible. You need to document this clearly if challenged.

Which vehicle method is better for tradies?

For most tradies who use their vehicle heavily for work, the logbook method produces a substantially higher deduction than the cents per kilometre method (which caps at 5,000km or $4,400). A 12-week logbook is required initially, but once completed it’s valid for five years unless your work pattern changes significantly. The upfront effort is usually worth it.

How much can a tradie claim for phone and internet?

There’s no fixed amount — it depends on your actual work-use proportion. If you review one month’s usage in detail and determine 70% of calls and data are work-related, you can claim 70% of your annual phone bill. For most tradies, work use is genuinely high — clients, suppliers, booking apps — so the claim is often substantial. Keep one month’s detailed calculation on record in case the ATO queries your claim.

Can I claim my TAFE course as a tradie?

Yes, if the TAFE course is directly related to your current trade and maintains or improves your skills in that occupation. You cannot claim a course that qualifies you for a different trade or occupation — that cost is not deductible under the ATO’s self-education rules. Licence renewals and upgrade courses within your existing trade are generally fine; a career-change qualification is not.

Getting your deductions right isn’t just about the current year’s refund — it’s about building the habit of tracking expenses correctly so that every year you’re not leaving money in the ATO’s hands. If you’d like a tax adviser who understands the trade industry and can make sure your return is as strong as it can legally be, reach out to Pinnacle and let’s have a conversation.

Frequently Asked Questions

This article contains general advice only and does not take into account your specific circumstances. Please speak with a qualified accountant or tax adviser before making financial decisions.

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