Key Takeaways
- Tools costing $300 or less are an immediate deduction.
- Apportionment is mandatory for personal vs work travel.
- Items over $300 must be depreciated over several years.
- The tool must be used purely for income-earning activities.
The Short Answer
A Big Yes! The ATO recognizes that small tools and equipment are essential for many Australian workers. Whether you're a tradie, a teacher, or a delivery driver, you can claim the full cost of any tools or equipment you buy that cost $300 or less as an immediate tax deduction.
Immediate Deduction: The $300 Rule
This is a major point of confusion. The ATO allows you to claim an immediate deduction for the full cost of any tool or piece of equipment if it costs $300 or less. However, the rule is based on the total cost of each item, not the total of all items you buy.
Who CAN Claim?
A deduction is only available if there is a direct connection between your job and the tool. This includes any profession where you're required to provide your own tools, such as:
- Tradespeople and construction workers (e.g., hammers, drills, or levels)
- Landscapers and gardeners (e.g., garden tools or power tools)
- Chefs and kitchen staff (e.g., knives, kitchen tools, or safety equipment)
- Anyone who needs specialized tools for their daily duties
Work vs Private: The "Holiday" Component
This is a major part of claiming tools. If you buy a tool that you use for both work and personal projects at home, you must apportion your claim. For instance, if you use a new drill 70% for work sites and 30% for home DIY, you claim 70% of the cost.
Supporting Evidence 2026
Keep your tax invoice for all tool purchases. If the item costs $300 or less, you can claim the business-use percentage of the cost in your current return. If the total cost of all tools is over $300, you will still claim the individual totals for those that were $300 and under.
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