Top Tax Deductions for Australian Employees

Work-related deductions reduce your taxable income, which reduces your tax. They're also one of the areas the ATO reviews most closely, so it pays to understand the rules.

The three golden rules

If an expense is for both work and private purposes, you can only claim the work-related portion.

• You must have spent the money yourself and not been reimbursed.
• The expense must directly relate to earning your income.
• You must have a record to prove it.

Working from home

You can generally use either the fixed-rate method or the actual-cost method. The fixed rate is 70 cents per work hour for 2024–25 and 2025–26, and covers energy, internet, phone, stationery and computer consumables. You need a record of every hour you worked from home — a timesheet, roster or diary. An estimate isn't acceptable.

Under either method, you can separately claim the decline in value of equipment such as a desk, chair or computer. Check the ATO website for the fixed rate that applies to 2026–27.

Car expenses

If you use your own car for work — not just to get to and from your regular workplace — you can use the cents-per-kilometre method (up to 5,000 work kilometres per car) or the logbook method. The cents-per-kilometre rate is 88 cents for 2024–25 and 2025–26, and 91 cents for 2026–27.

The logbook method requires a logbook kept for a continuous 12-week period and records of your actual car expenses. It can give a larger deduction if you drive a lot for work.

Tools, equipment and technology

Items costing $300 or less that are used mainly for work can generally be claimed immediately. More expensive items are depreciated over their effective life. Phones, internet and laptops used for both work and personal purposes must be apportioned.

Clothing, uniforms and laundry

You can claim protective clothing, occupation-specific clothing (such as a chef's checked pants) and compulsory or registered uniforms with a logo. Conventional clothing — even a plain black suit your employer requires — is generally not deductible.

Self-education and memberships

Courses that maintain or improve the skills you need in your current job can be deductible. Study to get a new job generally isn't. Union fees, professional association memberships and work-related subscriptions are commonly claimed.

Frequently disallowed claims

• Travel between home and your regular workplace
• Grooming, gym memberships and everyday clothing
• Meals on a normal working day
• Expenses your employer reimbursed