Published: 4 March 2026 | FY 2025-26

Tax Deductions List Australia: What You Can Claim in 2025-26

Tax time doesn't have to be stressful. One of the simplest ways to boost your refund (or reduce what you owe) is by claiming all the work-related expenses you're entitled to. This comprehensive guide covers the most common tax deductions available to Australian workers in the 2025-26 financial year, helping you keep more of your hard-earned money.

Whether you're an employee, freelancer, or running a side hustle, understanding what you can and can't claim makes a real difference to your bottom line. Before we dive in, you might want to check your current tax position using our take-home pay calculator to see how deductions could impact your net income.

What Makes an Expense Tax Deductible?

Not every dollar you spend is deductible. The Australian Taxation Office (ATO) has clear rules about what qualifies as a legitimate work-related expense. To claim a deduction, you must have spent the money yourself (and not been reimbursed), the expense must directly relate to earning your income, and you need to keep proper records to prove it.

Records don't need to be fancy—a simple receipt, invoice, or bank statement will usually do. The ATO recommends keeping records for five years from the date you lodge your tax return. For expenses under $10 where you don't have a receipt, you can still claim up to a total of $200 in work-related expenses without receipts, though proper documentation is always better.

Work-Related Expenses You Can Claim

The ATO allows deductions for a wide range of work-related costs. Here are the most common categories Australian workers can claim:

Home Office Expenses

If you work from home, even occasionally, you can claim a portion of your home running costs. For the 2025-26 financial year, the ATO continues to offer a revised fixed rate method of 67 cents per hour worked from home. This rate covers electricity, gas, phone, internet, stationery, and the decline in value of office furniture.

To use this method, you must keep a record of your actual hours worked from home—either a diary, timesheet, or roster. You'll also need at least one receipt for each type of expense covered by the fixed rate. If you prefer, you can use the actual cost method instead, which requires more detailed record-keeping but may result in a larger deduction if your costs are high.

Vehicle and Travel Expenses

Using your personal vehicle for work purposes? You may be able to claim car expenses. Note that normal commuting between home and work is not deductible—this applies to travel between workplaces, client visits, or trips to collect supplies.

The ATO offers two methods for calculating vehicle deductions in 2025-26:

Other work-related travel—such as flights, accommodation, and meals when travelling overnight for work—is also deductible, provided you weren't reimbursed by your employer.

Work Clothing and Laundry

You can claim the cost of buying, repairing, and cleaning occupation-specific clothing, protective clothing, and unique uniforms that your employer requires you to wear. Standard business attire like suits and office dresses don't qualify, even if you only wear them to work.

For laundry expenses, you can claim $1 per load if the load consists only of work-related clothing, or 50 cents per load if mixed with personal items. No receipts are needed for laundry claims under $150.

Self-Education and Training

Course fees, textbooks, stationery, and travel for self-education are deductible if the study directly relates to your current employment and maintains or improves your skills. You cannot claim expenses for education that enables you to get a new job or start a new career.

For example, a nurse studying for an advanced nursing qualification can claim the costs, but someone studying nursing to become a nurse for the first time cannot. Professional development seminars, conferences, and workshops related to your current role are generally deductible.

Other Common Tax Deductions

Tools and Equipment

If you purchase tools or equipment for work use, you can claim an immediate deduction for items costing $300 or less. For items over $300, you'll need to claim depreciation (decline in value) over the item's effective life. This includes computers, phones, tools, and professional reference books.

Union Fees and Professional Memberships

Annual fees for unions, professional associations, and industry bodies are fully deductible. If your profession requires ongoing registration or licensing, those fees are deductible too. However, joining fees and levies for things like strike funds are not deductible.

Income Protection Insurance

Premiums for income protection insurance (sometimes called salary continuance insurance) are tax deductible when paid separately from your superannuation. If the insurance is held within your super fund and paid via contributions, it's not deductible on your personal return.

Charitable Donations

Donations of $2 or more to deductible gift recipients (DGRs) are tax deductible. This includes most registered charities, but always check that your chosen organisation has DGR status. Political donations and donations to crowdfunding campaigns for individuals are not deductible.

