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There’s been a lot of talk in recent months about potential tax changes, concessions and deductions coming our way in the near future. We’re here to help you find out the latest tax rules for tradies so you and your business can benefit. Read on for a rundown of some of the key changes, updates and new tax rules from the Australian Taxation Office (ATO), to help you squeeze the most from your tax return. Keeping up with the latest tax rules, regulations and rates can pay dividends when it comes to claiming a tax deduction against your income. Your wallet will thank you.
For tradies who use their car for jobs (and who doesn’t?), it’s good to know that the ATO has given a three cent increase to the deduction you can claim for car expenses. If you’re claiming a tax deduction for using your own car for work with the cents per kilometre method, the rate has risen from 85 cents to 88 cents per kilometre up to a maximum of 5000 business kilometres per car for 2024-25. This method covers all your car’s running expenses, including depreciation. Keep in mind, if your vehicle is designed to carry more than one tonne (such as a van, truck and some utes), you can’t use this method, you must use the actual cost method.
If you buy a vehicle for your business this financial year and you use either the logbook method or actual cost method, you’ll be able to deduct the vehicle’s decline in value (depreciation) over its effective life. Before you rush out to buy a new ute, keep in mind that the ATO’s car limit threshold is $69,674. This limit is the maximum value you can use when calculating your car’s depreciation deduction. The ATO has a handy depreciation and capital allowances tool on their website to help with this calculation.
This year, you can again access the instant asset write-off rule for your asset deductions. With this rule you can immediately claim the cost of items for your work as a tax deduction. This applies to the work portion of things you use both for work and personal use. The limit is $20,000 per asset. Before you start spending, check if your business qualifies. This rule only applies to small businesses with an annual turnover under $10 million. You must have bought and used the item, or installed it for use, before 30 June 2025.
Not all assets qualify for the instant asset write-off, so check other criteria that may apply. You may need to apply general depreciation rules or simplified depreciation rules instead of the instant asset write-off. If you’re unsure about how to claim an asset, ask your accountant or a qualified tax professional.
If you need to train new employees, upskill your current team or boost your business’ technology, you may be able to claim a deduction for the costs you incur.
Generally, you can claim deductions for training expenses incurred for your employees where the training is related to your business. For tradies, this can include costs for courses, seminars, and workshops that provide certifications or improve the skills of your employees.
You can also claim deductions for the depreciation of technology assets like computers, software, and other digital equipment using the instant asset write-off rule.
As an employer, you need to pay super contributions for your employees. You also need to pay super for any contractors you hire wholly or principally for their labour, even if they have an ABN. For the 2024-25 financial year, the super guarantee rate is 11.5 per cent. This will increase to 12 per cent on July 1, 2025. Making super contributions for employees, contractors and yourself can be complex. So, it’s smart to talk to a tax and/or super professional to ensure you’re paying the right amounts to the right super funds on time.
Might sound obvious, but make sure you keep receipts for everything work related.
“If you plan to claim deductions for work-related expenses at tax time, you must keep good records throughout the year to substantiate those claims,” ATO’s Assistant Commissioner Rob Thomson warns. You need receipts or invoices (which can be digital) demonstrating the amount, date of purchase, nature of the goods or services, supplier, and the date the receipt or invoice was produced.
“One of the big mistakes I see people make is not hanging onto their receipts because they think they can just use their bank or credit card statement,” Rob says, adding: “In most cases, a bank statement (on its own) is not sufficient evidence to support a work-related expense claim.”
Embrace using accounting software, such as Xero, and a receipt capture app, like Dext or Hubdoc, suggests Michele Grisdale, founder of Rainforest Bookkeeping and member of the Xero Partner Advisory Council.
“These tools allow you and your team to capture receipts on the go and email documents directly to the app, ensuring transactions are reconciled quickly and giving you an accurate picture of your business performance,” she says. “Plus, it saves you time and stress by eliminating the need to backtrack and search for these documents. An added bonus of going digital? It also keeps paper clutter out of your vehicle and removes the need for long-term physical storage of purchase information.”
And remember, you can store and organise your eReceipts from Bunnings purchases in one convenient place within the PowerPass app – such a time-saver when the end of the financial year rolls around.
Tip: Not a PowerPass member yet? Check stock and pricing, get quick access to your e-receipts and self-checkout in-store by downloading the PowerPass app for free.
Automating your business recording requirements could help take the sting out of essential paperwork.
“For sole operators and small businesses, the best approach is to maintain digital records using an app or cloud software that automates as much of the process as possible,” says Kim Owen-Jones, General Manager SME Direct for MYOB. “For example, link your bank transactions, capture receipts using your phone, and categorise expenses in real time.”
If you have multiple jobs, adds Kim, organisation becomes even more crucial. “You need to clearly separate income streams and associated expenses,” she says. “Business management tools allow you to create jobs, categories or tags, making it easy to track deductions and earnings per role.”
The Australian Tax Office’s (ATO) free app helps individuals and sole traders to get ready for tax time all year round. It has useful tools, like recordkeeping features for deductions. To take advantage of all the app features and personalise your experience, create a myGov account and link it to the ATO.
This helpful tool in the ATO app lets you capture records and receipts as you go, keeping them all in one place. When you’re ready to complete your return, you can upload it directly or email it to your tax agent. You can also use the myDeductions tool in the ATO app to log work-related trips to stay on top of your vehicle expenses if you use the logbook method.
Expenses over $300 (for individuals) are dealt with under depreciation rules. You can claim these in various ways. This handy calculator helps you work out the depreciation costs for the relevant asset(s). Linking the tool to your myGov account lets you upload your calculations straight to your tax return. You can also save them for future years. If you prefer, simply download them and send them to your tax agent.
Many individual tradies or sole traders earn personal services income (PSI) from their own work. The ATO sees income as PSI if over 50 per cent of the income you've received from a contract is a reward for your personal efforts or skills, rather than being generated by assets, the sale of goods, or from a business structure.
Tradies earning PSI are restricted in some of the expenses they can claim. However, those restrictions don’t apply if you’re a personal services business (PSB).
There’s a number of rules and tests you need to meet to be a PSB, so to help you determine if you’re a PSB the ATO have this useful self-assessment page.
Most tradies spend a lot of time in their vehicles. These handy tools will show if you can apply for fuel tax credits, and can also tell you how much you can claim based on your business use.
You can access the myTax tool through your myGov account if it’s linked to the ATO. This tool is for individuals and sole traders. It also connects to other ATO calculators, like the Depreciation and Capital Allowances tool.
Much of the needed information, like salary, government payments, health fund data, dividends and bank interest, can be pre-filled automatically by the ATO. You’ll need to check it closely and adjust or add anything that is incorrect or missing. It allows you to lodge your return online and will work out any tax you need to repay, or how much you can expect in a refund.
The ATO website has plenty of other tools and calculators that can help tradies understand their tax and superannuation obligations. From assisting with your record-keeping requirements and tax return preparation, to confirming your residency status for tax purposes.
The ATO has listed the main ones that assist most people, whether you’re an individual, sole trader or small business owner. There are others that might also help, depending on your situation. To explore the full list check out the ATO website.
Check out our comprehensive Q&A with an ATO expert.
