Tips and tricks to reduce your tax as an employee

The three golden rules

1. You must have spent the money yourself, and not been reimbursed by your employer.
2. It has to directly relate to earning your income — not just be useful or 'for work' in a general sense.
3. You need a record of it: a receipt, invoice, logbook or diary, depending on what you're claiming.

Miss any one of the three and the claim doesn't stand up. The ATO data-matches income statements, bank and lifestyle data against deductions each year, so claims well above what's typical for your job and income tend to get a closer look.

Car and travel expenses

• Driving between home and your regular workplace is private travel and isn't deductible, no matter the distance. Travel between two workplaces, to see clients, or to a one-off work event away from your usual base generally is.
• The cents-per-kilometre method is the simplest: 88 cents per kilometre for 2025–26, capped at 5,000 work kilometres per car per year (a maximum deduction of $4,400). You still need to be able to show how you worked out the kilometres, just not a full logbook.
• Done a lot more than 5,000 work kilometres, or drive an expensive car? The logbook method can claim more, based on your car's actual running costs and the work-use percentage from a 12-week logbook, but it's more record-keeping.
• Public transport, taxis and ride-share for work travel (not the commute) are deductible with a receipt or statement.

ATO: Cents per kilometre method ↗

Working from home

• The fixed rate method is 70 cents for every hour you actually worked from home in 2025–26, covering electricity, gas, internet, phone and stationery in one go. The ATO requires a record of your actual hours for the whole year — a timesheet, roster or diary kept as you go, not an estimate or a 4-week sample.
• Desks, chairs, monitors and other equipment you use for work aren't included in the 70 cents; they're claimed separately (in full if $300 or less, otherwise depreciated over their effective life).
• If your actual running costs are higher than the fixed rate would give you, the actual cost method can work out better, but it needs receipts and a reasonable basis for the work-use percentage of every expense.
• Only claim one method for the year, and only for the hours and costs connected to work — not family members also at home using the same internet.

ATO: Fixed rate method ↗

Clothing, laundry and self-education

• Clothing is only deductible if it's a genuine uniform your employer requires and that identifies you with them, protective gear (steel-capped boots, high-vis, sunscreen for outdoor work), or an occupation-specific item (not just a suit for an office job, however much it feels like 'work clothes').
• Laundering deductible work clothing is claimable too. Up to $150 of laundry claims don't need receipts, but you still need to show how you calculated the amount — and that $150 doesn't raise the separate $300 no-receipts limit below.
• Self-education counts if the course maintains or improves skills for your current job, or is likely to increase your income from it. A course aimed at moving into a different field or getting a new job isn't deductible, even if it's useful.

ATO: Clothing, laundry and dry-cleaning expenses ↗

Tools, memberships and other everyday claims

• Tools, equipment, technical books and software you buy for work: claim the full cost if $300 or less, otherwise it's depreciated over its effective life.
• Union fees and subscriptions to a professional association or trade publication connected to your job.
• Income protection insurance you pay for yourself, outside super, is generally deductible (a policy that replaces income if you can't work) — but a combined life/trauma/income protection policy only lets you claim the income protection portion, and your insurer or adviser can usually tell you the split.
• The cost of managing your tax affairs: a previous year's tax agent fee, and travel to see us, is deductible in the year you pay it.

Super contributions can reduce your tax too

Topping up your super — through salary sacrifice with your employer, or a personal contribution you claim as a deduction — reduces your taxable income, generally taxed at just 15% in your fund instead of your marginal rate. It's a genuine way to cut your tax bill, but it also locks the money away until you reach preservation age, and caps and other rules apply.

See our article on claiming a deduction for your own super contributions for how the deduction (and the government co-contribution alternative) actually works.

Donations

Gifts of $2 or more to an organisation with deductible gift recipient (DGR) status are deductible — check the organisation is endorsed as a DGR, not just a registered charity, and keep the receipt. Buying a raffle ticket or something at a charity auction isn't a donation, even for a good cause, because you received something for your money.

Keeping records

• If your total work-related claims (excluding car, travel allowance and overtime meal expenses) come to $300 or less, you don't need receipts, but you must still be able to show how you worked the amount out.
• Above $300, you need written evidence for everything except that $150 laundry allowance above.
• Keep records for five years from when you lodge, in case the ATO asks to see them.

A word of caution: a bigger deduction isn't automatically a win

Legitimate deductions reduce your taxable income, and that's the whole point — but taxable income (and sometimes add-backs like reportable fringe benefits and reportable super contributions) is also the figure used to test a lot of things outside your tax return: Centrelink payments and Family Tax Benefit, child support assessments, compulsory HELP/HECS repayments, the Medicare levy surcharge and the private health insurance rebate.

That doesn't mean don't claim what you're entitled to — it means the full picture matters if you're close to one of those thresholds. For how a deduction might affect a Centrelink payment or child support, check with Services Australia or a financial counsellor; we're happy to talk through the tax side, and our article on the Medicare levy surcharge covers that one in detail.

Quick checklist

• You paid for it yourself, it's connected to earning your income, and you've got a record of it.
• Work travel, not the trip between home and your regular workplace.
• An actual hours record for working from home, kept as you go.
• A genuine uniform, protective gear, or an occupation-specific item — not just 'work clothes'.
• Self-education that improves your current job, not a different one.
• Receipts kept for five years — and a quick check of what a bigger refund might mean for any Centrelink, HELP or Medicare levy thresholds you're near.

Not sure whether something you spent money on this year is deductible? Bring it up at your appointment — it's easier to work out together than to guess and have the ATO ask questions later.