Tax Deductions for Tradies in Australia: What You Can Claim in 2026–27
From tools and work vehicles to protective gear, licences and phone costs, tradies can often claim a wide range of expenses — provided the expense is genuinely connected to earning their income.
Whether you're a carpenter, electrician, plumber, builder, mechanic, painter, landscaper or another skilled tradesperson, your work can involve significant out-of-pocket expenses.
Some of those costs may be deductible. The key rule is generally that you must have incurred the expense yourself, it must be directly connected with earning your income, and you cannot have been reimbursed for it.
Where an expense is partly private and partly work-related, only the work-related portion can generally be claimed.
Key Takeaways
- Tools and equipment used for work can generally be deductible, but private use must be excluded.
- For employee tradies, qualifying tools costing $300 or less may be immediately deductible, while more expensive items are generally claimed through decline in value.
- The cents-per-kilometre rate for eligible car expenses is 91 cents per kilometre for the 2026–27 income year.
- Ordinary home-to-work travel is generally private, although limited exceptions can apply.
- Protective items such as steel-capped boots, hard hats, safety glasses and certain sun protection may be deductible.
- If you operate a trade business, additional obligations may include GST, BAS, TPAR and employee super.
1. Tools and Equipment
Tools are one of the most common deduction categories for tradies because they are often essential for performing the job.
Examples may include:
Hammers, levels, measuring equipment, screwdrivers and specialised trade tools.
Drills, saws, grinders, nail guns and other powered equipment used in your work.
Ladders, toolboxes, generators, compressors and other qualifying work equipment.
Work-related repair, maintenance and insurance costs for deductible equipment may also qualify.
Employee tradies and the $300 rule
If you are an employee and an individual tool or item of equipment costs $300 or less, you may be able to claim the cost immediately if the relevant conditions are met.
If it costs more than $300, or forms part of a set costing more than $300, the deduction will generally be claimed over time through decline in value.
Sole traders and businesses may be subject to different depreciation and instant asset write-off rules. The correct treatment depends on how you earn your income and who owns the asset.
2. Vehicle and Car Expenses
Vehicle expenses can be a significant deduction for tradies who regularly travel between worksites, suppliers and customers.
However, simply driving to work does not automatically make the trip deductible.
Ordinary travel from home to work
Travel between your home and your normal workplace is generally considered private travel, even if you live a long way away or work outside normal hours.
When work travel may be deductible
Depending on your circumstances, deductible travel may include:
- travel directly between two separate workplaces
- travel from one job site to another
- trips made to suppliers or customers as part of your duties
- certain travel where you are required to transport bulky tools or equipment and the ATO conditions are satisfied
The bulky-equipment exception has specific requirements. The equipment generally needs to be essential, genuinely bulky and there must not be secure storage available at the workplace.
Cents per kilometre vs logbook
| Method | How it works |
|---|---|
| Cents per kilometre | For 2026–27, eligible taxpayers can use a rate of 91 cents per work-related kilometre, subject to the kilometre limit and method rules. |
| Logbook | A compliant logbook is generally kept for a continuous 12-week representative period to establish the business-use percentage of the car. |
The logbook method can be useful where a vehicle has substantial work-related use because the resulting business-use percentage can be applied to eligible running costs.
Keep in mind that different rules can apply to vehicles that are not treated as cars for tax purposes, including some heavy-load utes and vans.
3. Protective Clothing and Safety Equipment
Tradies often work in environments that require specialised protective equipment. Genuine protective items can often be deductible.
Examples may include:
- steel-capped safety boots
- high-visibility protective clothing
- safety glasses
- hard hats
- hearing protection
- protective gloves
- safety harnesses
- sunscreen, sunglasses and sunhats where your work requires prolonged outdoor exposure
What about jeans and ordinary work shirts?
Conventional everyday clothing is generally not deductible simply because you wear it to work.
For example, ordinary jeans, plain shirts and similar everyday clothing usually remain private expenses, even if they get dirty or damaged on site.
4. Phone and Internet
Many tradies use their phones for quoting, speaking with customers, contacting suppliers, checking job schedules, taking site photographs and managing invoices.
If you pay for the phone or internet service yourself, you may be able to claim the work-related portion.
If the service is also used privately, you need a reasonable method of calculating and supporting the work-related percentage.
Where a service is genuinely used entirely for business, the treatment may be simpler. Mixed-use services should still be apportioned appropriately.
