Tradie Tax Deductions 2026: What You Can Claim in Australia

Tradies spend more of their own money on work gear than almost any other occupation — tools, utes, boots, licences, phones. The good news: most of it is deductible if you get the rules right. The ATO publishes a dedicated tradie guide and watches this group closely, so this is what you can actually claim in 2026, and where tradies most often get it wrong.

Key Takeaways

• Tools costing $300 or less are claimed in full this year; over $300 they're depreciated over their effective life (ATO, 2026).
• Only genuine protective clothing (steel-caps, hi-vis, safety glasses) is deductible — ordinary clothes never are, even on site.
• You generally can't claim home-to-work travel, but travel between jobs and carrying bulky tools can qualify.

What Can Tradies Claim on Tax in 2026?

In 2026, tradies can claim work costs they paid for themselves and weren't reimbursed for, as long as each cost directly relates to earning income (ATO, 2026). For most tradespeople that means tools and equipment, protective clothing, vehicle and travel costs, licences and tickets, phone, and insurance.

Whether you're an employee or running your own business changes how you claim — sole traders also deal with GST and BAS — but the underlying "is it work-related?" test is the same. If you're a sole trader, see our sole trader tax return guide.

How Do Tradies Claim Tools and Equipment?

It comes down to cost. A tool costing $300 or less can be deducted in full in the year you buy it; anything over $300 is claimed gradually as it depreciates (ATO, 2026). This applies to drills, saws, nail guns, ladders, toolboxes and the like.

If you run a small business, the instant asset write-off can let you immediately deduct higher-value eligible assets — but the threshold has changed year to year, so confirm the current cap before you rely on it. See our explainer on the instant asset write-off. Repairs, insurance and replacement of work tools are also deductible.

What Clothing and Travel Can Tradies Claim?

Only protective clothing is deductible — items with features that shield you from real workplace risks, such as steel-capped boots, hi-vis gear, cut-resistant gloves, safety glasses, and sun protection for outdoor work (ATO, 2026). Ordinary clothes — jeans, plain shirts — are never deductible, even if your boss insists on them.

Travel is the other grey area. Your normal commute from home to a regular workplace isn't claimable. But driving between job sites during the day, or transporting bulky tools you can't securely leave on site, generally is. Keep a logbook — see motor vehicle expenses.

What Else Can Tradies Claim?

Plenty of smaller costs are deductible and easy to forget across a busy year:

• Licences, tickets and white cards needed for your current work (renewals)
• Phone and internet — the work-related percentage
• Union fees and industry memberships
• Sunscreen, sunglasses and hats for outdoor tradies
• Work-related training that maintains or improves your current skills
• Tax agent fees and income protection insurance

Keep every receipt and a logbook for vehicle claims. If your tax is more than a shoebox of dockets, a tradie-savvy accountant pays for themselves — and the fee is deductible. We also work with tradies directly through our tradie accountants service.

Want to claim every tool, ticket and kilometre? Australia Wide Tax Solutions handles returns and BAS for tradies across Australia and is registered with the Tax Practitioners Board. Book an appointment or lodge online.