Everything Brisbane small business owners and sole traders need to know to maximise their return this financial year.
Australian small businesses leave an estimated $7,000or more on the table each year by missing tax deductions they’re entitled to claim. Whether you’re a sole trader working from your kitchen table inPaddington or running a growing team out of Fortitude Valley, the ATO offers a wide range of deductions designed to reduce your taxable income — but only if you know they exist and keep the right records.
This guide covers every major small business tax deduction available in the 2025–26 financial year, including the latest changesto the instant asset write-off, home office rates, and vehicle claims. We’ve written it in plain English so you can take action now — not after tax time has passed.
A tax deduction is a business expense that reduces the amount of income you pay tax on. If your business earns $120,000 in revenue and you have $30,000 in legitimate deductions, you only pay tax on $90,000.
The ATO’s golden rule is simple: to claim a deduction, the expense must directly relate to earning your business income. If an expense has both business and personal use — like a mobile phone or car — you can only claim the business portion.
You also need records to prove it. The ATO requires you to keep receipts, invoices, and bank statements for five years. No receipt, no deduction — it’s that straight forward. Cloud accounting software like Xero or MYOB makes this significantly easier than keeping shoeboxes of paper.
The $20,000 instant asset write-off has been extended through to 30 June 2026. This means if your business has an aggregated annual turnover under $10 million, you can immediately deduct the full cost of eligible assets that cost less than $20,000each.
The key details:
• Per-asset basis: The $20,000 threshold applies to each individual asset, not the total. You can write off multiple assets in the same year.
• New and second-hand: Both new and used assets qualify, as long as they’re first used or installed ready for use between 1 July 2025 and 30 June 2026.
• Common examples: Laptops, printers, tools, work vehicles (under $20,000),office furniture, point-of-sale systems, and software.
• Over $20,000? Assets costing $20,000 or more go into the general small business depreciation pool — depreciated at 15% in the first year and 30% each year after.
Important: This threshold drops to $1,000 on 1 July 2026
Unless the Government extends it again, the instant asset write-off threshold will revert to just $1,000 from the 2026–27 financial year. If you’ve been putting off equipment purchases, now is the time to act.
Here’s a comprehensive breakdown of the most valuable deductions available to Australian small businesses, organised by category.
If you use your car for business purposes — visiting clients, picking up supplies, travelling between work locations — you can claim vehicle expenses using one of two methods:
You can also claim business travel expenses including flights, accommodation, meals, and transport when travelling overnight for work.
If you work from home — even part of the time — you can claim home office expenses. From 1 July 2024, the ATO’s fixed rate method is 70 cents per hour.
This rate covers electricity, phone, internet, stationery, and computer consumables. On top of the 70c/hour, you can separately claim the decline in value of office furniture and equipment (like your desk, chair, and computer).
Records required: You must keep a record of the actual hours you work from home. Timesheets, rosters, or a diary updated at the time of working all count. Estimates are not accepted.
If you have a dedicated home office, you may also be able to claim occupancy expenses (a portion of rent, mortgage interest, council rates) — but be aware this can affect your capital gains tax exemption on your home. Talk to your accountant before claiming occupancy expenses.
Business equipment is one of the easiest deductions to claim. Common items include:
• Computers, laptops, tablets, and monitors
• Printers, scanners, and office furniture
• Software subscriptions(Xero, MYOB, Microsoft 365, Adobe, Canva)
• Website hosting, domain registration, and email services
• Tools and machinery specific to your trade
Items under $20,000 can be instantly written off under the instant asset write-off (see above). Items over that threshold are depreciated over their effective life.
Premiums for business-related insurance are fully deductible. This includes:
• Public liability insurance
• Professional indemnity insurance
• Income protection insurance (the premium, not the payout)
• Workers’ compensation insurance
• Business contents and equipment insurance
Fees for professional services are also deductible: accountants, bookkeepers, tax agents, lawyers (for business matters), and financial advisers.
Everything you spend to promote your business is deductible:
• Google Ads, Facebook/Instagram ads, and other digital advertising
• Website design and development costs
• Business cards, signage, and printed materials
• Social media management tools and subscriptions
• SEO and content marketing services
• Sponsorships and promotional events
If you have employees, superannuation is compulsory at 12% of ordinary time earnings (from 1 July 2025). These contributions are tax-deductible for your business.
If you’re a sole trader, you can also make personal super contributions and claim a tax deduction for them — a powerful strategy to reduce your taxable income while building your retirement savings. The concessional contributions cap is $30,000 per year (2025–26).
These are the deductions that slip through the cracks every year. They’re small individually, but add up fast:
• Bank and merchant fees: Monthly account fees, PayPal/Stripe transaction fees,EFTPOS terminal charges.
• Industry association memberships: Professional body fees, trade union dues, chamber of commerce memberships.
• Subscriptions and publications: Industry magazines, journals, online resources, and news services related to your work.
• Training and education: Courses, workshops, seminars, and conferences that maintain or improve your skills for your current business. (Note: a course to get into a new field is generally not deductible.)
• Bad debts: If a customer owes you money and you’ve genuinely written it off as unrecoverable, you can claim it as a deduction.
• Repairs and maintenance: Fixing equipment, repainting your office, replacing broken tools. (Capital improvements are different — they’re depreciated, not instantly deducted.)
• Protective clothing and uniforms: If you wear branded uniforms, safety gear, or occupation-specific clothing that isn’t suitable for everyday wear.
• Phone and internet: The business percentage of your personal phone plan and home internet (if you’re not already claiming this under the home office fixed rate).
Not everything is deductible. Here are the most common expenses that catch business owners out:
• Private or personal expenses: Groceries, gym memberships, personal clothing, and personal travel are never deductible — even if you pay for them from a business account.
• Entertainment: Client lunches, event tickets, and corporate hospitality are generally not deductible (with limited exceptions under FBT).
• Traffic fines and penalties: Speeding tickets, parking fines, and ATO penalties cannot be claimed.
• Initial capital: The money you put into starting your business is not a deduction — it’s capital. However, some startup costs (like professional fees for setting up a company structure) may be deductible over five years.
• ATO interest charges(from 1 July 2025): General Interest Charges on late tax payments are no longer deductible. This is a new change —pay your tax on time to avoid non-deductible penalties.
Good record-keeping is the difference between claiming everything you’re entitled to and leaving thousands of dollars unclaimed. The ATO requires you to keep records for five years from the date you lodge your tax return.
Here’s what a solid system looks like:
1. Use cloud accounting software (Xero, MYOB, or QuickBooks) to automatically categorise transactions from your bank feed.
2. Scan or photograph receipts immediately using the ATO app, Hubdoc, Dext, or your accounting software’s receipt capture feature.
3. Separate business and personal finances. A dedicated business bank account and card makes tax time infinitely easier.
4. Keep a vehicle logbook if you claim car expenses using the logbook method.
5. Track your working-from-home hours in a diary, timesheet, or roster — the ATO does not accept estimates.
Tax deductions aren’t just about reducing your tax bill —they’re about making sure you keep more of the money your business earns. The difference between a business owner who claims everything they’re entitled toand one who doesn’t can easily be thousands of dollars every year.
If reading this guide has made you realise you might be missing deductions — or if you’re just not sure where you stand — it’s worth getting a professional review.
Our Brisbane accountants can help you save more and stress less. Book a free consultation today.
Book Free Consultation