What counts as a deductible expense?
Not every cost you pay during the year can be claimed on your tax return — but a surprising amount can. Here's a high-level guide to the main categories, with links to deeper Night Tax guides for each.
The two big buckets
Australian tax deductions fall broadly into two groups: costs that helped you earn your income, and specific other items the ATO allows even when they're not directly tied to earning.
1. Work-related expenses
These are costs you paid yourself, that directly relate to earning your salary, wages or business income, and that you can back up with a record. Think tools, uniforms, protective gear, self-education, professional memberships, work-related phone and internet, home office running costs, and work travel that isn't your normal commute.
- Tools, equipment and software used for work
- Compulsory uniforms and protective clothing
- Union fees, professional memberships and subscriptions
- Work-related phone, internet and home office costs
- Self-education directly related to your current job
- Work travel and vehicle use (excluding the daily commute)
2. Other allowable deductions
Some deductions aren't tied to a job at all. If you donate to a registered charity, contribute personally to super, hold income protection insurance or pay to have your tax done, those may all be claimable.
- Gifts and donations to deductible gift recipients
- Expenses incurred to earn investment income (interest, dividends, rent)
- Personal superannuation contributions (where eligible)
- Income protection insurance premiums (outside super)
- Fees paid to a registered tax agent and other tax management costs
What generally isn't deductible
Costs that are private, domestic or capital in nature usually can't be claimed. That includes normal home-to-work travel, everyday clothing (even if you only wear it to work), your lunches, fines and most personal grooming.
If an expense has both a work and a private component — like a phone plan you also use personally — you can only claim the work-related portion, and you need a reasonable method for working that percentage out.
How Night Tax figures it out for you
Rather than making you memorise categories, Night Tax AI walks you through targeted questions based on your job and income. When you mention a cost, the AI applies the ATO's three tests, prompts you for evidence, and flags anything that needs apportioning. A registered tax agent then reviews everything before lodgement.
Let AI find deductions you didn't even know existed
Start your Night Tax return tonight — quick, accurate and reviewed by a registered tax agent before lodgement.
Night Tax always applies ATO rules on substantiation and compliance. AI suggestions are reviewed by a registered tax agent before lodgement.