Tax Deductions for Australian Freelancers: The Complete List

Every dollar you claim as a deduction reduces your taxable income. If you're in the 30% tax bracket, a $1,000 deduction saves you $300 in tax (plus $20 in Medicare Levy). Over a full year, missed deductions can easily cost you thousands.

The ATO doesn't care if you're a freelancer or a sole trader or a contractor. The rules are the same. You claim expenses that are directly related to earning your income, and you keep records to prove it.

This is a comprehensive list of what you can claim, what you can't, and how to do it properly.

The golden rule of deductions

A tax deduction is a legitimate business expense that reduces your taxable income. The ATO allows you to claim expenses that have a direct connection (a "nexus") to earning your assessable income.

Every deduction you claim must pass this test: was the expense directly related to earning your income as a freelancer?

That's it. No grey area, no clever tricks. If you bought it to earn money from freelancing, you can probably claim it. If you bought it for personal reasons, you can't. If it's a mix of both, you claim the work-related portion.

Three rules to remember:

1. The expense must relate to earning your income. Not to getting your first client or setting up before you start earning
2. You must have a record: a receipt, invoice, or bank statement for every claim
3. You can only claim your portion. If something is 60% work and 40% personal, you claim 60%

The ATO's audit algorithm flags returns where deductions look unusually high for your income level. Claim everything you're entitled to, but don't get creative. The penalties aren't worth it.

Home office deductions

If you work from home (and most freelancers do for at least some of the time), you can claim a deduction for your home office expenses. The ATO gives you two methods to choose from. We break these down in detail in our home office deductions deep dive.

Fixed rate method: 67 cents per hour

The simple option. You claim 67 cents for every hour you work from home. This rate covers energy costs (electricity and gas), internet, phone, stationery, and computer consumables.

You need to keep a record of the hours you work from home. A timesheet, calendar, or time-tracking app all work. You don't need to track individual bills.

Example: You work from home 1,600 hours during the financial year. Your deduction is 1,600 x $0.67 = $1,072.

On top of the 67c/hour rate, you can separately claim the decline in value (depreciation) of office furniture and technology equipment. The fixed rate doesn't cover those.

Actual cost method

The more detailed option. You work out the actual costs of running your home office (electricity, gas, internet, phone, cleaning, depreciation of furniture) and claim the work-related portion.

You'll need receipts and bills for everything, plus a reasonable basis for splitting work and personal use (floor area of your office as a percentage of total home area, or hours of work use versus total hours).

The actual cost method is more work, but it can give you a bigger deduction if you have a dedicated office and high running costs. Most freelancers find the fixed rate method simpler, and the deduction is usually close enough.

What you can't claim for home office

You cannot claim rent, mortgage interest, or property insurance under either method. These are occupancy expenses and are only available if you have a dedicated area set aside exclusively as a place of business, and even then, it can trigger capital gains tax when you sell. For most home-based freelancers, stick to running expenses.

Technology and equipment

Your computer, phone, software, and other tools of the trade are all deductible. How you claim them depends on the cost.

Instant asset write-off

If an item costs $20,000 or less (before GST if you're registered for GST), you can claim the full cost in the year you buy it under the instant asset write-off for small businesses (2024-25 financial year).

A $2,500 laptop, a $1,800 monitor, a $600 phone. All claimable in full in the year of purchase. No depreciation schedule.

Items over $20,000

Assets costing more than $20,000 are added to your small business simplified depreciation pool and depreciated over time (15% in the first year, 30% each year after).

Common technology deductions

• Computers and laptops. Full amount if under $20,000, or the work-use percentage if you also use it personally
• Monitors, keyboards, mice, webcams and other peripherals
• Mobile phone: both the handset and plan, at your work-use percentage
• Internet: the work-use percentage of your monthly plan. If you work from home full-time, 60-70% is a reasonable claim
• Software subscriptions like Adobe Creative Cloud, Microsoft 365, accounting software, project management tools
• Cloud storage and hosting, including Dropbox, Google Workspace, web hosting, and domain names
• Printers and consumables

The work-use split

If you use your phone 70% for work and 30% for personal, you claim 70%. The ATO expects you to have a reasonable basis for this split. Keep a four-week diary once a year to establish your usage pattern. That's enough to justify the percentage you claim.

