Tax guide: Claiming Business Expenses

STEP 3 | Small business tax 101

Maximize Your Deductions to Lower Your Tax Bill

Key takeaways:

Identify and claim eligible business expenses
Leverage industry-specific deductions
Track expenses efficiently with Sole
Sole app tax guide for claiming business expenses and maximizing deductions in Australia

Running Your Own Business and Deductions

As a sole trader, you can claim deductions on expenses directly related to running your business. These deductions reduce your taxable income, which means you pay less tax. Understanding what counts as a business expense is crucial for maximising your deductions.

What Counts as a Business Expense?

Business expenses are costs incurred in the ordinary course of running your business. These can include office supplies, travel expenses, and marketing costs. For a comprehensive list of deductible expenses, visit the ATO’s guide on deductions you can claim.

What is the Best Way to Track Business Expenses?

Tracking expenses accurately is crucial for maximising your ATO-approved deductions and minimising your tax bill. Sole makes this easy by allowing you to record and categorise expenses, attach receipts, and generate reports. This helps ensure you don’t miss any eligible deductions and keeps your financial records in order.

Industry-Specific Deductions

Certain industries have unique deductible expenses. Below are some examples. If your industry is not listed you can find the full list published by the ATO here.

  1. Cleaners

    Find the full list of Cleaners’ Income and Work-Related Deductions here

  2. Community Support Workers and Carers

    Find the full list of Community Workers and Direct Carers’ Income and Work-Related Deductions here

  3. Fitness Professionals

    Find the full list of Fitness and Sporting Industry Employees’ Income and Work-Related Deductions here

  4. Hairdressers and Beauty Professionals

    Find the full list of Hairdressers and Beauty Professionals’ Income and Work-Related Deductions here

  5. IT Professionals

    Find the full list of IT Professionals’ Income and Work-Related Deductions here

  6. Media Professionals

    Find the full list of Media Professionals’ Income and Work-Related Deductions here

  7. Performing Artists

    Find the full list of Performing Artists’ Income and Work-Related Deductions here

  8. Recruitment Consultants

    Find the full list of Recruitment Consultants’ Income and Work-Related Deductions here

  9. Sales and Marketing Professionals

    Find the full list of Sales and Marketing Managers’ Income and Work-Related Deductions here

  10. Tradespeople

    Find the full list of Tradesperson Income and Work-Related Deductions here

  11. Real Estate Professionals

    Find the full list of Real Estate Professionals Income and Work-Related Deductions here

  12. Teachers and Education Professionals

    Find the full list of Teachers and Education Professionals Income and Work-Related Deductions here

More business tax resources

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Frequently asked questions

    What is the “Instant Asset Write-Off” and can I use it?

    As of February 2026, the $20,000 instant asset write-off threshold is active for small businesses. This means if you buy a piece of equipment (like a new computer for an IT pro or a heavy-duty drill for a tradie) costing less than $20,000, you can deduct the full amount in one go rather than “depreciating” it over several years.

    Can I claim my home office if I’m a freelancer?

    Yes. You generally have two choices: the fixed rate method (currently 67 cents per work hour, covering electricity, gas, stationery, and internet) or the actual cost method. If you use the fixed rate, you don’t need a dedicated “office” room, but you must keep a record of all hours worked from home.

    How do industry-specific deductions work?

    The ATO recognises that a “necessary expense” looks different for a PT than it does for a Graphic Designer.

    • Fitness Pros: Might claim sunscreen if training clients outdoors, or gym equipment.
    • Tradies: Might claim protective gear (steel caps) and high-vis clothing.
    • Creatives: Might claim specialized software subscriptions (Adobe) or gear insurance. Check the links in the guide above to see the specific “hidden” deductions for your trade.

    Do I need to keep physical paper receipts?

    No. The ATO accepts digital photos of receipts as long as they are clear and show the supplier, amount, nature of the goods, and date. Using the Sole App to snap a photo the moment you buy something is the best way to ensure you never lose a deduction to a faded or lost piece of thermal paper.

    What happens if I forget to claim an expense?

    If you’ve already lodged your return, you can usually request an amendment through your tax agent or myGov. However, it’s much easier to use a “live” tracking system like Sole throughout the year so that come June 30, your list of deductions is already complete and ready to go.