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Every year, many Australians miss out on legitimate tax deductions simply because they are unsure about what they can claim. Whether you’re an employee, sole trader, contractor, freelancer, property investor or small business owner, understanding the deductions available for the 2025–26 financial year can help you reduce your taxable income and potentially increase your tax refund.
However, claiming tax deductions isn’t about claiming every expense you have paid during the year. The Australian Taxation Office (ATO) has specific rules about what can and cannot be claimed. An expense generally needs to be directly connected to earning your income, and you need to keep appropriate records to support your claim.
This guide covers 20 of the most common tax deductions Australians may be able to claim in 2026. Understanding these expenses can help you prepare your tax return more confidently while avoiding common deduction mistakes.
If your tax situation is more complex, working with an experienced tax accountant in Perth can help you identify eligible deductions and ensure your return is prepared correctly.
Before claiming any tax deduction, it is important to understand the basic requirements set by the ATO.
Generally, you need to have personally paid for the expense, the expense must be directly related to earning your income, and you must have a record to prove the expense.
If your employer has reimbursed you for an expense, you generally cannot claim that same expense as a deduction.
You should also be careful with expenses that have both private and work-related use. In these situations, you generally need to calculate and claim only the portion that relates to earning your income.
Keeping accurate records throughout the year can make tax time much easier and reduce the risk of incorrect claims.
Understanding which tax deductions you’re entitled to can help you reduce your taxable income and maximise your tax refund while staying compliant with Australian Taxation Office (ATO) requirements. Whether you’re an employee, sole trader, freelancer, or small business owner, knowing what you can legitimately claim makes tax time less stressful. Here are 20 common tax deductions Australians may be eligible to claim in 2026, along with important guidance to help you lodge your return with confidence.
If you use your own car for eligible work-related travel, you may be able to claim certain vehicle expenses.
For example, travel between different workplaces, travelling from your workplace to a client or travelling to another location for work may qualify depending on your circumstances.
However, ordinary travel between your home and your regular workplace is generally considered private and cannot usually be claimed.
The ATO provides different methods for calculating eligible car expenses, so it is important to use the method that applies to your circumstances and maintain the required records.
Travel expenses can be deductible when the travel is directly connected with your employment or income-earning activities.
Depending on the circumstances, eligible work travel may include flights, accommodation, taxis, rideshare services and certain other travel costs.
For example, if you need to travel to another city for a work conference or business meeting, some of the associated travel expenses may be deductible.
Private holidays and personal travel cannot generally be claimed simply because you perform some work during the trip. If a trip has both private and work-related components, the expenses may need to be apportioned.
With many Australians continuing to work from home, home office expenses remain an important area to consider when preparing a tax return.
Eligible working-from-home expenses can include certain additional running costs associated with working from home, depending on the ATO requirements and calculation method used.
The claim may relate to expenses such as electricity and other eligible running costs. Work-related phone and internet use may also be relevant, although these expenses need to be calculated appropriately.
You should keep records that demonstrate when and how you worked from home and how the deduction was calculated.
If you use your home internet connection to perform your job or operate your business, the work-related portion of your internet expenses may be deductible.
For example, an employee who regularly uses their home internet to attend online meetings, access work systems or complete work-related tasks may be able to claim an eligible portion of the cost.
If the internet is also used by your family or for personal activities, you generally cannot claim the entire bill. A reasonable method should be used to determine the work-related percentage.
Your mobile phone may be partly deductible if you use it for work-related purposes.
For example, making work calls, responding to clients, communicating with colleagues or using work-related applications may create a legitimate work-related use.
If you use the same phone for personal activities, only the eligible work-related portion can generally be claimed.
Keeping phone bills and records that support your calculation can help demonstrate how you determined the work-related percentage.
Computers, laptops, monitors and other equipment used to earn income may qualify for a tax deduction.
For example, if you purchase a laptop that you use to perform your employment duties or operate your business, the eligible work or business portion may be deductible.
The tax treatment depends on factors such as the cost of the item, how it is used and the applicable depreciation rules. More expensive assets may need to be depreciated over time rather than claimed as an immediate deduction.
If an item is used for both private and work purposes, you generally need to calculate the income-producing portion.
Software subscriptions can be an important deduction for employees, freelancers, contractors and business owners who rely on digital tools to perform their work.
Depending on the circumstances, this may include accounting software, design programs, project management platforms, professional software and other subscriptions directly connected with earning income.
For example, a graphic designer paying for professional design software may be able to claim the eligible business portion of the subscription.
