Guide · 10 min read · Australia · 2026 tax year

    Freelancer and sole trader tax deductions (Australia)

    Every deduction Australian freelancers and sole traders can claim — with ATO rules for home office expenses, car costs, equipment, software, GST, and records.

    The ATO rule, plain

    A deduction must be directly connected to earning your assessable income. If an expense is partly private and partly business, claim only the business-use portion and keep records that show how you calculated it.

    Home office

    Fixed-rate method for working from home hours
    Actual-cost method for business-use percentage
    Internet, phone, electricity, and stationery
    Office furniture and equipment depreciation

    Technology

    Laptop, monitor, tablet, and phone (business %)
    Software subscriptions and cloud storage
    Web hosting, domains, and online tools
    Repairs and accessories used for work

    Motor vehicle

    Cents-per-kilometre method for eligible business trips
    Logbook method for higher business-use vehicles
    Fuel, registration, insurance, repairs (business %)
    Parking and tolls for client or work travel

    Professional services

    Accountant and bookkeeper fees
    Business legal advice
    Professional indemnity or public liability insurance
    Memberships, registrations, and licences

    Marketing

    Website design and maintenance
    Online advertising and sponsorships
    Business cards, signage, and print material
    Portfolio, marketplace, and lead-gen fees

    Travel & training

    Flights, accommodation, and transport for business travel
    Meals while travelling overnight for business
    Courses directly related to current freelance work
    Conferences, workshops, and reference materials

    Banking & payments

    Business bank account fees
    Payment processor fees
    Interest on business loans
    Bad debts written off

    ATO-ready expense tracking

    SnapBooks keeps receipts, categorizes expenses, tracks business-use notes, and exports clean reports for your accountant or tax agent.

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    Key Australian thresholds and rules

    • Tax-free threshold: A$18,200 for Australian residents
    • GST registration: A$75,000 GST turnover in a 12-month period
    • ABN: usually needed when freelancing as a business
    • Home office: fixed-rate or actual-cost method, depending on records
    • Car expenses: cents-per-kilometre or logbook method
    • Private-use split: phone, internet, car, and home costs must be apportioned

    What you can't deduct

    • Private living costs such as groceries, rent, and everyday clothing
    • Commuting between home and a regular workplace
    • Fines and penalties
    • Your own drawings or personal spending
    • Expenses reimbursed by a client
    • Private-use portions of phone, internet, car, or home costs

    Related

    Frequently asked questions

    What can freelancers claim on tax in Australia?+

    Australian freelancers can generally claim expenses directly connected to earning assessable business income, including home office costs, software, equipment, business travel, professional fees, marketing, insurance, and payment processing fees. Mixed-use expenses must be split between business and private use.

    Can I claim working from home expenses as a freelancer?+

    Yes. Sole traders and freelancers can use the ATO fixed-rate method for eligible working-from-home hours or the actual-cost method if they keep detailed records. The right method depends on your hours, bills, and record keeping.

    Can I claim my laptop, phone, or internet?+

    Yes, but only the business-use portion. Lower-cost items may be immediately deductible, while higher-cost assets are usually depreciated over their effective life unless a small business concession applies.

    How do car deductions work for Australian freelancers?+

    If you use your car for business travel, you can usually choose between the cents-per-kilometre method and the logbook method. Keep trip records showing date, purpose, and kilometres. Normal commuting is not deductible.

    Do freelancers need an ABN in Australia?+

    Most freelancers operating as a business should apply for an Australian Business Number. Clients may withhold tax at the top rate if you invoice without an ABN, and an ABN is typically needed for business registration and GST.

    When do freelancers need to register for GST?+

    You generally need to register for GST once your GST turnover reaches A$75,000 in a 12-month period. Below that, registration is optional, but once registered you must charge GST and lodge BAS.

    General guidance, not personalised tax advice. Rules and thresholds change — verify against the ATO and speak to a registered tax agent for your situation.