Handling taxes can be a major headache for tradies. With the demands of the job and piles of paperwork, it’s easy to overlook some of the deductions you’re entitled to claim. Identifying all your eligible trade-related tax deductions can lead to a larger tax refund or reduced tax liability. Whether you’re on the tools every day or overseeing a team, making sure what you can claim in taxes can help protect your hard-earned income. In this blog, we’ll break down the top tax deductions for tradies so you know exactly where you can save.

Understanding the Tradie Tax Deductions

Tax deductions for tradies are essentially work-related expenses that you can subtract from your taxable income. The lower your taxable income, the less tax you’ll need to pay. For instance, if you earn $80,000 and claim $10,000 in deductions, you’ll only be taxed on $70,000.

However, not every expense is claimable. According to the ATO, there are a few key conditions that must be met:

• The expense must be directly related to your work.
• You must have paid for it yourself without being reimbursed.
• You need to keep evidence such as receipts, invoices, or bank statements.

Because the ATO has strict rules, staying organised with your records is essential. Using accounting software or an expense-tracking app can make this easier. At Taxgain, we specialise in tradie tax returns. Our expert tax team knows the specific deductions available to tradies and can help you get the most out of your return.

Top Tax Deductions Available for Every Tradie

Not sure what you can claim? Here are some of the most common tax deductions for tradies, based on the official ATO guidance.

1. Tools and Equipment

If you acquire tools or equipment required for your work, you can usually claim them as a tax deduction. This includes items like power tools, hand tools, toolboxes, ladders, and safety gear. For items costing $300 or less, you can usually claim the full amount immediately. For anything over that amount, the cost may need to be spread out over several years through depreciation. Don’t forget—expenses for maintaining or repairing your tools are also deductible.

2. Vehicle Expenses

Do you use your car or ute to travel to different job sites? If so, you may be eligible to claim some of your vehicle expenses, including fuel, registration, insurance, servicing, repairs, and even depreciation. There are two methods tradies can use to calculate these deductions:

• Cents per kilometre (for up to 5,000 km per year)
• Logbook method, which allows you to claim a percentage of your total running costs based on work-related use

Keep in mind that travel between your home and your regular workplace generally isn’t deductible. However, trips to different job sites or temporary work locations do count—just be sure to keep detailed records of your travel through a logbook.

3. Work Clothing and Protective Gear

Tradies can claim expenses for purchasing, cleaning, and maintaining protective clothing, such as steel-capped boots, high-vis vests, gloves, and safety glasses. Branded workwear featuring your business logo is also tax-deductible. However, everyday clothing like jeans or plain shirts isn’t eligible for a deduction, even if you wear them while working.

4. Phone and Internet Bills

If you use your phone for work-related tasks—like taking client calls, scheduling jobs, or communicating with customers—you can claim a portion of your phone and internet expenses. To do this, you’ll need to find out what percentage of your usage is for business versus personal use. Keeping a usage log for a couple of weeks can help you estimate this accurately and support your claim.

5. Licences, Training, and Education

When it comes to tax deductions for tradies, licences and certifications required for your current role, such as white cards, forklift licences, or safety training, are generally eligible. You can also claim expenses for job-related training or upskilling courses, as long as they directly relate to your existing trade.

6. Insurance

If you’ve taken out income protection insurance outside of your super fund, you can claim it as a tax deduction. Work-related policies like public liability insurance and tool insurance are also deductible. Just be sure the coverage is specifically tied to your trade—general home or contents insurance doesn’t qualify unless you are using part of the house for running the trade and/or keeping tools at home.

7. Home Office Expenses

Do you run your business or do admin work from home? You may be able to claim a fraction of your costs for the home office, such as:

• Electricity for lighting and heating
• Internet usage
• Office furniture (desk, chair)
• Stationery and printer supplies
• Rent payment, subject to conditions

There are different ways to calculate this, including a fixed-rate method or an actual cost method. The best option depends on your setup.

8. Travel Expenses

If your job requires you to travel and spend the night away from home, you may be able to claim expenses such as accommodation, food, and other travel-related fees. However, the travel must be strictly for business purposes to qualify. It’s important to keep all relevant records and receipts to support your claim.

Common Mistakes Tradies Should Avoid During Tax Time

Tax deductions for tradies can help you keep more of your hard-earned money, but mistakes can lead to trouble. Here are some common errors to watch out for:

• Claiming personal expenses, like a phone used mostly for personal calls, or everyday clothing.
• Failing to organise and keep receipts for your purchases.
• Guessing your vehicle usage instead of properly tracking it.
• Forgetting to apply depreciation to large purchases.
• Skipping professional advice and missing out on legitimate claims.

At Taxgain, we’ve seen many tradies lose money simply because they weren’t aware of what they could claim. Whether you need assistance with tax or comprehensive accounting services, or just help organising your records, we’re here to reduce your tax burden.

Let Taxgain Help You Maximise Your Return

Saving on taxes and staying compliant with the ATO doesn’t need to be complicated. At Taxgain, we’ve supported many tradespeople—plumbers, electricians, concreters, carpenters, landscapers, and more—in reducing their tax burden, managing bookkeeping, handling GST, and securing business finance. With offices in Sydney and the flexibility to assist you by phone or online, we’re here to help you with tax deductions for tradies.

Ready to make tax time hassle-free? Book a free consultation today, and let us help you optimise your taxes and stay on top of ATO compliance.