Tax Return Australia: What Can I Claim in 2026?
What can you claim on your 2025-26 Australian tax return? This guide covers every major deduction category with current ATO rates and worked examples.
Tax Return Australia: What Can I Claim in 2026?
Every year, millions of Australians leave money on the table at tax time — not because they cheated, but because they did not know what they were allowed to claim. The ATO processes over 14 million individual tax returns annually, and the most common problem is not fraud: it is people either overclaiming without the right records, or underclaiming because they did not know a deduction existed.
Your 2025-26 tax return covers income and expenses from 1 July 2025 to 30 June 2026. The lodgement deadline for self-lodgers is 31 October 2026. Before that deadline, this guide walks through every major deduction category you can claim, what the current ATO rates are, which records you need to keep, and — just as importantly — what you cannot claim, so you do not trigger an audit.
The three rules the ATO applies to every deduction are the same regardless of the category. You must have spent the money yourself and not been reimbursed. The expense must be directly related to earning your income. And you must have records to prove it — receipts, invoices, logbooks, or diary entries kept at the time, not reconstructed later.
Your 2025-26 Income Tax Rates at a Glance
Before claiming anything, it helps to understand the tax rates your deductions are working against. These are the 2025-26 resident marginal tax rates, which determine the value of every dollar of deductions you claim:
| Taxable Income | Tax Rate |
|---|---|
| $0 to $18,200 | Nil (tax-free threshold) |
| $18,201 to $45,000 | 16% |
| $45,001 to $135,000 | 30% |
| $135,001 to $190,000 | 37% |
| $190,001 and above | 45% |
Add the 2% Medicare Levy on top for most taxpayers. If your income (including reportable fringe benefits) exceeds $93,000 for a single and you do not hold adequate private hospital cover, the Medicare Levy Surcharge of 1% to 1.5% also applies.
The Low Income Tax Offset (LITO) reduces your tax payable by up to $700 if your taxable income is $37,500 or below, phasing out entirely at $66,667. It applies automatically — you do not need to claim it separately.
The practical implication: if you earn $90,000, every $1,000 of legitimate deductions reduces your taxable income by $1,000, saving you $300 in income tax (at the 30% marginal rate) plus $20 in Medicare Levy — a total of $320. At $150,000, that same $1,000 deduction saves you $390.
Working from Home Deductions
Working from home is now a permanent feature of Australian employment, and the ATO has two methods for claiming the related costs. You choose one method per year — you cannot mix them.
The Fixed Rate Method: 70 Cents per Hour
For 2025-26, the fixed rate method under PCG 2023/1 allows you to claim 70 cents for every hour you worked from home during the year. This rate covers electricity and gas for heating, cooling, and lighting your workspace, the decline in value of home office furniture and equipment, and the running costs of items used at home such as internet, phone, and computer consumables.
Because all of those costs are bundled into the 70 cents per hour rate, you cannot claim them separately on top of it. That is the "no double dipping" rule the ATO specifically flags.
What you can still claim separately under the fixed rate method: the decline in value of depreciating assets you use for work, such as a laptop or external monitor (these are not covered by the hourly rate).
The critical record-keeping requirement: you must keep a record of every hour you actually work from home across the full year. Estimates are not accepted. A contemporaneous log — a diary, a spreadsheet, or a time-tracking app — is required. If you can only produce estimates for part of the year, you can only claim for the period with actual records.
Worked example — fixed rate method:
You work from home three days a week (about 7.6 hours per day) for 48 working weeks of the year:
Hours at home: 3 days x 7.6 hours x 48 weeks = 1,094 hours Deduction: 1,094 x $0.70 = $765.80
You also bought a new work monitor for $450. The ATO effective life for monitors is 5 years, so you claim: $450 / 5 = $90 depreciation for the year (if purchased at the start of the year; pro-rata if purchased mid-year).
Total home office deduction: $765.80 + $90 = $855.80.
The Actual Cost Method
If your home expenses are high, the actual cost method may produce a larger deduction. Under this method you claim the genuine work-related portion of each running expense: electricity, gas, internet, phone, and the decline in value of furniture and equipment. You calculate the work-use percentage for each item using a reasonable basis — for example, the proportion of a room's floor area used exclusively as a home office, or the hours you use your phone for work versus personal calls.