Investment-Related Expenses

If you earn investment income, related expenses are deductible. This includes bank fees on investment accounts, investment property costs (interest, repairs, agent fees, insurance), and fees paid to financial advisors for investment advice. Note that you cannot claim expenses for generating exempt income, such as interest from tax-free government bonds.

Superannuation Contributions

Personal super contributions (after-tax) may be tax deductible if you're eligible and submit a Notice of Intent to Claim form to your super fund. This is particularly useful for freelancers, sole traders, or employees whose employers don't offer salary sacrifice arrangements.

Keep in mind the concessional contributions cap for 2025-26 is $30,000, which includes employer contributions, salary sacrifice, and any personal contributions you claim as a tax deduction. For more details, check our superannuation calculator.

What You Cannot Claim

Understanding what isn't deductible is just as important. The ATO regularly flags these common mistakes:

• Commuting costs: Travel between home and your regular workplace is never deductible, even if you take work calls or check emails during the journey.
• Personal clothing: Standard business attire, even if you only wear it for work, is not deductible unless it's a specific uniform or protective clothing.
• Personal grooming: Haircuts, cosmetics, and fitness expenses are generally not deductible, even if your job has appearance requirements. Limited exceptions apply for specific performing arts occupations.
• Meals and entertainment: Daily lunches and coffee are personal expenses. You can only claim meals when travelling overnight for work or when working overtime under specific award conditions.
• Private use of work items: If you use a work computer, phone, or vehicle for personal purposes, you must apportion your claim to exclude private use.

Maximising Your Tax Refund

The key to maximising your refund is keeping good records throughout the year. Set up a simple system—whether that's a folder, spreadsheet, or app—to capture receipts and log work-related expenses as they happen. Come tax time, you'll thank yourself.

Remember that deductions reduce your taxable income, which in turn reduces your tax liability. For someone in the 30% tax bracket (income between $45,001 and $135,000), every dollar claimed as a deduction saves 30 cents in tax, plus the 2% Medicare levy.

If you have a HECS-HELP debt, remember that deductions don't reduce your repayment income for HECS purposes. The ATO adds back certain deductions when calculating how much you must repay. Similarly, if you're subject to the Medicare Levy Surcharge due to high income and no private hospital cover, deductions won't help you avoid it.

Tax Offsets That Boost Your Refund

Beyond deductions, you may be eligible for tax offsets (sometimes called rebates) that directly reduce your tax payable. The Low Income Tax Offset (LITO) provides up to $700 for those earning up to $37,500, phasing out completely at $66,667. Unlike deductions, you don't need to claim these—ATO applies them automatically.

Other offsets include the Low and Middle Income Tax Offset (LMITO, which has ended), the Seniors and Pensioners Tax Offset, and offsets for maintaining an invalid or carer. Check the income tax page for current offset information and how they affect your final tax bill.

When to Use a Tax Agent

For straightforward returns with standard work deductions, lodging yourself through myTax is usually sufficient and free. However, consider using a registered tax agent if you have:

• Rental property income and expenses
• Significant investment income or capital gains
• Business or self-employment income
• Multiple sources of income
• Complex deductions or disputed claims

Tax agent fees are themselves deductible, and agents typically have extended lodgement deadlines (May 2027 for 2025-26 returns) provided you register with them by 31 October 2026.

Summary: Key Takeaways for 2025-26

Claiming legitimate tax deductions is your right as an Australian taxpayer, but it's important to play by the rules. Keep records, only claim what you're entitled to, and don't be tempted by inflated or false claims—the ATO's data matching technology is increasingly sophisticated.

The most common deductions for employees include home office expenses (67 cents/hour), work-related vehicle costs, uniforms, self-education, and union fees. Always separate work use from personal use, and remember that commuting and everyday clothing are not deductible.

To see exactly how deductions affect your bottom line, use our calculators to estimate your position. Understanding your income tax, Medicare levy, and take-home pay helps you plan better throughout the year and avoid surprises at tax time.