A Tradie's Guide to Claiming Tax Deductions on Essential Equipment
31 October 2026 · 6 min read · By Heaney Accounting
What counts as a tax-deductible tool?
As a tradie, you rely on your tools to get the job done. The Australian Taxation Office allows you to claim a deduction for the cost of tools used for your business, provided they are directly related to earning your income.
- Power drills, saws, and heavy machinery
- Specialised hand tools
- Safety gear like high-vis vests and steel-capped boots
- Toolboxes and storage systems
Deducting vs. Depreciating
- Items costing $300 or less: You can claim an immediate deduction in the year of purchase.
- Items costing over $300: You generally need to depreciate the cost over the effective life of the tool.
- Temporary Full Expensing: Check if you are eligible for immediate write-offs for business assets based on current legislation.
Important Note: Always keep your original receipts or digital invoices for at least five years. If you lose the proof of purchase, the ATO may disallow the deduction during an audit.
Remember that if you use a tool for both business and private projects, you can only claim the portion of the cost that relates to your business income. Keep a record of usage to justify your claim.
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