This method requires more documentation: every bill for every month, plus a diary or usage log showing how you calculated the work-use percentages. A four-week representative diary showing consistent usage is generally accepted by the ATO for the full year.
Work-Related Car Expenses
Claiming car expenses is one of the most audited deduction categories the ATO reviews. The key rule to remember: your regular commute from home to your usual workplace is not deductible. It is a private expense. Car deductions apply when you use your own vehicle for work-related travel beyond your normal workplace.
Eligible car travel includes: driving between two separate workplaces on the same day, travelling from your workplace to a client's premises, and travel to collect work-related supplies. It does not include driving from home to your regular office or depot, even if that commute is long or inconvenient.
There are two methods.
Cents per Kilometre Method
The ATO rate for 2025-26 is 88 cents per kilometre — unchanged from 2024-25. You can claim up to 5,000 work-related kilometres per car per year using this method, producing a maximum deduction of $4,400 (5,000 x $0.88).
No fuel or maintenance receipts are required. However, you do need to demonstrate how you calculated your work kilometres — a diary of regular trips and their distances, or odometer readings tied to specific work journeys. The 88 cents per km rate covers all running costs including fuel, insurance, registration, repairs, and depreciation. You cannot claim those items separately on top of it.
Logbook Method
If your work-related car use exceeds 5,000 km per year, or your actual running costs are high, the logbook method may produce a larger deduction. You keep a logbook for a continuous 12-week period, recording every journey (date, odometer start and end, purpose). The business-use percentage from that 12-week period then applies to your actual vehicle costs for the full year.
The logbook remains valid for five years if your work travel pattern does not change significantly.
Worked example — cents per km:
You drive to client sites twice a week, averaging 28 km per round trip, for 44 working weeks:
Work km: 2 trips x 28 km x 44 weeks = 2,464 km Deduction: 2,464 x $0.88 = $2,168.32
You do not need receipts for fuel or maintenance under this method. You do need a trip record.
Clothing, Uniforms, and Laundry
This is one of the most misunderstood deduction categories in Australia, and the ATO sees a high volume of incorrect claims here.
You can claim the cost of buying and laundering clothing that falls into one of three categories: occupation-specific clothing (a nurse's scrubs, a chef's checked trousers, a tradesperson's hi-vis), a compulsory uniform that is specifically designed for your employer and is not available to the general public, or protective clothing (steel-capped boots, hard hats, non-slip shoes for hospitality workers).
You cannot claim conventional clothing, even if your employer has a dress code requiring "business attire," "black pants and white shirt," or similar generic clothing. The ATO is explicit about this: general business clothes are private expenses.
Laundry: if you claim laundry for eligible clothing, the ATO allows $1 per load for a load that contains only work clothing, or 50 cents per load for a mixed load. For claims up to $150, you do not need receipts, but you still need to be able to explain how you calculated the claim.
Tools, Technology, and Equipment
If you purchase equipment, tools, or technology that you use for work, you may be able to claim a deduction. The amount depends on the cost.
Items costing $300 or less that are used predominantly for work can be claimed as an immediate deduction in full in the year of purchase. Items costing more than $300 must be depreciated over their effective life.
For a laptop used 80% for work and 20% for personal use, costing $1,800: Work-related portion: $1,800 x 80% = $1,440 ATO effective life for laptops: 3 years Annual depreciation deduction: $1,440 / 3 = $480
Your mobile phone and internet costs are deductible for the work-related portion. If you use your phone 40% for work and 60% personally, you claim 40% of your phone plan cost and 40% of any device repayments. Keep a four-week usage diary to support the split.
Self-Education and Professional Development
You can claim the cost of courses, textbooks, seminars, and professional development if the education directly relates to your current role and is likely to maintain or improve the specific skills you use in that job or lead to an increase in your income from that employment.
The deduction does not apply to study for a new career, even if you are transitioning within a related field. A teacher studying a new teaching methodology at their current institution can claim. A nurse studying to become a doctor generally cannot — those are two separate occupations.
