tax deductions

When it’s that time of the year when you have to file your tax return, also consider any work related expenses that you can claim as tax deductions.

In this fast paced world, if you’re getting to save any pennies, save them! Tax deductions can help you in reducing your taxable income.

Now if you wanna know how you can save those extra dollars, keep reading this article. We’ll help you to know all about tax deductions and how you can claim them.


How do Tax Deductions Work?

Tax deductions reduce the amount of your income that is subjected to tax which means that your tax liability is also reduced.

You have to file your tax deductions at the same time you file your tax return for that financial year, starting on 1 July and ending on June 30. That expense which you are claiming must be from the same financial year. It can’t be an expense from the previous year.

Before claiming it, make sure that it is a work related expense. You must have paid the expense yourself without being repaid. You must have a record of that expense such as a receipt or bill.

The ATO has an app for it which is free of cost and keeps track of your deductions myDeductions. It helps you to lodge your tax deductions in a snap by uploading a picture of the bill or receipt. It can be used by anyone, by employees or by sole traders as well. It helps you to keep track of your expenses.

tax deductions

How to Identify Tax Deductions?

To identify expenses as tax deductions, here are a few questions you need to ask yourself:

  • Was that expense directly work related or relating to your income earning?
  • You paid the money by yourself and didn’t get repaid by your employer for that?
  • Do you have a record of that expense such as a receipt?

If that expense is meant for both personal and work related use, then before claiming tax deductions, you have to calculate the portion that’s meant for work related or income generating expense.

Which Expenses can you Claim as Tax Deductions?

Here are the work-related expenses that you can claim as tax deductions:

  • Travel expenses and Vehicle

If you are using your own car for a work related activity, you can claim the cost it took you for that job such as the fuel cost. Travelling to work daily is not considered as a tax deduction as it is a personal expense. Also you cannot claim minor work activities.

But using your car for another work activity or a long work tour is a claim that you can make. Or if you have rented a car for work activity, you can claim that as a tax deduction as well.

If you have gone for a work trip, you can claim all the costs for it such as the travel cost, accommodation cost, your meals etc.

But the most important thing is to keep all the records of the activities you do. Otherwise it will give you a tough time and you as well just give up on the thought of tax deductions due to the efforts at the last minute. So you better keep records.

  • Clothing and Laundry Expenses

Employees are often obliged to follow a certain dress code or wear a certain colour. But following that is not tax deductible. It’s a personal expense.

For clothing expenses to be considered as a tax deduction, they need to meet specific criterias.  Such as if you buy clothes for a special work occasion or protective clothing used on sites etc. They can be considered as tax deductible. In order to claim these costs, you have to have receipts and records of them.

  • Work from Home Expenses

In this world where everything can be done online, most of the people work from home now. If you are also working from home, you should know which expenses you can claim as tax deductible. You must be using a computer or phone or printers for work at home.

You can claim the expenses related to these devices such as electricity, internet expenses or printer ink etc. Generally you can claim equipment costing up to $300 or a decline in value of the items costing $300.

  • Education and Training Expenses

If your education is directly linked with your work, then you claim it as a tax deduction such as you are joining a course that will help enhance your work skills and increase your income.

The textbooks, fees and other such needs can be counted as tax deductions.

If that education or training is not directly related or required by your work then it can not be claimed.

  • Tools and Equipment Expenses

You are also capable of claiming for any sort of tool or equipment that is your work demand. Most employers repay their employees for the cost of the equipment up to some extent but anything beyond that limit is considered as tax deductible.

If it’s equipment worth $300 or less, then it can be claimed immediately when you buy it. It also shouldn’t be from a set that costs more than $300.

If the tool cost more than $300 or was from a set that costs more than $300, you can also claim a decline in its cost overtime.

  • Gifts and Donations

If the organisation you’re gifting or donating to has the status of being a Deductible Gift Recipient (DGR), then only you can claim the gift or donation as tax deductible. Here are a few conditions:

The gift should truly be a gift and it should meet with the conditions of the DGR so it’s always better to check. The gift or donation should be property, money or a financial asset.

You can claim a deduction when the amount of the gift is more than $2.

You must have all the bills and receipts of the things in order to claim them.

tax deductions



Here are the things that you can claim if you are working from home in Australia:

  • Electricity bills
  • Internet bills
  • Computers
  • Laptops
  • Printers
  • Phone calls
  • Office furniture.

You can claim up to 5000 business kilometres without receipts but it is recommended to show a substantiation. This means that the cents per kilometre you use for business travel doesn’t require receipts. 

Here are a few more common examples of things you can claim without receipt but they have a few conditions from the ATO:

  • Work from home expenses.
  • Work related clothing expenses.
  • Gift and donations if it costs less than $10.
  • Self education expenses.
  • Tools and equipment.

Gifts that are given to increase the future earnings are tax deductible. Also you can claim them when they cost more than $2.

That percentage is directly proportional to your work and work expenses.

It depends upon your salary. The tax rate on salary is decided according to the income such as: 

  • For $0 – $18,200, the tax rate is nil.
  • For $18,201 – $45,000, the tax rate is 19%.
  • For $45,001 – $120,000, the tax rate is 32.5%.
  • For $120,001 – $180,000, the tax rate is 37%.
  • For $180,000 and above, the tax rate is 45%.


Tax deductions are important for your finances as they help you save. But before claiming them, you need to identify them. For that, the ATO has specific rules and conditions for each category.

After identifying them, you have to claim them. And for that, it’s important to have all the records and receipts.

We have explained all these things in detail in this guide. It will definitely help you in claiming your expenses back.


Information and statistics for This Project provided by My Tax Daily.