Tax deductions for tradies
As a tradie you can generally claim the tools, protective gear, and work-related vehicle travel you pay for yourself — the things you buy to actually do the job.
Tradies rack up more claimable expenses than almost any occupation — but they’re also the easiest to lose track of when receipts live in a glovebox. Here are the categories that come up most often.
The three rules for any claim
- You paid for it yourself and weren’t reimbursed.
- It directly relates to earning your income.
- You have a record — a receipt, invoice or bank statement.
Checked against ATO guidance: August 2026
What you can usually claim
Tools and equipment
Hand tools, power tools and equipment you buy for work. Employees can claim tools costing $300 or less in full the year they buy them; more expensive tools are claimed over their effective life (depreciation). Tradies running a business on an ABN had a $20,000 instant asset write-off per asset for 2023-24 through 2025-26 — the 2026-27 limit had not been legislated at the time of review, so confirm the current figure with the ATO before relying on it.
Protective clothing and safety gear
Hi-vis, steel-cap boots, hard hats, gloves, sun protection for outdoor work — protective items specific to the job, plus the cost of laundering them.
Vehicle travel between sites
Travel between different job sites during the day, or carrying bulky tools you can’t leave on site, is generally claimable — usually via the logbook method or cents-per-kilometre. The regular commute from home to a single workplace is not.
Licences, tickets and union fees
Renewing a trade licence, white card, or machinery ticket, and union or industry association fees, are typically deductible. The initial cost of getting a licence to enter the trade usually isn’t.
Buying bigger gear: what happens at tax time
On an ABN with GST registration, a new drill kit or a trailer gives you the GST credit on the activity statement now, while the cost is claimed over its effective life. Employees have no GST side and claim tools over $300 the same way — the private-use share reduces the yearly claim, not the value you carry on the register.
General information, not personal tax advice. What you can claim depends on your circumstances — check the ATO's own occupation guides or a registered tax agent, and keep records for every claim.
Keep in mind
- Ordinary clothes (plain jeans and a t-shirt) even if you only wear them to work.
- Your normal commute from home to a fixed workplace.
- Tools or gear your employer paid for or reimbursed.
Where mistakes happen
The claims most likely to get adjusted — not because they're disallowed outright, but because the split or the timing was off.
- Claiming ute running costs without a logbook to support the business-use percentage — weekend and family use has to come out of the claim.
- Claiming plain work clothes as 'protective' because they got dirty on the job — everyday clothing stays private however hard it's worn.
Take it further
Your income tax, Medicare levy and take-home pay on any salary.
AI2Fin for sole traders →One account, two lives, already sorted
Track it: the asset register →Log the purchase once and AI2Fin carries the effective life, the yearly deduction and the private-use share for you.
Depreciation (decline in value) →Claiming the cost of a big asset gradually over its life.
Instant asset write-off →Immediately deduct an eligible asset instead of depreciating it.
Logbook method (car expenses) →Claim your car’s real business-use share of running costs.
Effective life →How many years an asset is expected to be used — the base of every depreciation rate.
Capital purchase (GST on Capital) →An asset you buy to use over years — G10 on the BAS, then depreciated.
Tradies — common questions
Can I claim my ute?
You can claim the work-related running costs of a vehicle you use to travel between sites or carry bulky tools — using a logbook or the cents-per-kilometre method. Private use isn’t claimable, so the split matters. This is general information, not personal tax advice — what you can claim depends on your circumstances, so check with the ATO or a registered tax agent, and keep records to back up every claim.
Do I need a receipt for every tool?
Keep evidence for your claims. There are simplified record rules for smaller totals, but a receipt or bank record showing what you bought and when is the safest backup. This is general information, not personal tax advice — what you can claim depends on your circumstances, so check with the ATO or a registered tax agent, and keep records to back up every claim.
Can I claim tools I bought before I started the job?
Generally you claim tools bought to earn your current income. Getting the timing and purpose right matters, so it’s worth checking specifics with your tax agent. This is general information, not personal tax advice — what you can claim depends on your circumstances, so check with the ATO or a registered tax agent, and keep records to back up every claim.
Does the car limit apply to my ute?
The car limit caps both the GST credit and the depreciation you can claim on a car, but it only applies to vehicles that count as cars — designed to carry fewer than nine passengers and a load under one tonne. Many dual-cab and single-cab utes have a payload of a tonne or more and sit outside the limit, so the full cost goes on the register and the full GST credit is claimable for a registered business. Check the payload on the compliance plate rather than assuming. This is general information, not personal tax advice — what you can claim depends on your circumstances, so check with the ATO or a registered tax agent, and keep records to back up every claim.
Deductions for other occupations
See all occupations.
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