Updated May 2026 · 11 min read

Trade Business Tax Tips for Australian Tradies 2026 — What You Can Claim

Most tradies leave thousands of dollars on the table at tax time. Not because they're dishonest — because they don't know what they can claim. Here's the plain-English 2026 rundown of the deductions that matter most for Australian trade businesses.

1. Tools and equipment — the instant asset write-off

For the 2024-25 income year, eligible small businesses (under $10M turnover) can immediately deduct the cost of assets up to $20,000 each, instead of depreciating them over years. That covers most of what tradies actually buy — impact drivers, mitre saws, generators, ladders, scaffold, ride-on mowers, vacuum trucks under threshold, you name it.

The $20,000 cap is per asset, not total — so you can buy three $15,000 tools and write each one off in full. Anything over $20,000 goes into the small business depreciation pool.

Watch out: The threshold has bounced between $1,000, $30,000 and $20,000 in recent years. Confirm the current rule before you buy.

2. Work vehicle — log book vs cents-per-km

Two methods. The right one depends on how much you drive.

Cents-per-km:Up to 5,000 work km a year at the ATO's set rate (88c/km for 2024-25). No log book required. Maxes out at $4,400 deduction. Suits tradies with low work driving or a side hustle.

Log book:Keep a 12-week log once (then re-do every 5 years), record work vs private km, claim that percentage of all vehicle expenses — fuel, servicing, insurance, rego, depreciation, lease/finance interest. For a tradie doing 30,000 km/yr at 80% work use, this often beats $15,000 in deductions. Almost always wins for full-time tradies.

One-tonne utes and vans designed primarily to carry goods are usually exempt from FBT and can be claimed at 100% if used solely for work — another reason ute is the tradie default.

3. Phone and internet

Claim the work-related percentage of your phone bill and home internet. Most tradies sit at 70–90% work use. The ATO wants you to substantiate the percentage with a 4-week representative diary — do that once and you can apply the same percentage for years.

4. Work clothing and PPE

Fully deductible:

• High-vis shirts, pants, jackets
• Steel-cap boots
• Safety glasses, hard hats, ear muffs, dust masks
• Sun protection (high-vis sunglasses, sunscreen, hats — if you work outdoors)
• Branded work shirts/uniforms with your logo
• Laundry of those items (up to $150 without receipts)

Not deductible:Plain jeans, plain t-shirts, sneakers, regular clothes — even if you only wear them on the job.

5. Training and licensing

Fully deductible if it relates to your current trade:

• ARC refrigeration licence renewal (HVAC)
• QBCC licence fees (Queensland builders)
• Electrical licence renewals
• White card, working at heights, first aid, EWP tickets
• Industry conferences and CPD courses
• Trade association memberships (MPA, NECA, MBA, etc.)

Not deductible:Training to switch into a different trade. The ATO sees that as becoming “a new income earner”, not improving the current one.

6. Home office

Even tradies do paperwork. If you run quotes, invoices, BAS and customer calls from a dedicated space at home, you can claim a portion of electricity, internet, phone and occupancy. The fixed-rate method (67c/hr in 2024-25) is the simplest — just keep a record of hours worked from home.

7. Subscriptions and software

All fully deductible business expenses:

• ServiceM8 / Tradify / Fergus
• Xero / MYOB
• BackOnTools (AI receptionist)
• Hubdoc / Dext
• Canva Pro
• Microsoft 365 / Google Workspace
• Mobile reception boosters

8. Insurance

Fully deductible: public liability, tool insurance, workers' comp (if you have employees), professional indemnity, commercial vehicle insurance, building/contents insurance for business premises. Income protection is also deductible if it pays out ordinary income.

9. Fuel

For a mobile tradie this is huge. Keep every fuel receipt — if you're on log book method, fuel is one of the biggest line items in your vehicle expense pool. Tap-and-pay receipts on a fuel card make this almost effortless when paired with Hubdoc.

What you can't claim

• Driving from home to your regular workshop (private travel)
• Everyday clothes — even “work jeans”
• Meals during a normal work day (only when travelling away from home overnight)
• Fines and traffic infringements
• The private portion of any expense (no, not the “work ute” weekend ski trip)

The super trap most self-employed tradies fall into

If you're a sole trader or in a partnership, you don't have to pay super to yourself. Most don't. Most also have nowhere near enough super to retire on.

Voluntary concessional super contributions are tax-deductible up to the cap ($30,000 for 2024-25, including any amount your employer pays). Made before 30 June, that contribution drops your taxable income for the year and lands in your super fund taxed at 15% instead of your marginal rate. For a tradie on the 32.5% bracket, that's a 17.5% instant return before any market growth.

Catch-up: if you haven't used your full cap in recent years and your super balance is under $500k, you can carry forward the unused portion. Trade-specialist accountants flag this regularly — generic accountants miss it.

Accountant vs DIY: when to hire one

DIY (Xero/MYOB only):Workable if you're a true sole trader, under $80k revenue, no employees, no complicated structure. Use the ATO's myGovID + lodge yourself, or a $99 H&R Block-style return.

Hire a trade accountant ($1,200–$3,000/yr):Once you're over $150k revenue, have employees, run a Pty Ltd, use trusts, or have a vehicle/tool asset base over $50k. A specialist who knows trades will: structure you properly (sole trader vs company vs trust), find deductions you missed, optimise super contributions, prepare your BAS, and represent you in any audit. They almost always save more than they cost.

FAQs