The rules differ depending on whether you are an employee or work for yourself on an ABN. Employees start with three golden rules.
The three golden rules
- you spent the money yourself and weren’t paid back
- it relates directly to earning your income
- you have a record to prove it.
If something is used for work and private purposes, you can only claim the work part.
Tools and equipment
- $300 or less: claim the full cost in the year you buy it, as long as it isn’t part of a set costing more than $300.
- Over $300: claim it over several years as it declines in value (depreciation).
- Repairs and insurance on work tools can also be claimed.
- Not claimable: tools your employer supplies or pays you back for.
Protective gear, sun protection and uniforms
You can claim clothing and gear that protects you from specific risks at work, such as high-vis, steel-capped boots, gloves, safety glasses, harnesses and masks. Sunscreen, sunhats and sunglasses count if your job keeps you outdoors.
A compulsory uniform with your employer’s logo, and the cost of washing it, can be claimed. Plain work clothes can’t, even if your boss tells you to wear them. That includes plain drill shirts, shorts and jeans.
Car expenses
Driving between home and work is private, even with early starts or long distances. You can usually claim:
- driving between job sites during the day
- driving from home to a different workplace, such as a training centre
- trips carrying bulky tools, but only if they are essential, you have to carry them, they can only reasonably go by car, and there is no secure storage on site.
There are two ways to work it out:
- Cents per kilometre: 88c per km for 2025–26 and 91c for 2026–27, up to 5,000 work km a year. No receipts, but you must show how you worked out the kilometres.
- Logbook: keep a logbook for at least 12 weeks in a row and claim the work percentage of your actual car costs.
Utes that carry a tonne or more, vans seating nine or more, and motorbikes can’t use either method. For those, you claim actual work-related costs.
Phone, tickets, training and union fees
- Phone and internet: the work-related part, if you keep records of your work use.
- Licences and tickets: renewing a work-related licence, ticket or card. Your first licence to get the job generally can’t be claimed.
- Training: courses that keep up or improve the skills you use in your current job.
- Union fees: claimable.
What you can’t claim
- normal travel between home and work
- everyday clothing, even if it gets wrecked at work
- fines, such as parking or speeding fines
- your ordinary driver’s licence
- anything your employer paid for or reimbursed
Working on an ABN
If you are a sole trader or run your own trade business, most costs of running the business may be deductible, such as materials, vehicle costs, insurance and protective gear.
Under the instant asset write-off, small businesses with turnover under $10 million can immediately deduct eligible assets costing less than $20,000 each. It is now a permanent setting from 1 July 2026. Cars have a separate limit, and you need to use the simplified depreciation rules. The right structure matters too, see choosing a business structure.
Keep good records
Records should show what you bought, who from, how much and when. A bank statement on its own usually isn’t enough. Photos of receipts and the ATO app’s myDeductions tool both work. Keep records for five years after you lodge, or five years after your last claim for things you are depreciating.
Common questions
Can I claim my steel caps and high-vis?
Yes. Protective clothing and footwear guard against specific risks at work, so they are generally claimable if you paid for them and weren’t reimbursed.
Can I claim driving to work because I carry tools?
Only in limited cases. The tools must be essential and bulky, you must have to carry them, and there must be no secure storage on site. Carrying a small toolbox by choice usually won’t qualify.
What is the cents per kilometre rate?
88 cents per km for 2025–26 and 91 cents per km for 2026–27, up to 5,000 work kilometres per car.
Do I still need receipts with the new $1,000 deduction?
From the 2026–27 return, employees can choose a standard deduction of up to $1,000 without receipts. If your work expenses are higher and you want to claim them, you still need records.
General information only, written on 11 October 2026. It doesn't take your personal circumstances into account. Rates, grants, tax rules and concessions change, so speak with us before making a decision.
