Quick answer: In 2026-27 you can claim a deduction for any expense you paid for yourself, that directly relates to earning your income, and that you can prove with records. The big ones are car expenses at 91 cents per kilometre (up from 88c last year, max 5,000 km), working-from-home hours at the ATO’s fixed rate (70 cents an hour for 2025-26 — the 2026-27 rate was still pending ATO confirmation at the time of writing), self-education tied to your current job, donations of $2+ to registered charities, personal super contributions (with a notice of intent), last year’s tax agent fee, and — for small businesses — the $20,000 instant asset write-off, now permanent. A deduction doesn’t hand you dollars back one-for-one: it reduces your taxable income, so a $4,200 deduction saves a 30%-bracket earner about $1,267 in tax.
Ranking guides tell you which categories exist; this one works through the actual 2026-27 figures, shows the dollar-by-dollar maths of what deductions really save you, and answers the questions taxpayers ask on forums every July.
How deductions actually work (the three golden rules)
Forget the shopping-list approach for a minute. The ATO tests every claim against three rules:
- You spent the money yourself and weren’t reimbursed. If your employer paid you back — or pays the bill directly — it’s not your deduction. That includes salary-packaged or novated-lease items where the employer wears the cost.
- It’s directly related to earning your income. Not “helpful for work in a vague way” — there’s a clear connection between the expense and the income you earn. A hammer for a carpenter: yes. A hammer for an accountant who occasionally hangs pictures: no.
- You have a record to prove it. Receipt, invoice, bank statement, diary, logbook — the form depends on the category, and the details are below.
And the point everyone gets wrong: a deduction reduces your taxable income, not your tax dollar-for-dollar. Your saving equals the deduction × your marginal rate.
Work-related expenses: the core categories
Car expenses — 91 cents per kilometre in 2026-27
The ATO’s determination for 2026-27 (LI 2026/19) sets the cents-per-kilometre rate at 91 cents per kilometre — a base rate of 89 cents plus a temporary 2-cent uplift for this year only. Claim up to 5,000 work-related kilometres per car per year (a maximum of $4,550) with no fuel or running-cost receipts needed. You do need to show you own the car and how you worked out the kilometres — a diary or the ATO’s myDeductions app is fine.
The alternative is the logbook method: a valid 12-week logbook (usable for five years) plus every running-cost receipt, claiming the work-use percentage of fuel, insurance, rego, servicing and depreciation. No 5,000 km cap, so it usually wins if you drive more than that.
The line that burns most people: ordinary home-to-work commuting is not deductible, even if you drive every day. Deductible travel is between two workplaces, to a second job, to a work conference — or carrying bulky tools your employer requires you to transport.
Source: ATO — Cents per kilometre method
Working from home — 70 cents an hour (with a 2026-27 caveat)
The ATO’s fixed-rate method lets you claim a set rate for every hour you work from home. It covers electricity and gas, internet and data, phone use, and stationery/consumables in one figure. The rate was 70 cents an hour for both 2024-25 and 2025-26 — but be warned: at the time of writing, the ATO had not yet published the rate for the 2026-27 income year. Professional guidance has mentioned 75 cents, but nothing was confirmed. If you lodge for 2026-27 before the rate is announced, check the current ATO figure rather than assuming last year’s carries over.
Two rules trip people up:
- No double-dipping. The fixed rate already covers internet, phone and electricity — you can’t claim them separately. You can separately claim decline in value of depreciating assets (like a laptop) and eligible repairs.
- Record actual hours across the whole year. A diary, timesheet or calendar entries with start/finish times — estimates reconstructed at tax time don’t meet the standard.
The alternative is the actual cost method: apportion your real bills by work-use percentage. More paperwork, but it often beats the fixed rate if your electricity and internet costs are high. A quick illustration: 900 hours at 70c = $630 under the fixed rate.
Clothing, laundry and protective gear
The ATO draws a hard line here. Deductible: compulsory uniforms (employer-mandated, with a logo or strict policy), occupation-specific clothing (e.g. a chef’s checked trousers), and protective gear — hi-vis, steel-cap boots, hard hats, gloves, sunscreen and sunglasses for outdoor workers.
Not deductible: ordinary clothing — the business suit your firm expects, the black dress code in hospitality, the “smart casual” wardrobe. It doesn’t matter that you bought it for work; if it’s conventional clothing, it’s private.
Laundry of eligible work clothing is deductible. Reasonable laundry claims up to $150 a year don’t need written receipts (you still need to show how you calculated the figure, e.g. $1 per load × 3 loads a week × 40 weeks).
