Every June, thousands of tradies hand over a shoebox of receipts and hope for the best. The difference between a hopeful tax return and a healthy one is knowing what you’re entitled to claim — and making a few smart moves before 30 June rather than after.
This guide covers the main deductions for both employee tradies and ABN holders for 2025–26, and where the timing of a purchase or a finance decision changes what you get back.
First: are you an employee or running your own show?
The rules differ depending on how you work.
- Employee tradies (on wages, tools of trade supplied or not) claim work-related expenses against their salary.
- Sole traders and company/trust structures (ABN holders) claim business expenses, and get access to concessions employees don’t — including the $20,000 instant asset write-off.
Plenty of tradies are both during the same year — wages for part of it, ABN for the rest. Keep the records separate.
Tools and equipment
The classic tradie deduction, with one big fork in the road:
- Employees: tools costing $300 or less are deductible immediately. Over $300, you claim depreciation over the tool’s effective life. A $260 drill is an instant deduction; a $2,800 drop saw is claimed over several years.
- ABN holders: the instant asset write-off lets eligible small businesses deduct the full cost of assets under $20,000 each, provided they’re first used (not just ordered) by 30 June 2026. That covers most compressors, laser levels, welders, scaffolding and trailer-loads of gear in one hit. We’ve written a full guide: Instant Asset Write-Off 2025–26: What Tradies Can Claim Before 30 June.
Either way: keep receipts, and only claim the work-related portion if the gear does private duty too.
Your ute, van or truck
Vehicle costs are usually a tradie’s biggest deduction — and the most commonly mucked up.
- Logbook method: keep a valid 12-week logbook and claim the business-use percentage of all running costs — fuel, rego, insurance, servicing, depreciation and interest on your vehicle finance.
- Cents-per-kilometre method: claim a set ATO rate per work kilometre, up to 5,000 km per year, no logbook required (but you must be able to show how you calculated the kilometres).
Driving between home and a regular workplace generally isn’t claimable — but carrying bulky tools with nowhere secure to store them on site, travelling between job sites, and trips to suppliers usually are.
If you’re financing a vehicle through your business (say a chattel mortgage on a new ute or truck), the interest component of your repayments is deductible, and the vehicle itself is depreciated — another reason the structure of your finance matters as much as the rate. Our ABN car loan guide explains the options.
Clothing, protection and the sun
- Hi-vis, steel caps, hard hats, gloves, safety glasses and other protective gear — deductible.
- Branded uniforms with a logo — deductible, including laundry (within ATO limits).
- Plain jeans and tees you happen to work in — not deductible, even if they end up wrecked.
- Sun protection — sunscreen, sunglasses and hats are claimable if you work outdoors. One of the most under-claimed deductions in the trades.
The rest of the toolkit
- Phone and internet — the work-related percentage of your plan.
- Licences, tickets and training — renewing a white card, high-risk work licence or doing a course that upgrades skills in your current trade is deductible. Getting a brand-new qualification for a different career isn’t.
- Union and association fees, certain insurances (income protection held outside super), and tax agent fees.
- Site-related costs — parking, tolls and travel between sites.
EOFY timing moves for ABN tradies
This is where the next three weeks earn their keep:
- Bring forward planned purchases. If you genuinely need the gear and it’s under $20,000, buying and taking delivery before 30 June brings the whole deduction into this year’s return.
- Prepay deductible expenses. Small businesses can generally claim a deduction now for up to 12 months of prepaid expenses — think insurance premiums or, in some cases, interest.
- Don’t buy junk for the deduction. A deduction returns cents in the dollar at your tax rate. Spending $10,000 on gear you don’t need to “save” $2,500–$3,000 in tax is a $7,000 hole, not a win.
- Watch your cash flow. June is peak season for equipment finance — if a purchase needs funding, get the approval moving now so delivery lands before the deadline.
Records: the boring bit that pays
The ATO’s standard is simple: no record, no claim. Photograph receipts the day you get them, keep a logbook app running, and keep records for five years. If your last-minute EOFY purchases are on finance, keep the loan schedule too — you’ll need the interest split.
FAQ
What can a tradie claim on tax without receipts?
Very little. You can claim up to $300 of work-related expenses in total without written evidence (you still must have spent it), plus limited laundry claims. Beyond that, you need records.
Can I claim my tools if they’re on finance?
Yes. Ownership through a loan doesn’t change deductibility — ABN holders can still apply the instant asset write-off to financed equipment, and the loan interest is deductible too.
Can I claim travel from home to a job site?
Usually not for a regular workplace. You generally can claim travel between job sites, to suppliers, and home-to-site trips where you carry bulky tools with no secure storage on site.
How much tax does a tradie get back?
A deduction reduces taxable income, so the cash benefit equals the deduction multiplied by your marginal tax rate. A $1,000 tool deduction returns roughly $300–$370 for most tradies.
When is the EOFY deadline for purchases?
Assets must be first used or installed ready for use by 30 June 2026 to count in this year’s return — ordered-but-not-delivered doesn’t qualify for the instant asset write-off.
Written and reviewed by the Finance Director at Tradie Finance.
This article is general information only and does not constitute credit or financial advice. It does not take into account your personal objectives, financial situation or needs. Consider whether the information is appropriate for you and seek professional advice before acting. Tradie Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees. Tax outcomes depend on your circumstances — consult a registered tax agent.