One of the most effective ways to reduce your tax bill is claiming all legitimate business deductions. Yet many small businesses leave money on the table by missing deductions, or worse, claim illegitimate ones that trigger ATO audits.
Common small business tax deductions
Operating expenses
Day-to-day costs of running your business are generally fully deductible, often the largest category.
- Rent for business premises
- Utilities (electricity, phone, internet)
- Office supplies and stationery
- Software subscriptions
- Marketing and advertising
- Professional fees (accounting, legal)
Motor vehicle expenses
If you use a vehicle for business, you can claim a deduction via the logbook method or cents per kilometre (capped at 5,000km).
Home office expenses
If you work from home, claim a portion of home-related expenses via the simplified method (67c/hour) or actual cost method.
- Portion of electricity and gas
- Internet and phone (business portion)
- Office furniture and equipment depreciation
- Home office repairs and maintenance
Employee costs
All employee-related expenses are deductible, a significant deduction as you grow.
- Wages and salaries
- Superannuation contributions
- WorkCover insurance
- Training and professional development
- Uniforms and protective equipment
Instant asset write-off
Small businesses can immediately deduct eligible assets below the threshold (currently $20,000 per asset for turnover under $10M).
- Computers and IT equipment
- Office furniture
- Tools and equipment
- Vehicles (under threshold, ready for use)
Thresholds and rates change, this is general information, not tax advice. Talk to us about your specific situation.