The three golden rules.
Before any work expense can appear on your tax return, it has to pass three quick tests. Get these right and your claim is solid. Get them wrong and it can be denied — and possibly attract a penalty.
Rule 1 — You paid for it yourself
The cost must have come out of your own pocket and you can't have been reimbursed. If your employer paid for it, provided it, or paid you back later, it's their expense, not yours.
Mia buys a set of specialist scissors for $180 and her salon reimburses her the full amount at the next pay run. She can't claim the $180 — she wasn't out of pocket.
Rule 2 — It directly relates to earning your income
There has to be a genuine, close connection between the expense and how you actually earn money. Buying something because it might one day help your career, or because your boss casually suggested it, isn't enough on its own.
Sam is a registered nurse who pays $95 for AHPRA renewal each year. Without the registration she can't legally work — the connection to her income is clear and direct.
Jordan works in accounts payable and buys a general leadership book he thinks might help "one day". There's no direct link to his current duties, so it isn't claimable.
Rule 3 — You have a record to prove it
You need evidence that you incurred the expense — usually a receipt, invoice or bank statement showing the purchase, the supplier and the date. For some expenses (like a car logbook or a diary of home office hours) you also need to show the extent of work use.
If you can't substantiate an expense if asked, the ATO can disallow it — even if it was genuinely for work. Night Tax stores your uploaded evidence securely against each return.
The mixed-use rule
Lots of expenses have both a work and a private side — a phone plan, a laptop used for study and streaming, internet at home, a car used for both commuting and work travel. You can only claim the work-related portion, and you need a fair method for working that percentage out.
- Phone and internet: keep a 4-week representative diary of work use
- Laptops and devices: estimate the work percentage based on time or files
- Cars: use a logbook or the cents-per-kilometre method within ATO limits
- Home office: track hours worked from home or use the fixed rate method
How Night Tax applies the rules
When you mention a work expense, Night Tax AI quietly runs it through all three tests. If the cost looks partly private, it asks you the questions needed to apportion it correctly, and reminds you what evidence to upload. A registered tax agent then reviews the final claim before it's lodged.
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Night Tax always applies ATO rules on substantiation and compliance. AI suggestions are reviewed by a registered tax agent before lodgement.