Australian Tax Deductions Guide 2024-25

Quick Calculator Access

Use our tax calculator to see how deductions affect your tax refund and take-home pay.

Tax deductions reduce your taxable income, which can lower your tax bill and increase your refund. Understanding what you can claim is essential for maximizing your tax benefits while staying compliant with ATO rules.

What Are Tax Deductions?

Tax deductions are expenses you can subtract from your taxable income. They must be:

  • Directly related to earning your income - The expense must have a clear connection to your work or income-producing activities
  • Not reimbursed by your employer - You can't claim expenses your employer has already paid for
  • Supported by records - You need receipts, invoices, or other documentation to prove the expense
Important ATO Rule

You can only claim the work-related portion of expenses. If an item is used for both work and personal purposes, you can only claim the percentage used for work.

Common Work-Related Deductions

Vehicle and Travel Expenses

  • Car expenses - Using your car for work-related travel (not commuting)
  • Public transport - Work-related travel costs
  • Flights and accommodation - Business travel expenses
  • Parking and tolls - When traveling for work

Clothing and Laundry

  • Uniforms - Compulsory work uniforms and protective clothing
  • Safety equipment - Hard hats, safety boots, high-vis clothing
  • Laundry expenses - Washing work-specific clothing

Technology and Equipment

  • Home office equipment - Computers, printers, office furniture
  • Software and apps - Work-related software subscriptions
  • Mobile phone expenses - Work-related portion of phone bills
  • Internet costs - Percentage used for work purposes

Education and Training

  • Professional development - Courses that improve work skills
  • Industry publications - Work-related books and journals
  • Conference fees - Industry conferences and seminars

Home Office Deductions

With many Australians working from home, understanding home office deductions is crucial [ATO Home Office Guide]:

Fixed Rate Method

80 cents per hour worked from home

Covers:

  • Phone and internet expenses
  • Computer consumables
  • Stationery
  • Electricity for heating, cooling, lighting
Actual Cost Method

Claim actual expenses with detailed records

Can include:

  • Home office equipment depreciation
  • Electricity, gas, water (work portion)
  • Internet and phone bills (work portion)
  • Office supplies and consumables

Investment Property Deductions

If you own rental property, you can claim various deductions [ATO Rental Property Guide]:

Immediate Deductions
  • Real estate agent fees
  • Property management
  • Maintenance and repairs
  • Insurance premiums
  • Council rates
  • Interest on loans
Depreciation Claims
  • Building depreciation (2.5% per year)
  • Fixtures and fittings
  • Appliances and furniture
  • Carpet and window coverings
Capital Works
  • Structural improvements
  • Extensions and renovations
  • Initial repairs (claimed over time)

Self-Education Expenses

You can claim education expenses that have a direct connection to your current work [ATO Self-Education Guide]:

Claimable Education Expenses
  • Course fees - Tuition, textbooks, and study materials
  • Travel to study - Transport to lectures, tutorials, or exams
  • Accommodation - If you need to stay away from home for study
  • Equipment - Computers, software, stationery used for study
  • Professional memberships - Related to your field of study

Record Keeping Requirements

The ATO requires proper documentation for all deductions [ATO Record Keeping Guide]:

Essential Records

  • Receipts and invoices - For all claimed expenses
  • Bank statements - Showing payment of expenses
  • Work diary - For travel and vehicle expenses
  • Logbooks - For phone, internet, and vehicle use

Digital Options

  • ATO app - Photo and store receipts digitally
  • Cloud storage - Backup important documents
  • Accounting software - Track expenses automatically
  • Bank categorization - Categorize transactions for tax time

Deduction Limits and Rules

Key Limits to Remember
  • $300 rule - You don't need receipts for work expenses under $300 (but you still need evidence)
  • Substantiation rules - Different rules apply to different types of expenses
  • Reasonable amounts - Claims must be reasonable for your income and occupation
  • Apportionment - Only claim the work-related portion of mixed-use items

Calculate Your Tax Savings

See How Deductions Affect Your Tax

Enter your deductions in our calculator to see the impact on your tax refund and take-home pay.

Use Tax Calculator

Common Mistakes to Avoid

Don't Claim
  • Travel between home and work (commuting)
  • Regular clothing (even if required for work)
  • Expenses reimbursed by your employer
  • Personal portions of mixed-use items
  • Fines and penalties
Best Practices
  • Keep detailed records throughout the year
  • Use the ATO app to photograph receipts
  • Calculate work-use percentages accurately
  • Seek professional advice for complex situations
  • Review ATO guidance regularly

Professional Advice

For complex deduction situations, consider consulting with:

  • Registered Tax Agents - Find an agent
  • Accountants - For investment property and business deductions
  • Financial Advisors - For investment and superannuation strategies
Remember

Tax laws change regularly. Always check the latest ATO guidance or consult a professional for current information. This guide provides general information only and shouldn't replace professional tax advice.

Last updated: August 22, 2025

Tax Calculator Tax Brackets Guide