Self-education — tied to your current job, not a new one
Courses, seminars, conferences and reference materials are deductible if they maintain or improve the skills you use in your current income-earning activities. A nurse doing a wound-care course: yes. An accountant studying to become a pilot: no — that’s a new occupation. The ATO has tightened this area under Taxation Ruling TR 2024/3, so keep the enrolment, receipts and a sentence explaining how the course relates to the job you already hold. If your employer reimburses the fees, you can’t claim them.
Donations — $2 and up, registered charities only
Gifts of $2 or more to a deductible gift recipient (DGR) are deductible. The DGR test is everything: a registered charity qualifies; the school fundraiser tin, the GoFundMe for a mate’s medical bills and raffle tickets do not. Keep the receipt.
Personal super contributions — the notice-of-intent trap
You can claim a deduction for personal (after-tax) super contributions within the $30,000 concessional contributions cap — which also includes your employer’s super guarantee (12%) and any salary-sacrificed amounts. Contributions tax of 15% applies inside the fund, so it pays best when your marginal rate is above 15%.
The trap: putting money into super does not automatically make it deductible. You must give your fund a valid “notice of intent to claim a deduction” (the s290-170 notice) and receive its written acknowledgement before the earlier of (a) lodging your tax return for that year, or (b) the end of the following income year. Miss the deadline and the contribution stays non-deductible permanently. This catches people every June who contribute late and then lodge before sending the form. Our salary sacrifice guide has the full 2026-27 numbers.
Tax agent and tax management costs — claimed the year you pay
The fee you paid a tax agent to prepare last year’s return is deductible on this year’s return — one of the most commonly forgotten deductions. The same goes for tax advice costs and ATO interest charges on late payments (but not fines or penalties).
Tools and equipment — the $300 rule
Items costing $300 or less that you use mainly for work can be claimed in full immediately. Items over $300 are depreciated over their effective life — a $1,450 work laptop, for instance, is claimed over several years at your work-use percentage, not all at once.
The small-business one: instant asset write-off now permanent
For small businesses with aggregated turnover under $10 million, the $20,000 instant asset write-off is now permanent from 1 July 2026 (Treasury Laws Amendment (Tax Reform No. 2) Act 2026). Eligible assets costing less than $20,000 — computers, tools, equipment, furniture — are deducted immediately, per asset, in the year first used. Assets costing $20,000+ go into the simplified depreciation pool (15% first year, 30% after). See our small business concessions guide for the related CGT side.
Sources for the rates above: ATO — Cents per kilometre rate for car expenses 2026 determination (91c from 1 July 2026)
Step-by-step: claiming at tax time
- Gather everything before you start. Receipts, logbook, hours diary, super notice acknowledgement, donation receipts, last year’s tax agent invoice.
- Strip out the private and the reimbursed. Only the work-related remainder goes on the return.
- Pick your method where there’s a choice. Car: cents-per-km or logbook. Home office: fixed rate or actual cost. Calculate both and take the better one — you can switch methods year to year.
- Put each deduction in the right label. Car at D1, travel at D2, clothing at D3, self-education at D4, other work expenses at D5, donations at D9, tax agent fees at D10, personal super at D12. Dumping everything into “other” invites questions.
- Check substantiation. Total work expenses over $300 means written evidence for the whole claim; under $300 you still need genuine expenses and a calculation you can explain.
- Keep everything for five years from the date you lodge.
Worked example: $85,000 salary, ~$4,200 in deductions
A project officer earning $85,000, organised and with records kept all year. Here’s her deduction list:
| Expense | Calculation | Claim |
|---|---|---|
| Car — 2,200 work km | 2,200 × 91c | $2,002 |
| Working from home — 900 hours | 900 × 70c (2025-26 rate; confirm 2026-27 rate before lodging) | $630 |
| Professional membership | Full fee, job-related | $495 |
| Phone & internet work portion | 35% of annual bills | $428 |
| Laundry of compulsory uniform | $1/load × 4 loads × 40 weeks | $160 |
| Tax agent fee (paid last July) | Last year’s invoice | $385 |
| Donation to registered charity | Receipt on file | $100 |
| Total | $4,200 |
Her taxable income drops from $85,000 to $80,800. Now the 2026-27 tax maths (resident rates: nil to $18,200, 15% to $45,000, 30% to $135,000 — note the cut from 16% to 15% this year):
- Tax on $85,000: 15% × $26,800 = $4,020, plus 30% × $40,000 = $12,000 → $16,020
- Tax on $80,800: $4,020, plus 30% × $35,800 = $10,740 → $14,760 — income-tax saving $1,260, exactly 30% of the $4,200 deduction, because every dollar comes off the top of her 30% bracket.
