Tax Deductions for Australian Tradies: Tools, Utes & Laundry

February 01, 2026 | By Sarah Jenkins, CPA

Tradie holding construction plans with tools

For Australian tradies, tax time shouldn't be a headache. Whether you are a sole trader electrician, a subcontracting carpenter, or running a plumbing company, you incur significant costs just to do your job.

The good news is that the ATO allows generous deductions for tradespeople, provided you have the proof. Here is our guide to the essential deductions that can boost your tax refund in 2026.

1. Tools and Equipment

If you buy a tool to help you earn income, you can claim a deduction for it. However, how you claim it depends on the cost:

Under $300: If you are an employee (pay as you go), you can claim an immediate deduction for tools costing $300 or less.
Over $300: These must be depreciated over their effective life (claimed a little bit each year).
Business Owners: If you run your own business (ABN), you may be eligible for the Instant Asset Write-Off (thresholds apply for 2026), allowing you to claim the full cost immediately.

Don't forget the small stuff: It's easy to track the big drills, but don't forget to claim consumables like drill bits, nails, sealants, and saw blades. These add up!

2. Protective Clothing & Laundry

You can't claim normal jeans or a plain t-shirt, even if you only wear them to work. To be tax-deductible, clothing must be:

Protective: Steel-capped boots, high-vis vests, fire-resistant shirts, or non-slip safety shoes.
Uniform: Shirts with your business logo permanently embroidered on them.

The Laundry Allowance: If you have deductible clothing, you can also claim the cost of washing it. The ATO allows a claim of $1 per load (if washing only work clothes) or 50c per load (if mixed with personal clothes), up to $150 per year without written evidence.

3. Motor Vehicle Expenses (The Ute)

This is the big one. If you use your ute or van to carry tools and travel between sites, you can claim significant deductions. You generally have two choices:

Cents per km Method: You can claim a set rate per kilometre (check current ATO rates) for up to 5,000km per vehicle. No receipts required, but you need to show how you calculated the kms (e.g., diary records).
Logbook Method: This usually yields a much higher refund for tradies. By keeping a logbook for 12 continuous weeks, you establish a "business use percentage" (e.g., 90%). You can then claim 90% of fuel, rego, insurance, repairs, and loan interest.

Warning: Travel from home to work is usually private and not deductible. However, if you are required to carry bulky tools (like a ladder or mixer) and there is no secure storage at the site, you may be able to claim this trip.

4. Sun Protection

Working outdoors in the Australian sun is a health hazard. The ATO recognizes this. You can claim a deduction for:

Sunscreen (SPF 30+)
Sunhats and caps
Sunglasses (that offer UV protection)

5. Phone and Internet

Most tradies run their lives from their mobile. If you use your personal phone to call suppliers, talk to clients, or use job management apps, you can claim a percentage of your bill.

Example: If your bill is $100/month and you use it 50% for work, you can claim a $600 deduction for the year.

Got a shoebox full of receipts?

Don't stress about sorting them. We specialize in tax returns for tradies. Bring in your mess, and we'll turn it into a lodged return with every valid deduction claimed.

Book a Tradie Tax Review

Summary

The key to a great tax refund is record keeping. Snap photos of your receipts throughout the year so they don't fade. If you need help setting up an easy system, give us a call.