The key consideration is whether the expense has a genuine connection with earning your income.
Education and training expenses may be deductible when they maintain or improve skills you already use in your current employment or business.
For example, a marketing professional completing a course to improve their existing digital marketing skills may potentially claim eligible course-related expenses.
However, not every course is deductible. Education that allows you to qualify for an entirely new occupation or profession may not meet the requirements for a work-related deduction.
Before claiming education expenses, consider whether the course has a direct connection with your current income-earning activities.
Membership fees paid to certain professional organisations, associations and industry bodies may be deductible when they are directly connected with your work or business.
For example, if membership of a professional association is relevant to your current occupation and helps you maintain your professional standing, the applicable membership cost may qualify.
You should retain invoices or membership records to support your claim.
Tools and equipment can be significant expenses for many Australian workers, particularly tradies, contractors and other occupations that require specialised equipment.
Depending on the circumstances, items such as hand tools, power tools, measuring equipment and other work-related equipment may qualify for deductions.
The way the deduction is calculated can depend on the cost and useful life of the item. Some items may be immediately deductible under applicable rules, while others may need to be depreciated.
If equipment is used partly for private purposes, only the eligible work-related portion should generally be claimed.
Sole traders and small business owners can have additional deductible expenses because they incur costs directly associated with operating their businesses.
Good bookkeeping is particularly important because business expenses need to be accurately recorded and separated from personal expenses.
Professional bookkeeping services Perth can help businesses maintain organised financial records and make it easier to identify legitimate business expenses throughout the year.
Insurance expenses that relate directly to running a business may generally qualify as deductions.
For example, a business may pay for insurance that protects its operations, equipment or other business-related risks.
The expense needs to be connected with the business rather than being a private insurance cost.
Keeping the relevant insurance invoices and policy records can help support the deduction when preparing your tax return.
If you operate your business from commercial premises, rent paid for those premises may generally be deductible.
Depending on your circumstances, other eligible costs associated with operating the premises may also be deductible.
However, private or domestic rental expenses do not automatically become deductible simply because you operate a business.
Where part of a property is used for business and part is used privately, specific rules may apply and the expense may need to be apportioned.
Advertising and marketing are common business expenses and can generally be deductible when they are incurred to promote your business and generate income.
This may include expenses for online advertising, social media campaigns, Google Ads, printed promotional materials, website promotion and other legitimate marketing activities.
For example, if a small business spends money on an online advertising campaign to attract new customers, that advertising cost may qualify as a business deduction.
Keeping invoices and payment records is important for supporting these claims.
Businesses often spend money on websites, domain names, hosting and ongoing website maintenance.
Depending on the nature of the expense, these costs may qualify for tax deductions.
For example, annual domain registration and website hosting expenses incurred to operate a business website may generally be deductible when they are directly connected with the business.
However, website development and other larger costs may receive different tax treatment depending on their nature. It is therefore important not to assume that every website-related expense can automatically be claimed in full.
Professional fees paid for eligible accounting, tax preparation and tax advice can be deductible in certain circumstances.
For example, fees paid to a registered tax agent for preparing your previous year’s tax return are generally deductible in the following income year.
Businesses may also incur accounting fees for preparing financial statements, managing business accounts and receiving professional tax advice.
Working with experienced accounting services Perth professionals can help ensure your financial records are properly maintained and eligible expenses are correctly identified.
Some legal expenses incurred in connection with running a business may qualify as deductions.
For example, certain legal costs directly related to business operations, contracts or resolving business matters may be deductible depending on their purpose.
However, not every legal expense is immediately deductible. Costs associated with acquiring capital assets or dealing with private matters may receive different tax treatment.
The purpose of the legal expense is therefore important when determining whether it can be claimed.
Australians who own rental or investment properties may also have expenses that qualify for tax deductions.
Property-related deductions can be more complicated because some expenses may be immediately deductible while others may need to be claimed over time.
Interest on money borrowed to purchase or maintain an income-producing investment property may be deductible, subject to the applicable tax rules.
For example, if you have a loan used to purchase a rental property that generates rental income, the eligible interest component may potentially be deductible.
However, the purpose of the borrowing is important. If a loan is used partly for private purposes, the interest generally needs to be apportioned accordingly.
Property investors who use a professional property manager may be able to claim eligible management fees associated with their rental property.
These expenses can include fees paid to manage the property and deal with tenants, subject to the applicable rules.
Maintaining invoices and statements from the property manager can make it easier to support the deduction when preparing your tax return.
Certain repairs and maintenance expenses associated with an income-producing property may be deductible.