There’s a second saving most guides skip: the 2% Medicare levy is charged on taxable income too. Levy on $85,000 = $1,700; on $80,800 = $1,616 — another $84 saved. Total saving: about $1,344, not $4,200. Run your own numbers through our income tax calculator alongside the 2026-27 tax rates guide.
Common mistakes the ATO adjusts most
- Claiming the commute. Home to your regular workplace is private travel — full stop. The ATO’s data-matching flags this routinely.
- Claiming 100% of the phone and internet. Unless you genuinely never use your phone privately, the ATO expects apportionment. A one-month usage log backing your percentage is the gold standard.
- Rounding to exactly 5,000 km. Claims that land precisely on the 5,000 km cap are one of the ATO’s known focus areas. Claim what you can show, not the maximum.
- Double-dipping the WFH fixed rate. Using the 70c rate AND separately claiming internet, phone and electricity. Those are inside the rate — the claim gets adjusted.
- The “$300 free claim” myth. The $300 substantiation exception doesn’t make expenses automatically deductible — you still need to have spent the money on something eligible and be able to explain the calculation.
- Missing the super notice of intent. Contributing in June and lodging in July without giving the fund the s290-170 notice first. The deduction is gone — it can’t be backdated.
- Claiming reimbursed expenses. If your employer paid it back or paid the supplier directly, it’s not your deduction. Payroll data-matching catches this one.
- Treating deductions as refund dollars. A $4,200 deduction is not a $4,200 refund — as the example above shows, it’s worth your marginal rate per dollar.
Record-keeping tips that survive an ATO review
- Use the ATO’s myDeductions tool in the ATO app — entries are timestamped and upload straight into your return, which is exactly what substantiation requires.
- Photograph receipts at purchase — thermal paper fades within months, and a faded receipt is no receipt.
- Write down your apportionment method for mixed expenses. “35% based on a one-month call log” is defensible; a bare number is not.
- File the super notice acknowledgement with your tax records — the deduction lives or dies on that piece of paper.
Frequently asked questions
Can I claim my drive to work?
Generally no. Home-to-work commuting is private travel regardless of distance or convenience. Exceptions are narrow: travel between two workplaces, to a second job, carrying bulky tools your employer requires, or home-to-work where your home is genuinely a base of operations (rare for employees).
My employer expects a suit, but it’s not a uniform. Can I claim it?
No. Conventional clothing — suits, business shirts, black hospitality wear, office dresses — is not deductible even if your employer effectively requires it. The ATO’s test is whether it’s a compulsory uniform, occupation-specific, or protective. A suit fails all three.
Do I need receipts for everything? What about small amounts under $300?
If your total work-related expenses are $300 or less, you don’t need written receipts for each item — but you still need to have genuinely spent the money on something deductible and be able to show how you calculated the claim. Over $300 and written evidence is required for everything. (Laundry has its own threshold: reasonable claims up to $150 don’t need receipts.)
Can I claim my gym membership or work shoes?
Gym memberships are private expenses in almost all cases, even if fitness helps your job — the exception is a tiny group of roles with mandated fitness standards (defence force, some police). And “work shoes” that are merely comfortable aren’t protective footwear; steel caps are.
I use the WFH fixed rate — can I also claim my laptop and internet separately?
The laptop: yes, separately — decline in value of depreciating assets sits outside the fixed rate, apportioned by work use. The internet: no — it’s inside the fixed rate, so a separate internet claim would be double-dipping. Phone use is also inside the rate.
Does a $4,200 deduction mean I get $4,200 back in my refund?
No — it’s worth your marginal tax rate per dollar. The $4,200 deduction saved $1,260 in income tax (30% bracket) plus $84 in Medicare levy. If she were in the 45% bracket it would be worth $1,890. Deductions reduce taxable income; your bracket decides the cash value.
Tax deductions reward organisation, not creativity. The biggest legitimate refunds go to people who kept records all year, knew which method suited them, and put every deduction in the right label. Confirm the 2026-27 WFH rate before you lodge, and remember the example above: every dollar of deduction is worth your marginal rate — so documenting $4,200 of real claims puts roughly $1,344 back in her pocket.
