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What can tradies claim on tax?

Written by Fitzpatrick Group • Accountant
Published on 15 Feb 2019

Many tradie business owners find themselves working overtime, which often leaves tax as the last thing on their mind. Unfortunately, this means many business owners in construction, building, electrical, and more end up paying too much tax and miss out on hundreds of dollars’ worth of claimable expenses every year.

Here are some common tips on tax deductions for business owners in the industry.


Tax deduction tips for tradie business owners

Some of the items on the list below are very well known when it comes to claiming back on tax. However, many tradies are missing opportunities to legitimately claim back on tax. Here are some things to consider when speaking with your accountant about your next tax return.

  • Clothing protective items like hi-vis, steel-capped boots and safety glasses.
  • Tools and equipment if you’re a small business you can immediately write-off assets costing less than $20,000 each. This deduction applies to most assets, regardless of whether the asset you bought is new or second-hand. You claim the deduction in the year the asset was first used or installed ready for use. Assets costing $20,000 or more are deducted over time using a small business pool. This Threshold has been recently extended to 30 June 2019.
  • Laundry/cleaning of work-related clothes that have employer logos or text
  • Sunscreen and sunglasses if you work outside
  • Work-related tablet, computer and mobile phone expenses
  • Home office expenses
  • Training courses, licenses and certifications (if directly related to your current role)
  • Deductible Car expenses including parking, tolls, running expenses, fuel, km driven etc. You need to maintain a log book continuously for 12 week if your work-related kilometres is over 5,000. Otherwise it is limited to claim up to 5,000 kilometres in that case you need to maintain a travel diary.
  • Travel and accommodation expenses when working away from home
  • Union fees are tax deductible


Record Keeping for Tradie business owners

In order to claim a tax deduction you must be able to show:

  • That you spent the money
  • What you spend on it
  • Who the supplier was
  • When the purchase occurred

Bank or credit card statements usually don’t contain this information.

If your work-related deductions are more than $300, you must have records to support your claims. Records are usually a receipt from the supplier of the goods or services.

The receipt must show:

  • Name of supplier
  • Amount of expense
  • Nature of goods or services
  • Date the expense was paid
  • Date of the document

These records should be kept for a minimum of five years after you lodge your tax return.


In Summary

There are plenty of tax management options available to tradie business owners. However, if you are looking to better manage your cash flow to be more confident in the choices you make as a business owner, you should take a deeper look into your budgeting.

Check out another recent blog in this category.

We help tradies build better tax strategies.