For example, fixing damaged fixtures, repairing plumbing issues or carrying out routine maintenance may qualify depending on the circumstances.
However, improvements and major renovations are not necessarily treated in the same way as repairs. Some costs may be considered capital expenses and may need to be claimed differently.
Understanding the difference between a repair and an improvement is important when preparing a rental property tax return.
Insurance premiums associated with an income-producing property may generally qualify for deductions where they meet the relevant requirements.
Property investors may also have other eligible expenses connected with managing their rental property, depending on their individual circumstances.
Because rental property deductions can involve depreciation, repairs, interest and other complex areas, keeping detailed records and obtaining professional advice can help ensure the expenses are treated correctly.
Good record keeping is one of the most important parts of claiming tax deductions.
You should keep appropriate evidence such as receipts, tax invoices, bank statements, logbooks, travel records, phone and internet bills, course invoices, asset purchase records and other documents that support your claims.
Digital copies can also be useful as long as they are clear, complete and accessible when required.
For business owners, maintaining organised records throughout the year can also make BAS lodgement and annual tax reporting much easier.
Instead of trying to find every receipt at the end of the financial year, keeping records as you go can make the entire tax preparation process more efficient.
One of the biggest mistakes Australians make is assuming that every work-related expense is automatically deductible.
Private expenses generally cannot be claimed simply because you use the item occasionally for work. Mixed-use expenses also need to be appropriately divided between private and income-producing use.
Another common mistake is claiming expenses that have already been reimbursed by an employer. If your employer has paid you back for an expense, you generally cannot claim the same amount as a tax deduction.
Poor record keeping can also cause problems. Without appropriate evidence, you may not be able to substantiate your claim if the ATO asks for supporting documents.
Travel and clothing are two other areas where taxpayers can easily make incorrect claims. Ordinary commuting is generally private, while ordinary clothing is generally not deductible simply because it is worn at work.
Understanding the rules before lodging your return can help reduce the risk of incorrect deductions and potential ATO adjustments.
Tax rules can be complicated, particularly when you have multiple income sources, investments, rental properties or a business.
While some deductions are relatively straightforward, others depend on factors such as how the expense was used, whether it was partly private, when the expense was incurred and whether it should be claimed immediately or over time.
Professional tax advice can help you understand which deductions may apply to your circumstances and how they should be calculated.
An experienced tax accountant Perth can also help review your records, identify eligible expenses and ensure your tax return is prepared in line with current Australian tax requirements.
For business owners, professional accounting and BAS lodgement support can also make it easier to keep financial records accurate throughout the year.
Also read: Top 5 Small Business Tax Concessions You Should Know
Knowing which tax deductions you may be eligible to claim can help you avoid missing legitimate opportunities when preparing your Australian tax return.
The 20 deductions covered in this guide represent some of the more common expenses that may apply to employees, contractors, sole traders, business owners and property investors. However, eligibility always depends on your individual circumstances and the current ATO rules.
The most important approach is to claim only genuine expenses that are connected with earning your income and to maintain appropriate records to support every claim.
If your tax affairs involve business income, rental properties, investments or multiple sources of income, professional advice can provide greater confidence and help ensure your deductions are handled correctly.
Yes. If you work from home and meet the relevant ATO requirements, you may be able to claim eligible working-from-home expenses.
The amount you can claim depends on your circumstances and the calculation method used. You should maintain appropriate records to support the claim.
In most cases, no. Travel between your home and regular workplace is generally considered private and is not deductible.
Certain travel between workplaces or travel undertaken for specific work-related purposes may be deductible depending on the circumstances.
You may be able to claim the work-related portion of your mobile phone and internet expenses if they are used to earn your income.
If the services are also used privately, you generally need to calculate the appropriate work-related percentage rather than claiming the entire expense.
A laptop used for work or business purposes may qualify for a deduction, depending on its cost, use and the applicable tax rules.
If the laptop is used for both work and private purposes, only the eligible income-producing portion can generally be claimed.
Eligible fees paid to prepare your previous year’s tax return are generally deductible in the following income year.
Yes. Sole traders may be able to claim legitimate business expenses that are directly connected with earning their business income.
These can include advertising, business insurance, accounting fees, website expenses and other eligible operating costs.
Interest on borrowing used for an income-producing property may be deductible, subject to the applicable rules.
The purpose of the borrowing is important, particularly where a loan has been used for both private and investment purposes.
If your tax affairs include business income, rental properties, investments or multiple income sources, working with a qualified tax professional can help ensure your return is accurate and compliant.