Vehicle and travel

Travel deductions for freelancers cover getting to clients, attending meetings, and travelling for work purposes. They don't cover getting from home to your regular place of work (that's commuting, and it's not deductible, even if your "regular place" is a coworking space).

Car expenses

If you use your own car for work travel, you have two methods:

• Cents per kilometre: 85 cents per km (2024-25 rate) for up to 5,000 business kilometres per year. You don't need written evidence of each trip, but you need to be able to show how you calculated total business kilometres.
• Logbook method: keep a logbook for a continuous 12-week period to establish your work-use percentage, then apply that percentage to all car expenses (fuel, registration, insurance, servicing, depreciation). The logbook is valid for five years unless your circumstances change.

Example: You drive 3,000 km visiting clients over the year. Using the cents per km method: 3,000 x $0.85 = $2,550.

Other travel expenses

• Flights and accommodation for interstate or regional client work. Fully deductible if the trip is primarily for work
• Public transport to client meetings, fully deductible
• Tolls and parking for work-related travel, fully deductible
• Uber and taxi fares to client sites, fully deductible

Keep your receipts and note the business purpose of each trip.

Professional development

Expenses for education and training that maintain or improve the skills you use to earn your freelance income are deductible. The key requirement is that the course relates to your current work, not to a new field you want to move into.

Deductible professional development includes:

• Courses and workshops: online courses, in-person workshops, short courses related to your current skills
• Conferences and seminars, including registration fees, travel, and accommodation
• Books and publications: technical books, industry journals, ebooks, reference materials related to your work
• Professional memberships (industry associations, professional bodies like AIPM, Design Institute of Australia)
• Certifications: costs to sit exams or maintain professional certifications

What doesn't count: A course that qualifies you for a completely new profession (say you're a freelance writer studying to become a psychologist) is not deductible. It needs to relate to the work you're already doing.

Insurance

Insurance premiums for policies that protect your freelance business are deductible.

• Income protection insurance. Premiums are deductible if the policy covers loss of income. This is one of the more valuable deductions because income protection premiums can run $1,000-3,000+ per year depending on your income and occupation. Note: only policies held outside of super are deductible this way, though policies held within super are paid from pre-tax contributions.
• Professional indemnity (PI) insurance covers you if a client claims your advice or work caused them a financial loss. Fully deductible.
• Public liability (PL) insurance covers you if someone is injured or their property is damaged because of your business activities. Fully deductible.
• Cyber liability insurance. If you handle client data, this covers data breaches. Fully deductible.
• Business insurance covers your business equipment against theft, damage, or loss. Fully deductible.

You cannot claim private health insurance, life insurance, or total and permanent disability (TPD) insurance as a business deduction.

Commonly missed deductions

These are the deductions freelancers most often forget about. None of them are huge on their own, but skip enough of them and you're leaving a few thousand on the table.

Accounting and tax agent fees

The fee you pay your accountant or tax agent to prepare and lodge your tax return is deductible, in the year you pay it. If you paid $500 to get your 2024-25 return done, you claim that $500 in your 2025-26 return (the year the expense was incurred).

Bank and financial fees

• Business bank account fees: monthly fees, transaction fees, anything charged on your business account
• Merchant fees, including the percentage Stripe, Square, or PayPal charges on client payments
• Interest on business loans. If you borrowed money for business purposes, the interest is deductible

Subscriptions and tools

• Accounting software like Xero, MYOB, or QuickBooks
• Project management and communication tools. Asana, Notion, Slack, Zoom paid plans, anything you use to run projects and talk to clients
• Design and development tools: Figma, GitHub, AWS, any SaaS tool you use for work
• Stock images, fonts, and assets from Shutterstock, Adobe Stock, etc.

Marketing and advertising

• Google Ads, Facebook Ads, LinkedIn Ads for finding clients
• Website costs: hosting, domain names, themes, plugins
• Portfolio costs: Behance Pro, Dribbble Pro, or similar
• Business cards and printed materials
• Email marketing tools like Mailchimp, ConvertKit, etc.

