Tax Deductions in Australia
Reviewed by the Commoner Law Editorial Team. Sourced from Commonwealth Acts of Parliament, federal regulations, and official government guidance. State-level information reflects each state's own Acts and court decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
The general deduction provision lives in section 8-1 of the ITAA 1997: you can deduct expenses incurred in earning your assessable income, provided they're not private, domestic, or capital. The whole framework hangs off that one section.
The most-claimed category is work-related deductions — uniforms and protective clothing, tools and equipment, union fees, professional subscriptions, and travel between workplaces. Where an expense is mixed work-and-personal, only the work-related portion is claimable.
For working from home, the ATO's fixed rate method currently runs at 67 cents per hour covering electricity, internet, phone, and stationery — but you must keep an actual hours worked log, not an estimate.
Self-education expenses are deductible where the course is directly related to your current job or likely to lead to higher income in that job. The connection has to be real — you can't claim a course for a completely new career.
Above $300 in deductions, you need written evidence — receipts or invoices. Below $300 you still need to have actually spent the money. The ATO's data analytics flag claims that look unusual for your occupation and income level, so the story has to add up.
When does it apply?
This applies to all taxpayers who spend money to earn income.
- You must have spent the money yourself and not been reimbursed by your employer.
- The expense must be directly related to earning your income.
- You must have a record to prove it (receipt, bank statement, diary log).
What to Do If the ATO Disallows Your Australian Tax Deduction Claim
- Keep all receipts and records for 5 years from the date you lodge your return.
- Use the ATO app to photograph and store receipts throughout the year.
- Apportion expenses that are partly private — only claim the work percentage.
- If working from home, keep a log of hours worked to use the 67 cents per hour fixed rate.
- Check ATO occupation guides for deductions common to your profession.
What should you NOT do?
- Don't claim expenses your employer paid for or reimbursed you for.
- Don't claim private expenses — commuting from home to your regular workplace is not deductible.
- Don't round up or estimate — claims must reflect actual spending with evidence.
- Don't claim self-education for a new career unrelated to your current job.
- Don't copy another person's deductions — the ATO uses data analytics to flag unusual claims for your occupation and income level.
Use the jurisdiction bar at the top of the page to pick your state — you'll see how state law differs from Australian federal law.
6 states available
Common Questions
When does tax deductions apply?
This applies to all taxpayers who spend money to earn income.You must have spent the money yourself and not been reimbursed by your employer.The expense must be directly related to earning your income.You must have a record to prove it (receipt, bank statement, diary log).
What should I do if the ATO in Australia rejects or disallows a work-related tax deduction I claimed?
Keep all receipts and records for 5 years from the date you lodge your return.Use the ATO app to photograph and store receipts throughout the year.Apportion expenses that are partly private — only claim the work percentage.If working from home, keep a log of hours worked to use the 67 cents per hour fixed rate.Check ATO occupation guides for deductions common to your profession.
What mistakes should I avoid with tax deductions?
Don't claim expenses your employer paid for or reimbursed you for.Don't claim private expenses — commuting from home to your regular workplace is not deductible.Don't round up or estimate — claims must reflect actual spending with evidence.Don't claim self-education for a new career unrelated to your current job.Don't copy another person's deductions — the ATO uses data analytics to flag unusual claims for your occupation and income level.
Tax Deductions in other states
Same topic, different jurisdiction. Pick the one that applies to you.