Tax Deductions Guide - Australian Tax Guide

Work-Related Deductions

You can claim a deduction for expenses directly related to earning your income. To claim a deduction, you must have spent the money yourself, it must be directly related to earning your income, and you must have a record to prove it.

Common Work-Related Deductions

Vehicle and travel expenses - Travel between separate workplaces, or from your workplace to an alternate workplace
Clothing and laundry - Occupation-specific clothing, protective clothing, and registered uniforms
Home office expenses - You can use the fixed rate method of 67 cents per hour for heating, cooling, lighting, and office furniture depreciation
Self-education - If your course is directly related to your current employment and maintains or improves skills required for your work
Tools and equipment - Items costing $300 or less can be claimed immediately; items over $300 must be depreciated
Phone and internet - The work-related percentage of your phone and internet costs

Warning: You cannot claim a deduction for normal trips between home and work. The ATO specifically targets this as a common error in tax returns.

Working From Home

Since COVID-19, more Australians work from home. The ATO allows two methods for claiming working from home deductions:

Fixed Rate Method (Revised)

Claim 67 cents per hour for each hour you work from home. This covers energy expenses, phone, internet, stationery, and computer consumables. You must keep a record of hours worked from home for the entire year, such as a timesheet, roster, or diary.

Actual Cost Method

Calculate the actual work-related portion of all your running expenses. You need detailed records including receipts and a reasonable basis for your calculations.

Tip: The fixed rate method is simpler, but if your actual costs are higher (e.g., you have a dedicated home office with high electricity usage), the actual cost method may give you a bigger deduction.