5. Licences, Permits and Professional Costs
Costs associated with maintaining your existing trade qualifications may be deductible where they are directly connected to your current income-earning activities.
Examples may include:
- renewal of trade licences
- regulatory permits required to continue your work
- relevant professional association memberships
- trade publications and technical reference material
- certain industry certifications and compliance costs
The cost of obtaining an initial qualification or licence that enables you to enter a new occupation may be treated differently from maintaining an existing qualification.
6. Training and Education
Work-related education may be deductible where it maintains or improves skills and knowledge used in your current employment or business.
This might include:
- safety and compliance training
- trade-specific refresher courses
- training relating to updated regulations or codes
- specialist courses that improve skills used in your existing trade
Training that qualifies you for an entirely new occupation is generally subject to different rules and may not be deductible against your existing employment income.
7. Home Office and Administration
Sole traders and owner-operators often complete quoting, bookkeeping, scheduling and customer administration from home.
Where you genuinely work from home, you may be able to claim eligible additional running expenses using an accepted calculation method.
You should maintain appropriate records showing the hours worked from home and how the deduction was calculated.
8. Deductions for Trade Businesses
If you operate as a sole trader, company, partnership or trust rather than simply working as an employee, your business may have additional deductible costs.
Depending on the business, these might include:
- subcontractor and labour costs
- public liability insurance
- tools and equipment insurance
- advertising and website costs
- accounting and bookkeeping fees
- software subscriptions
- business premises and storage costs
- eligible vehicle and plant expenses
9. GST for Tradies
A trade business generally needs to register for GST when its GST turnover reaches the applicable registration threshold.
For most businesses, the threshold is currently $75,000.
Once your business is required to register for GST, the ATO generally requires registration within 21 days.
Once registered, businesses may need to:
- charge GST on taxable sales
- issue valid tax invoices where required
- report GST through activity statements
- claim eligible GST credits on business purchases
10. Subcontractors and TPAR
Businesses operating in the building and construction industry may have Taxable Payments Annual Report obligations when they make payments to contractors for relevant services.
The TPAR is generally due by:
Keep accurate contractor details and payment records throughout the year rather than trying to reconstruct them when the report is due.
11. Superannuation
If your trade business employs eligible workers, superannuation obligations should be treated as an ongoing payroll responsibility rather than something reviewed only at tax time.
The general super guarantee rate is 12% for the 2026–27 financial year.
Contractors can also be treated as employees for super purposes in some circumstances, so the label “subcontractor” on an invoice does not automatically determine the super outcome.
Common Expenses Tradies Cannot Simply Claim
Be careful with private expenses
- the private portion of a mixed-use vehicle, phone or tool
- ordinary home-to-work travel unless a specific exception applies
- everyday jeans, shirts and conventional clothing
- expenses paid or reimbursed by your employer
- parking fines, traffic fines and other penalties
- private meals and entertainment
- private household and family expenses
What About the New $1,000 Work-Related Deduction?
The 2026–27 tax reforms introduce a standard work-related deduction of up to $1,000 for eligible workers.
Importantly for tradies, this does not mean someone with $4,000 of genuine eligible work-related expenses is restricted to a $1,000 deduction.
Where your actual eligible work-related deductions exceed the standard amount, you can generally continue claiming actual deductions under the normal rules, subject to the relevant record-keeping and eligibility requirements.
If you personally purchase substantial tools, safety equipment, work-related vehicle expenses or other deductible items, good records remain important even with the new standard deduction.
Record Keeping: The Part That Makes the Claim Work
A deduction is only useful if you can support it when required.
Depending on the claim, useful records may include:
- receipts and tax invoices
- vehicle logbooks
- odometer records
- phone usage calculations
- bank transaction records
- contractor invoices
- work-from-home hour records
- evidence of business and private use
Digital record keeping can make this much easier. Photograph or upload receipts when the expense occurs rather than trying to find them months later.
The Bottom Line
Tradies can have some of the most substantial work-related expenses of any occupation, but that does not mean every cost associated with going to work is automatically deductible.
The strongest claims have a clear connection to earning income, properly exclude private use and are supported by appropriate records.
For employees, the focus is usually on genuine work-related expenses. For sole traders and trade businesses, deductions need to be considered alongside GST, BAS, contractor reporting, payroll and super obligations.
Not sure what you can claim?
We can help you review your deductions, business expenses, GST and tax obligations so your return reflects your actual circumstances.
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