Claimable self-education expenses include course fees (other than HECS-HELP loans, which are repaid separately), textbooks and stationery, professional journals and subscriptions, travel to the educational institution, and the decline in value of any equipment bought specifically for the course.
If you receive a scholarship or government allowance that covers your study costs, you cannot claim the portion covered.
Investment and Other Deductions
Several deductions sit outside the work-related category but can significantly reduce your taxable income.
Investment Property
If you own a rental property, the costs of managing and maintaining that property are deductible in the year they are incurred. These include loan interest (on the investment loan, not a personal loan drawn for other purposes), council rates, water rates, landlord insurance, property management fees, repairs and maintenance (not capital improvements), and pest control and cleaning between tenancies.
Capital improvements are not immediately deductible — they are depreciated over time or form part of the property's cost base for capital gains tax purposes when you eventually sell.
Charitable Donations
Donations of $2 or more to organisations endorsed by the ATO as Deductible Gift Recipients (DGRs) are tax deductible. Donations to non-DGR causes — crowdfunding campaigns, fundraisers for individuals, or overseas aid organisations not endorsed by the ATO — are not deductible regardless of how worthy the cause.
Keep your receipts. The ATO pre-fills some donation data but not all.
Income Protection Insurance
Premiums for income protection insurance (also called salary continuance insurance) are tax deductible if the policy is held outside your superannuation fund. Premiums for life insurance, trauma insurance, or total and permanent disability (TPD) insurance held outside super are generally not deductible.
Union Fees and Professional Memberships
Union dues paid to a registered trade union are fully deductible. Professional association memberships are deductible where membership is necessary to maintain a professional licence or directly relates to your current work — for example, a registered nurse's membership of the Australian Nursing and Midwifery Federation, or an accountant's CPA Australia fees.
Tax Agent Fees
The cost of having a tax agent or accountant prepare your return is tax deductible — but in the following year, not the year in which you pay it. So the fee you pay in late 2026 to have your 2025-26 return lodged is claimed on your 2026-27 return.
The $300 Threshold Rule and Record Keeping
Two record-keeping rules govern almost every deduction:
If your total work-related deductions are $300 or less, you can still claim without receipts, but you need to be able to show how you calculated the amounts — a diary, a spreadsheet, or written notes.
If your total work-related deductions exceed $300, you must have written evidence (receipts, invoices, bank statements) for all of your expenses, not just the portion above $300. The $300 is not a "receipt-free zone" — it is a minimum threshold after which receipts become mandatory across the board.
All records must be kept for five years from the date you lodge your return.
What You Cannot Claim
The ATO publishes compliance priorities for each tax year. Common disallowed claims include:
Your daily commute from home to your regular workplace. This is a private expense regardless of how far you travel or what form of transport you use.
Conventional clothing. A "business dress code" does not make everyday clothing deductible. The ATO has rejected claims for luxury-branded clothing from a fashion industry manager attending work events, swimwear from a truck driver who stopped near water in hot weather, and gym wear from professionals who wanted to "be healthy for work." The test is whether the clothing is specific to your occupation, not whether you wear it to work.
Meals and coffee. Food and drink consumed during your ordinary working day are private expenses. The exception is overtime meal allowances specifically paid by your employer, which have separate rules.
Expenses your employer reimbursed. If your workplace repaid you for the cost, you cannot also claim a deduction. You would be double-dipping.
Costs that relate to earning income you did not declare. If you have undeclared income from a side hustle, rental property, or investment, the related deductions cannot be claimed either — and the ATO's data-matching program draws on over 600 million transactions annually from banks, share registries, employers, and online platforms.
FAQ
What can I claim on my Australian tax return in 2026?
You can claim expenses that are directly related to earning your income, that you paid yourself without reimbursement, and that you have records to support. Common categories include work-related car expenses (88 cents per km up to 5,000 km), home office expenses (70 cents per hour under the fixed rate method), tools and technology, clothing and uniforms specific to your occupation, self-education directly linked to your current job, charitable donations to DGR-endorsed organisations, income protection insurance premiums, union fees, and professional membership costs.
What is the cents per km rate for 2025-26?