Other commonly missed items

• Stationery and office supplies: notebooks, pens, printer paper, sticky notes
• Postage and courier costs for sending work to clients
• Work-related clothing, but only if it's occupation-specific (a uniform with your business logo, protective clothing). Ordinary clothes, even if you only wear them for work, are not deductible.
• Tax return preparation costs. Yes, the cost of doing your tax is tax-deductible
• ATO interest charges. If you've been charged interest on a late payment, that interest is deductible

Deductions reduce your tax bill, but you still need to have the cash set aside when it's due. If you don't already have a system for that, our freelancer tax savings account guide walks through how to set one up.

Things you can't claim

Some expenses look like they should be deductible but aren't. The ATO is clear on these.

Never deductible

• Fines and penalties: speeding tickets, parking fines, ATO penalties for late lodgement. Even if you were driving to a client meeting.
• Entertainment: taking a client to dinner, buying drinks at a networking event, hosting a Christmas party. Entertainment is specifically excluded. (Meals while travelling overnight for work are an exception; those are deductible.)
• Personal expenses: groceries, rent, personal clothing, gym memberships, childcare
• Traffic infringements and legal fines. No exceptions
• Donations, unless made to a registered deductible gift recipient (DGR), and even then it's a separate claim, not a business deduction

Commonly confused

• The commute. Travelling from home to your regular workplace is not deductible, even if your workplace is a coworking space or a client's office you attend every day. Travel between work locations during the day is deductible.
• Initial setup costs. Expenses incurred before you started earning income (before you had your first client or your ABN was active) are generally not deductible as business expenses. Some can be claimed as "blackhole expenditure" over five years, so talk to an accountant about this.
• Clothing. Your regular wardrobe is not deductible even if you wear it exclusively for meetings. It must be occupation-specific or protective.
• Self-education for a new career. If the course has no connection to your current work, it's not deductible.

Record keeping

The ATO requires you to keep records for five years from the date you lodge your return. Digital records are fine (in fact, the ATO prefers them). Good records also make lodging your BAS much faster.

Keeping good records also makes it easier to stay on top of your PAYG instalments throughout the year.

Good record-keeping habits:

• Photograph receipts immediately. Paper fades. Use your accounting software's receipt capture feature, or an app like Hubdoc or Dext.
• Categorise expenses as you go. Don't dump a shoebox of receipts on your desk in June. Tag expenses weekly.
• Keep a logbook for anything with a work/personal split (phone use, car use, home office hours)
• Bank statements are backup, not primary records. The ATO wants itemised receipts for claims over $10

If you're audited and can't produce records, you lose the deduction. It doesn't matter how legitimate the expense was.

Frequently asked questions

Do I need receipts for every deduction?

Under $10, a bank statement is enough. Over $10, you need a proper receipt or invoice. The ATO has flagged receipt-keeping as a focus area in recent years, so keep everything.

Can I claim expenses from before I started freelancing?

Generally, no. Expenses must be incurred while you're earning income, not before. There's a limited exception for "blackhole" capital expenditure (like legal costs to set up a business structure), which can be written off over five years under Division 40 of the tax act. If you have significant pre-business costs, talk to a tax agent.

How do I split personal and work use?

Use a reasonable and consistent method, and document it. For phones: a four-week diary of calls and data usage. For internet: estimate work vs personal browsing. For cars: the logbook method over 12 continuous weeks.

The ATO cares that you have a basis for your claim, not that it's calculated to the decimal. A well-documented 65% is better than an undocumented 80%.

What if I work from home and a coworking space?

You can claim both. Home office expenses for the days you work from home (using the 67c/hour rate or actual cost method), and the coworking space membership or day passes as a separate business expense. Don't double-count: you can't claim the fixed rate for hours spent at the coworking space.

Can I claim superannuation contributions as a deduction?

Yes, and it's one of the most powerful deductions available to freelancers. Personal super contributions are deductible up to $30,000/year (concessional cap). You must lodge a Notice of Intent to Claim with your super fund before you lodge your return.

Our super for freelancers guide has worked examples at different income levels showing the savings.

What happens if the ATO audits me?

They'll ask you to substantiate your claims. Receipts, logbooks, and a clear explanation of why each expense is work-related. If you can produce those, you're fine.

If you can't, the ATO disallows the deduction and may apply penalties: 25% of the shortfall for careless errors, up to 75% for deliberate ones. Keep your records for five years.