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Deductions guide · 2025-26 return

What can sole traders claim on tax in 2025-26?

A plain-English guide to tax deductions for freelancers & sole traders: what qualifies, what to watch out for, what you can claim without receipts, and how much sole traders typically claim.

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Quick answer · sole traders on about $80,000

$4,000typical work-related claim

Lower $1,500Typical $4,000Higher $9,000

There are no fixed ATO limits: you claim what you genuinely spent and can prove.

For your job

Deductions specific to sole traders

The deductions most closely tied to your line of work. You still need to have paid for each yourself, used it to earn your income, and kept a record.

Home office running costs

The running costs of working from home for your business.

  • Electricity, gas, internet and phone for the hours you work from home
  • The fixed-rate method covers these at 70c per hour worked from home
  • The decline in value of a dedicated desk, chair or equipment

Watch out: Claiming 100% of household bills

Tools, equipment and software

Gear and subscriptions you buy to run the business.

  • Laptops, cameras, tools and equipment used for the work (business-use share)
  • Software subscriptions, cloud storage and professional apps
  • Items costing $300 or less are generally deductible in full this year; more than $300 is written off over its effective life

Watch out: Claiming a big asset in full in year one when it must be depreciated

Business phone & internet

The work-use share of your phone and internet.

  • The business-use percentage of your mobile, home internet and any dedicated data
  • Only if you are NOT already claiming these hours under the 70c fixed-rate home-office method, which already includes phone and internet

Watch out: The private-use share

Vehicle & travel for the business

Trips you make to earn business income.

  • Business kilometres at 88c/km (cents-per-km method, up to 5,000km), or actual costs with a logbook
  • Parking, tolls and public transport for business trips

Watch out: Normal home-to-a-regular-workplace travel

Fees, insurance and accounting

Licences, insurances and the cost of managing your tax.

  • Professional licences, memberships and registrations for the business
  • Business and professional-indemnity insurance
  • Income protection insurance — where the policy is held outside super and covers loss of income (the benefit is then assessable)
  • Accounting and bookkeeping fees, and the cost of managing your tax affairs
  • Bank and merchant fees on a business account

Watch out: Fines and penalties

For every employee

What sole traders can also claim

  • Working from homeClaim 70c for every hour you work from home — no receipts, just an hours log.
  • Car and vehicle for work88c per km for work driving (up to 5,000 km) — or a logbook for bigger claims.
  • Self-education and coursesCourses that maintain or improve the skills for your current job.
  • Union and professional feesUnion dues and professional memberships are fully deductible.
  • Tools and equipment under $300Work items costing $300 or less are claimable in full this year.
  • Tools and equipment over $300Bigger items are claimed gradually as they decline in value (depreciation).
  • Phone and internetThe work-use share of your phone and internet bills.
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How much do sole traders typically claim?

A guide to what sole traders on different incomes commonly claim in total work-related deductions. Use it as a sanity check, not a target.

Up to $60,000
Lower $800Typical $2,500Higher $6,000
$60,000 to $100,000
Lower $1,500Typical $4,000Higher $9,000
Over $100,000
Lower $2,500Typical $6,000Higher $14,000
Show as a table
Annual incomeLowerTypicalHigher
Up to $60,000$800$2,500$6,000
$60,000 to $100,000$1,500$4,000$9,000
Over $100,000$2,500$6,000$14,000

The typical range is an estimate based on what people in your occupation commonly claim. The ATO does not publish fixed limits — your actual entitlement depends on what you genuinely spent. Claiming more than the typical range is fine if you have the receipts; claiming less than the low range may mean you're leaving money on the table.

New from 2026-27

The $1,000 standard deduction: claim it or itemise?

From 2026-27, employees get a $1,000 standard deduction for work expenses with no receipts — but it only applies to wages and similar labour income, not business income. If you also earn wages, it applies to those; your business expenses are claimed as usual either way.

Compare on your own income

Three rules for every claim

  1. 1You paid for it yourself and weren't reimbursed.
  2. 2It's directly related to earning your income — not personal, not 'just in case'.
  3. 3You have a record — a receipt, diary, log or bank statement.

Freelancers & Sole Traders tax deductions: FAQs

See what sole traders get back

Put these deductions against your own income in the free estimator and watch your 2025-26 refund update live. No account, no card.

Estimate my 2025-26 refundor check your take-home and the $1,000 for 2026-27

Official reference: the ATO's guide for sole traders.

Deductions for other jobs

See all occupations

This page is general information only and not personal tax advice. The claim ranges are illustrative, not ATO limits, and photos are illustrative. EOFYmate is not a registered tax agent. Always confirm with the ATO at ato.gov.au or a registered tax agent before lodging.