The ATO cents per kilometre rate for the 2025-26 income year is 88 cents per kilometre. This covers all car running costs including fuel, registration, insurance, repairs, and depreciation. You can claim up to 5,000 work-related kilometres per car per year using this method, producing a maximum deduction of $4,400. You do not need fuel receipts, but you do need records showing how you calculated your work kilometres.
What is the work from home deduction rate for 2025-26?
The fixed rate method allows you to claim 70 cents for every hour worked from home during 2025-26. This covers electricity, gas, internet, phone, and stationery. You must keep a real-time record of hours worked at home for the entire year — estimates are not accepted. You can still claim the depreciation of work-related equipment (such as a laptop) separately on top of the hourly rate.
Can I claim clothing on my tax return in Australia?
Only specific types of clothing are deductible. You can claim occupation-specific clothing (nurse's scrubs, chef's trousers), compulsory employer uniforms that are distinctively designed and not available to the public, and protective clothing such as steel-capped boots or hi-vis gear. You cannot claim conventional business attire, such as suits, ties, or standard black clothing, even if required by your employer. Laundry costs for eligible clothing are deductible at $1 per load (work-only) or 50 cents (mixed load).
Can I claim work expenses without receipts?
For claims of $300 or less in total work-related deductions, you do not need receipts but you must be able to show how you calculated the claim. Once your total work-related deductions exceed $300, written evidence (receipts, invoices, bank statements) is required for all expenses — not just the amount above $300. Under the cents per km method, receipts for fuel or maintenance are not required, but a record of trips is needed.
Can I claim self-education expenses on my tax return?
Yes, if the study directly relates to your current job and is likely to maintain or improve the specific skills you use in that employment. Course fees (excluding HECS-HELP amounts), textbooks, professional journals, travel to educational institutions, and work-related equipment purchased for the course are all claimable. You cannot claim study for a new career path, even within a related field.
Is commuting to work tax deductible in Australia?
No. Travel from your home to your regular workplace and back is a private expense and is not tax deductible, regardless of the distance. Car expenses are only claimable for work-related travel between workplaces, travel to client sites or other work locations, and travel to collect work-related supplies. Exceptions exist for some workers who transport bulky equipment with no secure storage at the workplace.
When is the 2025-26 tax return due?
The deadline for self-lodgers (individuals lodging their own return through myTax) is 31 October 2026. If you use a registered tax agent, the deadline extends to 15 May 2027, provided you are on the agent's client list by 31 October 2026. Do not lodge too early: wait until mid-to-late July 2026 when the ATO's pre-fill data from employers, banks, and share registries is complete. Lodging before this data flows through increases the risk of errors.
What records do I need to keep for my tax return?
Keep all receipts, invoices, bank statements, and logs for five years from the date you lodge your return. For work-from-home claims, keep a contemporaneous record of hours worked (not estimates). For car claims, keep a trip log showing dates, destinations, and distances. For mixed-use items like phones or laptops, keep a four-week usage diary showing the work-versus-personal split. Digital copies are accepted by the ATO as long as they are legible and complete.
Can I claim income protection insurance on my tax return?
Yes. Premiums for income protection insurance (also called salary continuance insurance) held outside your superannuation fund are fully tax deductible. Premiums for life insurance, trauma insurance, or TPD insurance held outside super are generally not deductible. Income protection insurance held inside super is paid from your super account — the tax treatment is handled within the fund.
Final Word
Claiming the right deductions on your Australian tax return is not about finding loopholes — it is about claiming what you legitimately spent to earn your income. The 2025-26 rates are clear: 88 cents per kilometre for work-related car travel (up to 5,000 km), 70 cents per hour for working from home under the fixed rate method, and immediate deductions for work items costing $300 or less. Beyond those rates, the rules are consistent: the expense must be genuinely work-related, paid by you, and supported by records.
The ATO uses sophisticated data-matching technology and publishes compliance focus areas each year. Keeping records throughout the year, rather than scrambling in October, makes lodging straightforward and gives you confidence if questions arise.
To estimate how your deductions affect your overall tax position for 2025-26, use the Dolaro Income Tax Calculator.
This article is general information only and does not constitute financial, legal or tax advice. Always verify current rates and thresholds with the relevant government authority and seek advice from a qualified professional before making financial decisions.