If you’re a construction worker or tradie, your job comes with more than physical work. It comes with real expenses. Vehicles, tools, safety gear, training, and after-hours admin all cost money.
In Australia, many of these costs are tax-deductible when they directly relate to your work. Claiming the right deductions reduces your taxable income and can increase your refund.
Claiming the wrong expenses can attract ATO attention.
In 2025, tradies must keep clear records and follow specific rules for vehicles, work clothing, equipment, and home office use. Knowing what you can claim, and how to claim it correctly, helps you stay compliant and keep more of what you earn.
1. Drive Down Your Tax: Motor Vehicle Expenses Tradies Can Claim
For most tradies, a vehicle is essential for getting to jobs, picking up supplies, and meeting clients. The ATO allows you to claim car expenses that relate directly to earning your income, but there are rules to follow.
Tracking with the Logbook Method
Using a logbook is the most accurate way to claim motor vehicle expenses. You track your car usage for 12 continuous weeks, noting kilometres travelled for work versus personal trips. The percentage of work travel is then applied to expenses such as fuel, insurance, registration, and maintenance. Logbooks remain valid for up to five years if kept properly.
Claiming via the Cents-per-Kilometre Method
Alternatively, you can use the cents-per-kilometre method, claiming up to 5,000 business kilometres per car per year. For 2025, the ATO rate is 78 cents per kilometre. This method is simpler, but you must calculate kilometres reasonably and keep a diary or notes to back your claim
Learn more about vehicle deductions on the ATO website.
Pro Tax Tip: Parking fees and tolls can also be claimed if they’re for work-related travel and you’ve already paid them yourself.
2. Gear Up for Deductions: Work Clothing and Protective Equipment
Safety is a must on every site, and the ATO allows you to claim work-related clothing and protective gear. Only items required for your job can be claimed, no casual jeans or street shoes.
Eligible Items Include:
- Compulsory uniforms with a company logo
- High-visibility clothing, overalls, heavy-duty work shirts and pants
- Steel-capped boots, gloves, safety glasses
- Fire-resistant clothing
- Sun protection and sunscreen
You can also claim the cost of laundering, repairing, or replacing these items if they are directly related to work.
Pro Tax Tip: Keep receipts and label all clothing clearly if it’s a uniform, as this will make substantiating claims easier during an audit.
3. Level Up Your Skills and Your Tax Return: Training and Education Costs
If you’re upgrading your skills or attending work-related courses, the costs can often be claimed. The ATO allows deductions for self-education directly related to your current job.
What You Can Claim:
- Course fees, seminars, workshops, and conferences
- Textbooks, stationery, and online resources
- Internet access and computers used for study
- Travel and accommodation if the training is away from your usual workplace
Important: You can only claim courses related to your current income.
Case Study: Claiming Work-Related Training
James is a licensed plumber who wants to stay up to date with industry standards. He enrols in an advanced plumbing course to improve his skills and efficiency on the job. Because the course directly relates to his current work, James can claim the full cost as a tax deduction.
On the other hand, if James decided to take a course in electrical work to switch careers, this expense would not be deductible, as it doesn’t relate to his current income-earning role.
Pro Tax Tip: Keep all receipts and invoices, these make claiming straightforward and reduce the risk of an audit.
4. Home Base, Big Savings: Claiming Home Office Expenses as a Tradie
Even if most of your work is on-site, you might have a home office or study. You can claim a portion of your running costs if you use it for work.
Fixed-Rate Method
For 2025, the ATO allows $0.52 per hour for heating, cooling, lighting, and depreciation of furniture. This is simple and doesn’t require detailed calculations.
Actual Expense Method
Alternatively, you can claim a proportion of actual expenses such as:
- Mortgage interest or rent
- Council rates, land tax, house insurance
- Internet, phone, stationery, and office equipment
The key is apportioning business vs private use accurately. If clients visit your home office, you can also claim a percentage of occupancy costs.
Pro Tax Tip: Keep a diary or spreadsheet to record hours spent working from home to make apportionment easier.
5. Tools of the Trade: Equipment Costs You Can Deduct
Tools and equipment are essential for construction workers and tradies. If you own your tools, you can claim the costs as a tax deduction.
Eligible Expenses Include:
- Purchasing tools and equipment
- Repairs and maintenance
- Insurance on tools
- Interest on money borrowed to buy tools
- Computers, tablets, and smartphones used for work
Immediate deduction vs depreciation:
- Items under $300 can be claimed immediately
- Items over $300 must be depreciated over their effective life
Pro Tax Tip: If a tool is used both for work and personal use, only claim the work-related portion.
6. Extra Wins: Other Work-Related Expenses That Can Reduce Your Tax
Beyond the obvious costs, there are other deductions tradies shouldn’t overlook:
- Union fees and professional memberships
- Industry journals, periodicals, and trade magazines
- License renewals (but not the initial license cost)
Keeping all receipts, bills, and bank statements ensures you can substantiate your claims.
Pro Tax Tip: Speak to your tax agent, they can help you identify every eligible deduction and guide you on record-keeping. Contact ITP Accounting Professionals for expert advice.
Frequently Asked Questions
Can I claim my mobile phone and internet?
Yes, if used for work purposes. Only the business-use portion can be claimed, and you must keep a record of work-related usage.
What if I use my car for both work and personal travel?
Only claim the work-related percentage. Using a logbook or kilometre diary helps you calculate this accurately.
Can I claim meals while on the job?
Meals can generally only be claimed when travelling overnight for work. Daily lunches at your usual workplace are not deductible.
Ready to save on tax this year?
Claiming the right tax deductions can save you thousands each year and make running your trade more affordable. From motor vehicle costs and protective gear to training, home office expenses, and tools, every deduction counts.
Working with ITP Accounting Professionals ensures you claim everything you’re entitled to while staying compliant with the ATO. Our experts provide personalised advice for construction workers and tradies across Australia, helping you maximise your tax return and keep your finances in check.
More Helpful Articles:
Maximise Your Savings: Your Complete Guide to Rental Property Tax Deductions
Maximise Your Tax Savings: A Comprehensive Guide to Tax Deductions
Tradies: Don’t Miss Out On Your Quick Cash
Small Business Tax Changes 2025-26: Complete Guide to Rates, Concessions & Deductions
Protect Your Business from Tax Scammers: 2025 Complete Business Security Guide
Disclaimer: This information is general in nature and does not take into account your personal financial situation. For personalised advice, consult a registered tax agent.