If you’re not sure what you can claim at tax time, you’re either missing out or risking an ATO audit. Nailing your expense categories will keep more in your pocket.
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Small business owners often miss deductions or overclaim by accident. Whether you're a sole trader, company, or trust, you need to know what’s deductible and how to categorise it if you want to keep more profit.
Here are the main expense categories, what records to keep, and where the ATO draws the line.
The ATO allows you to claim most expenses that are:
If an expense is partly for personal use (like your phone or car), you can only claim the business portion.
Get these categories right to claim more while keeping your books clean.
These day-to-day running costs are usually claimed in the year you pay them. Think:
Keep digital copies of every invoice and receipt. Not sure where to start? We can help you set up a simple system.
If you use your car for business purposes, you can claim:
How you claim depends on your structure:
You can claim wages and super for employees, but not for yourself if you’re a sole trader or in a partnership.
Miss a PAYG or super payment and you lose the deduction.
If you travel for business, you can claim:
You can’t claim personal travel, holidays added to business trips, or costs for family members.
If you work from home, you may be able to claim:
You’ll need to split these costs. For occupancy, use floor space and business hours as your guide. The ATO’s shortcut method is easy, but it often means a smaller deduction.
You can’t claim the full cost of assets like computers, tools, or vehicles upfront. Use simplified depreciation rules to claim them over time.
Confusing expense categories or claiming private costs will attract ATO attention. Clean financial records and the right support go a long way in protecting your business.
We’ve covered the key expense categories every Australian small business owner should understand, from everyday operating costs to capital assets and home office claims.
Get this right, and you’ll reduce your tax, maximise your deductions, and avoid compliance headaches.
If your records are a mess or your categories aren’t clear, don’t leave it to guesswork; talk to someone who knows small business inside out.
Simplify Bookkeeping & BAS supports sole traders, companies, and family-run businesses with expert record-keeping, BAS preparation, and practical bookkeeping support.
Book a call today and keep more of your profit in your pocket.
