Sole Trader Expenses Australia What You Can Claim

• Materials bought for a specific job
• Tools and small equipment: an instant asset write-off let you claim eligible assets up to A$20,000 in full, in the year you bought them, for assets first used between 1 July 2025 and 30 June 2026. A Budget proposal to make that A$20,000 threshold permanent from 1 July 2026 has been announced but is not yet law - the standing legislated threshold is A$1,000, so check ato.gov.au for the current position before relying on it for a purchase made now
• Tools and equipment over the threshold are depreciated over their effective life instead
• Safety gear and protective equipment

• The cents-per-kilometre method: a flat ATO rate (91 cents/km for the current income year) covering all running costs, capped at 5,000 business km a year per car
• Or the logbook method: keep a continuous 12-week logbook to establish your business-use %, then apply that % to your actual running costs (fuel, rego, insurance, repairs, depreciation) - a logbook is valid for up to 5 years if your business use stays similar
• Personal trips (the school run, groceries) are not claimable, even in a work vehicle

Choose one method per car for the year and keep whichever records that method requires - the ATO reviews vehicle claims closely.

• The ATO's fixed-rate method (70 cents per hour for 2024-25 through 2026-27) covers energy, internet, phone, and stationery - multiply it by the hours you actually worked from home, using a record kept as you go (the ATO does not accept an estimate or a 4-week diary)
• You can separately depreciate technology and furniture used for work (laptop, desk, chair)
• Rates are reviewed periodically, so check the current ATO fixed-rate figure before you calculate

• The business-use percentage of your phone and internet bills - unless you're already claiming them through the working-from-home fixed-rate method above, which bundles them in
• A simple, reasonable estimate is fine - you do not need to itemise every call

• Payments to subcontractors for work on a job are a direct business cost
• If you're in the building and construction industry (or certain other industries the ATO specifies), you may need to lodge a Taxable Payments Annual Report (TPAR) each year by 28 August, reporting what you paid each contractor - a separate reporting obligation, not something that changes the deductibility of the subcontractor invoice itself

• Business insurance - public liability, tools, vehicle, professional indemnity
• As a sole trader you're not legally required to hold workers' compensation insurance for yourself (that only applies once you have employees) - many sole traders choose income protection insurance instead, and deductibility depends on the policy, so check with your accountant
• Superannuation guarantee doesn't apply to yourself either, but voluntary personal super contributions can be tax-deductible if you lodge a valid notice of intent with your fund before you lodge your return

• Invoicing and accounting software (Invio included)
• Cloud storage, design tools, and other software used to run the business
• Website hosting and domain costs

• Accountant and bookkeeper fees
• Bank fees on a business account
• Advertising and marketing spend
• Professional memberships and training directly related to your trade

Not GST-registered

Claim the full, GST-inclusive price as your expense. You have no mechanism to reclaim the GST component separately, so the whole amount you paid is genuinely your business cost.

GST-registered

Claim the GST-exclusive price as your expense, then claim the GST portion back separately on your Business Activity Statement (BAS). Deducting the GST-inclusive amount as an expense as well would double-count it.