Tax time can feel confusing, especially when you are not sure what you can and cannot claim. The good news is that many Australians may be able to claim legitimate deductions and reduce their taxable income, provided the claim is directly related to earning their income and they have proper records to support it. The ATO says the 3 golden rules are that you must have spent the money yourself, you were not reimbursed, and the expense must directly relate to earning your income.
Before claiming any deduction, it is important to understand how the ATO looks at work-related expenses. In general, you can only claim the work-related portion of an expense. That means if something is partly for work and partly for personal use, only the work-use share may be deductible. The ATO also makes it clear that not every expense connected to your job is claimable, and you need records to back up what you claim
Tax deductions are work-related or income-related expenses that you can subtract from your total income before tax is calculated.
👉 Simply put:
Lower taxable income = higher potential tax refund
However, you can only claim expenses that are:
You may be able to claim car expenses if you use your own car for work-related travel, such as travelling between separate workplaces on the same day or visiting clients. In most cases, ordinary travel between home and your regular workplace is not deductible. The ATO provides guidance on when employee car expenses can be claimed and when they cannot.
If you travel for work and pay for accommodation, meals, transport, or incidental expenses as part of that travel, you may be able to claim those costs. However, everyday commuting from home to work is usually not deductible. If your total claim for work-related expenses is more than $300, written evidence is generally required.
If you work from home, you may be able to claim running expenses such as electricity, internet, phone usage, stationery, and computer consumables, depending on the method used and your circumstances. For the 2024–25 income year, the ATO says the fixed rate method is 70 cents per hour worked from home, and this rate covers additional running expenses such as energy, internet, phone, and stationery.
You cannot claim everyday clothing just because you wear it to work. However, you may be able to claim occupation-specific clothing, protective clothing, or a registered compulsory uniform. Laundry expenses for eligible work clothing may also be claimable. The ATO specifically excludes conventional clothing, even if your employer expects you to dress neatly.
You may be able to claim tools, equipment, technical items, or other assets you use to do your job. In some cases, smaller items may be claimed immediately, while more expensive items may need to be claimed over time as decline in value. The ATO’s employee work expense guidance explains that capital items may still be deductible through depreciation rules rather than as an immediate full deduction.
Depending on your role, you may also be able to claim expenses such as union fees, professional memberships, training directly related to your current employment, stationery, home office supplies, and some phone or internet costs. These claims must still satisfy the ATO rules and be supported by records.
These are the main employee deduction categories the ATO lists in myTax and the individual tax return instructions: work-related car expenses, travel expenses, clothing and laundry, self-education expenses, and other work-related expenses.
Under other work-related expenses, the ATO examples include:
You may be able to claim self-education expenses where the study directly relates to your current employment and helps you maintain or improve the skills or knowledge you use in that job. The ATO includes self-education as a specific deduction category in myTax 2025.
Individuals may be able to claim gifts or donations made to eligible deductible gift recipients, provided the donation meets ATO rules. This is a separate deduction section in myTax.
The ATO also allows deductions for some costs of managing your tax affairs, such as tax agent fees and certain costs of obtaining tax advice. This sits under “other deductions” in myTax.
If you earn investment income, you may be able to claim expenses incurred in earning interest, dividends, or other investment income, such as account-keeping fees, investment advice fees in some cases, and interest on money borrowed to earn assessable investment income, depending on the facts. The ATO includes this as a separate deduction area in myTax.
Where relevant, the ATO deduction sections also cover some expenses connected to earning dividend income, including interest on funds borrowed for income-producing shares and related account or management costs where allowed.
This is a less common category, but it appears as a separate deduction area in myTax for taxpayers who are eligible.
Eligible individuals may be able to claim a deduction for personal super contributions if they meet the rules and lodge the required notice with their super fund. This is also listed as a separate deductions section in myTax.
Where the premium covers replacement of lost income, it may be deductible. The ATO includes this in the broader deductions framework for individuals, though it depends on the policy type and what it covers.
The ATO has a separate guide on deductions for prepaid expenses, which can apply in some cases where an expense is paid in advance for a later income year.
Occupation-specific deductions matter
Not every occupation can claim the same things. The ATO publishes occupation and industry-specific guides that explain common income, allowances, and deductions for different jobs and industries. This is useful because a nurse, tradie, teacher, office worker, or truck driver may all have different eligible deductions.
While there are many deductions available, not every expense connected to your job or daily life is tax deductible. In general, the ATO does not allow claims for private or domestic expenses, the cost of normal travel between home and your regular workplace, everyday clothing, or any amount that has been reimbursed by your employer. Even where an expense has some connection to work, you can only claim the portion that directly relates to earning your income.
This is where many taxpayers get caught out. For example, buying conventional clothing for work, claiming home-to-work travel in ordinary circumstances, or trying to claim personal costs as work-related expenses can lead to incorrect claims. The ATO also reminds taxpayers that records are essential, and that deductions must be supported by evidence rather than estimates or assumptions.
The safest approach is to treat every deduction carefully. Before making a claim, make sure you paid for the expense yourself, were not reimbursed, and can clearly show how the cost relates to earning your income. If part of the expense is private, only the work-related or income-producing portion may be deductible.
Avoid these errors to stay compliant:
Incorrect claims may increase the risk of an audit from the ATO.
To legally increase your refund:
Many Australians miss hundreds or even thousands of dollars in legitimate deductions each year.
Good record-keeping is essential. Receipts, invoices, diary records, logbooks, and bank statements can all help support your claim. The ATO’s deduction guidance and myTax instructions repeatedly emphasise written evidence and proper substantiation, especially where claims are larger or involve apportionment between work and personal use.
While you can lodge your own tax return, many Australians choose a registered tax agent because they:
Working with professionals like DIA Taxation ensures your return is accurate and optimised
Knowing what you can claim on tax in Australia can significantly improve your financial outcome each year. However, the rules can be complex, and mistakes are common.
Staying organised and claiming correctly ensures you stay compliant while maximising your refund legally.
At DIA Taxation, we help individuals, contractors, and small businesses:
