Tax Deductions in Australia - Industry Guide

You may be able to claim a tax deduction for expenses you incur in running your business. Identifying and maximising eligible deductions can help you minimise your tax liability. To help you understand the type of deductions which you can claim (and those you can’t) based on your industry or occupation, we have put together this guide offering business tax tips.

Sole Traders

A sole trader is a self-employed individual who owns and runs their own business as an individual.

As a sole trader, your business structure is taxed as part of your personal income because it is owned by you. This means the tax rates applicable will align with individual rates. Ensure that you secure a tax file number and an Australian Business Number (ABN). Additionally, if you earn $75,000 or more each year, you will need to register for Goods and Services Tax (GST).

What you can claim for business tax deductions

You can claim certain business tax deductions for most expenses you incur running your business provided they are directly related to your assessable income. These expenses include:

• Travel for business purposes such as bus, train or taxi fares
• Vehicle expenses including fuel and oil, servicing, lease payments and registration
• Maintenance costs of machinery, tools and premise
• Work from home / home based office expenses including occupancy (mortgage interest) or operating expenses (electricity)
• Personal super contributions for yourself or your employees
• Bad debts or invoices that aren’t going to be paid

What you can’t claim for business tax deductions

You can’t claim 100% of all claimable expenses as you are entitled only to the proportion you use for work. All expenses must be evidenced. Therefore, car expenses claimed without the provision of a logbook are not claimable.

In keeping with the principle of claiming only those expenses that you incur, travel expenses incurred for anyone other than yourself are not claimable.

Learn more about what a sole trader can claim for tax deductions.

Tradies

A tradesperson (otherwise known as a tradie in Australia) is a skilled, manual professional who applies technical, trade or industry-specific knowledge in construction, manufacturing, scientific, engineering or other activities.

What you can claim for business tax deductions

As a tradie, you can claim certain business tax deductions for expenses which are directly related to earning your income. These expenses include:

• Vehicle expenses
• Work-related travel expenses
• Tools, equipment and other assets
• Occupation-specific and protective clothing
• Training courses, licences and certifications
• Union and association fees
• The cost of managing tax

What you can’t claim for business tax deductions

You can’t claim expenses for items that you have been reimbursed for. You also cannot claim an expense for an item that is not directly related to earning your income. Expenses must be evidenced, typically in the form of a receipt.

Learn more about what a tradie can claim for tax deductions.

AirBnB Hosts

An AirBnB host is an individual who chooses to offer accommodation in the form of either short or long-term homestays through the online marketplace, AirBnB.

To avoid potential problems, ensure that you remain up to date on tax regulations that apply to AirBnB hosts. Distinguish and be clear about those expenses you can claim for the entire property and those expenses incurred which relate to areas of the property shared by guests and landlords.

What you can claim for business tax deductions

As an AirBnB host, you can claim certain tax deductions, either fully or partially, on your AirBnB rental. These expenses include:

• Depreciation of furniture such as beds and tables
• Repairs and maintenance carried out on the rental property
• Cleaning costs for the areas that are rented out
• AirBnB service fees

What you can’t claim for business tax deductions

You cannot claim expenses incurred in relation to areas that are not used by guests in the AirBnB rental property. If you live at the property that is being rented out, shared areas will not have the same deductions applicable.

You cannot apply expenses for periods in which the property is not available for rent. 

GST does not apply to residential property, this also means that you are not able to claim GST credits for any costs associated with running your AirBnB rental property.

Learn more about what an AirBnB host can claim for tax deductions.

Doctors

This covers doctors, specialists and medical professionals who work in Australia. 

With a long list of potential tax deductions that can be claimed, it is important to keep track of your expenses to ease filing your tax return. Within each category of expenses, be aware of the types of expenses which allow for deductions. Remember that should you work from home frequently, there may be deductions you are entitled to claim for certain expenses.

What you can claim for business tax deductions

While your career is considered one of the highest income earners, you are also eligible for a long list of possible tax deductions for certain expenses.

These expenses include:

• Self-education expenses
• Car and business travel expenses
• Books, journals and subscriptions or work-related publications
• Uniforms, coats or surgical gear, whether this is to purchase, hire, repair or clean
• Professional indemnity insurance
• Home office expenses 

What you can’t claim for business tax deductions

You can’t claim deductions for expenses: 

• Related to course fees or materials where the course is unrelated to your current work
• For repayment on study loans
• For trips between the home and office such as your daily commute
• For a work-related trip where it is an extension of a personal trip

Learn more about what a doctor can claim for tax deductions.

Hair and beauty salon owner operators

This covers owner operators of hair and beauty salons in Australia and includes hairdressers, beauticians and nail technicians. 

