Tax Deductions for Freelancers & Sole Traders (2025-26)
A plain-English guide to the work-related deductions sole traders can claim on their 2025-26 Australian tax return — what qualifies, what to watch out for, what you can claim without receipts, and how much sole traders typically claim.
Most sole traders earning around $80,000 claim roughly $1,500 to $9,000 in work-related deductions, with a typical claim near $4,000. The biggest categories for sole traders are below. There are no fixed ATO limits — you claim what you genuinely spent and can prove.
Deductions specific to sole traders
These are 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
What every employee can also claim
On top of the role-specific items above, sole traders can claim these work-related costs that apply to almost everyone.
- 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.
How much do sole traders typically claim?
These ranges are a guide to what sole traders on different incomes commonly claim in total work-related deductions. Use them as a sanity check, not a target.
| Annual income | Lower | Typical | Higher |
|---|---|---|---|
| $0 – $60,000 | $800 | $2,500 | $6,000 |
| $60,001 – $100,000 | $1,500 | $4,000 | $9,000 |
| $100,001+ | $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.
The three golden rules for every claim
- 1You paid for it yourself and weren't reimbursed.
- 2It's directly related to earning your income — not personal, not 'just in case'.
- 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 EOFYmate's free estimator and watch your refund update live — no account, no card.
Official reference: the ATO's guide for sole traders.
Deductions for other occupations
- Tax deductions for adult industry workers
- Tax deductions for allied health professionals
- Tax deductions for apprentices & trainees
- Tax deductions for bus drivers
- Tax deductions for call centre operators
- Tax deductions for cleaners
This page is general information only and not personal tax advice. The claim ranges are illustrative, not ATO limits. EOFYmate is not a registered tax agent. Always confirm with the ATO at ato.gov.au or a registered tax agent before lodging.