There are many allowable deductions but you need to be clear about what is allowed and what isn’t. Maintain good records at all times. Be extra careful about claiming travel expenses. Keep a strict logbook to calculate how much you spend on work-related journeys. Deductions for expenses for tools purchased can be claimed but it should also account for the tool’s decline in value over time.

What you can claim for business tax deductions

You are eligible for a number of deductions for expenses.

These expenses include:

• Protective clothing such as aprons, masks or compulsory uniforms as well as costs Associated with its purchase, hire, repair or cleaning
• Specific car expenses such as the cost of travel between two workplaces on a given day or travel costs when carrying bulky tools or equipment essential for your work
• Tools and equipment which include materials, insurance for these tools and associated repairs
• Union fees and subscriptions to technical publications

What you can’t claim for business tax deductions

You can’t claim deductions for expenses such as personal grooming expenses. Similarly, there are other private expenses you might need to incur to have these things at work which are also not deductible. These include childcare, fines, vaccinations or music subscriptions.

Learn more about what a hair and beauty salon operator can claim for tax deductions.

Real estate agents

A real estate agent, often referred to as a realtor or real estate broker, is an individual who represents sellers and buyers of real estate or property.

There may be significant amounts of income tax to be paid in your line of work particularly if you work on commission. The key is to understand what expenses may be deducted from your tax bill. Remember that where equipment such as cameras and drones are used, deductions for these can be made but only in relation to their use for work.

What you can claim for business tax deductions

As a real estate agent, you may be able to claim a number of deductible expenses. 

These expenses include:

• Car and travel expenses where you are travelling between open homes on the same day or a trip from home to work where you are carrying bulky tools or equipment
• Client gifts
• Certification or licence fees
• Marketing equipment and advertising costs
• Buying decorative elements to prepare for an open house

What you can’t claim for business tax deductions

You can’t claim for the following expenses:

• Travel expenses associated with your work commute
• The full cost of utility expenses such as electricity, gas or phone bills as only the portions applicable for work purposes are claimable
• Entertainment-related gifts such as taking a client for a meal or event

Learn more about what you a real estate agent can claim for tax deductions.

Personal trainers

A personal trainer is an individual who creates and delivers safe, effective training or exercise programs for individuals or groups.

If you work for an employer like a gym, your taxes will be shown in your income statement. However, if you are self-employed, your tax will be calculated based on payments from invoices you generate. Be clear about the allowances you receive as some are eligible for deductions and some are not.

What you can claim for business tax deductions

As a personal trainer, you may be able to claim a number of deductible expenses. 

These expenses include:

• Car expenses
• Clothing and laundry expenses
• Self-education expenses
• Tools and equipment

What you can’t claim for business tax deductions

You can’t claim the following expenses:

• Compensation from your employer for specific aspects such as a supervisor allowance or where a broken shift allowance applies
• Those which are not associated with providing personal training services
• The cost of travelling to and from work unless you are moving between two jobs
• Self-education where the course is not related to your industry

Learn more about what a personal trainer can claim for tax deductions.

Farmers

A farmer is an individual who owns and operates a farm business whether that relates to the cultivation of crops or raising livestock.

Operating a farm business can be complicated especially with many overheads. However, there are many areas to consider for allowable deductions. These include the vehicles used for work, clothing, deductions for capital assets for construction, manufacture of fencing, fodder or fodder storage, licences and permits and other expenses. Additionally, keep track of the many tax incentives made available for farmers too. 

What you can claim for business tax deductions

As a farmer, you may be able to claim a number of deductible expenses. 

These expenses include:

• Travel-related expenses such as the decline in value and running costs of an all-terrain vehicle
• Costs of travel and accommodation elsewhere in the course of work such as transporting cattle
• Working animal expenses
• The cost of renewal of a licence or permit

What you can’t claim for business tax deductions

Your can’t claim for the following expenses:

• Cost of clothing unless it is protective clothing such as steel-capped boots
• Any other expenses outside of capital costs for the construction, manufacture, installation or acquisition of fencing, fodder or fodder storage assets
• Costs of obtaining a licence or permit

Learn more about what a farmer can claim for tax deductions.

Artists

A performing artist can include an individual who is a singer, dancer, actor or model.

As an artist, there are a variety of tax deductions available to you. However, while allowances are considered part of your income, they are not always available to claim as a deduction. There are many other deductions that may be claimed such as agent fees, research expenses and grooming costs. Having a good system in place that allows you to track and record your expenses reliably will greatly assist you at tax time.

What you can claim for business tax deductions

As an artist, you may be able to claim a number of deductible expenses. 

These expenses include:

• Work-related expenses that relate directly to your work
• A meal allowance when you travel for work
• Special skills like a first-aid certificate

What you can’t claim for business tax deductions

You can’t claim for the following expenses:

• Work-related expenses that are reimbursed by your employer
• Compensation for certain aspects of your job that may be dangerous such as a height allowance or industry peculiarities such as irregular working hours allowance
• Hairdressing, cosmetics or skin care expenses

Learn more about what an artist can claim for tax deductions.

Consultants

Serving as a trusted advisor, a consultant is a professional who provides expert advice and guidance to individuals, organisations or businesses in a specific field such as finance, management, IT or operations.

Whatever your field of expertise, there is a range of allowable expenses that you may claim deductions on. Your first step is to understand whether you operate as an employee or a contractor as this will influence how your taxes are calculated. While self-education and conference expenses are generally deductible, take note that you cannot claim a deduction for a course that is not related to your field.

What you can claim for business tax deductions

As a consultant, you may be able to claim a number of deductible expenses, depending on whether you operate as an employee or a contractor. 

These expenses include:

• Work from home expenses if you qualify as a home-based business
• Premium subscriptions for industry-related publications or software
• Union or professional association fees
• Insurance for any equipment used for work such as a laptop

What you can’t claim for business tax deductions

You can’t claim for the following expenses:

• Clothing and laundry expenses unless it is a compulsory uniform required by your workplace
• Self-education expenses where you undertake a course that is not related to your field or where your employer has reimbursed the expenses

Learn more about what a consultant can claim for tax deductions.

Freelance writers

A freelance writer is an individual who writes content on a freelance basis, that is, they are self-employed and not bound to a particular employer or company.

What you can claim for business tax deductions

As a freelance writer, you may be able to claim a number of deductible expenses.

These expenses include:

• Home office expenses
• Tools and equipment
• Website costs such as domain hosting fees, security software and web development fees
• Personal contributions to a superannuation fund

What you can’t claim for business tax deductions

You can’t claim for the following expenses:

• The totality of your utility bills such as electricity, gas and phone where you work from home as only the portion applicable to work can be deducted 

Learn more about what a freelance writer can claim for tax deductions.

Musicians

A musician is an individual who creates, performs or expresses music through singing, songwriting, composing, arranging or producing music for the purposes of work. 

As a musician, figuring out your tax obligations starts with knowing whether you make music for work or fun. If you intend to profit from such activities, you will need anABN to put on your invoices and report your earnings to ATO. If you earn income as a musician, you are entitled to claim tax deductions for work-related expenses.

What you can claim for business tax deductions

As a musician, you may be able to claim a number of deductible expenses.

These expenses include:

• Musical instruments and accessories
• Motor vehicle and travel expenses where these are work related 
• Commissions paid to managers and booking agents
• Insurance for equipment such as instruments, speakers or sound systems
• Recording studio fees

What you can’t claim for business tax deductions

You can’t claim for the following expenses:

• Preparing or getting to auditions
• Gifts given to other performers
• Attending awards nights or social events

Learn more about what a musician can claim for tax deductions.

When you can claim your business tax deductions

You claim your business tax deductions at the time you lodge your tax return. You lodge your taxes with the ATO at the end of financial year (EOFY).

The deadline to lodge your tax return is 31 October. 

The type of expense will also determine when you can claim your deduction:

• Operational expenses - you can claim them in the year you incur them
• Certain capital costs (depreciating assets and capital work assets) - you can claim these over a longer period
• Other capital costs (start-up expenses) - you can claim them immediately or over time

How to claim your business tax deductions

How you claim your business tax deductions will depend on the type of business you run:

• Sole trader - claim the deduction in your individual tax return
• Partnership - claim the deduction in your partnership tax return
• Trust - claim the deduction in your trust tax return
• Company - claim the deduction in your company tax return

Types of business tax deductions

There are several claims you make for business tax deductions. If you are interested, you can obtain more information on small business tax deductions.  

Here are some of the most common tax deductions:

• Tax deduction for motor vehicle expenses
• Tax deductions for home-based business expenses
• Tax deduction for digital product expenses for your business
• Tax deduction for business travel expenses
• Tax deduction for workers' salaries, wages and super contributions
• Tax deduction for repairs, maintenance and replacement expenses
• Tax deduction for other operating expenses
• Tax deduction for depreciating assets and other capital expenses
• Tax deduction for carbon sink forests
• Tax deductions for unrecoverable income (bad debts)

Get tax ready with QuickBooks

Your work requires your full focus which means having a reliable tool that can assist you to keep track of your expenses and finance could be invaluable. A cloud-based accounting tool such as QuickBooks Tax Software can help you ensure you are tax ready and give you the assurance that you are compliant for the tax season. 

While every care has been taken to ensure the accuracy of the information presented as at 12 April 2024, Intuit is not providing you with professional advice and we recommend you obtain your own professional advice. Intuit is not liable for your use of the information presented.