What can Australia businesses claim as expenses?
10 common business expenses with Australian Taxation Office (ATO)-compliant rules for limited companies, sole traders and contractors in Australia.
Client Entertainment
Rarely, Australian businesses generally cannot deduct entertainment expenses (meals, drinks, recreation) under ITAA s32-5. Limited exceptions: FBT-paid entertainment, in-house cafeteria, or food provided in working overtime.
Home Office
Yes, Australian businesses and employees can claim home office running costs. The ATO offers a fixed-rate method of 70 cents per work-from-home hour (FY24–25) covering electricity, gas, internet, phone and stationery, or you can claim actual costs.
Instant Asset Write-Off
Yes, small businesses (aggregated turnover under A$10 million) can immediately deduct the cost of eligible depreciating assets up to A$20,000 per asset (the limit applied for 2025-26, and the Government has made it permanent from 1 July 2026). Multiple assets can be written off: the threshold is per asset.
Mobile Phone
Yes, mobile phone costs used for work are deductible based on business use percentage. Provide a representative 4-week diary, then apply that % to the year's bills.
Motor Vehicle Expenses
Yes, Australian businesses can claim motor vehicle costs using either the cents-per-kilometre method (88 cents per km for 2024-25 and 2025-26, and 91 cents per km for 2026-27, up to 5,000km) or the logbook method (actual costs × business use percentage from a 12-week logbook).
Professional Fees (Accountants, Lawyers)
Yes, fees paid to tax agents, accountants, lawyers and other professionals for the trade are deductible. Capital legal fees (e.g. asset acquisition) are capitalised, not deducted.
R&D Tax Incentive
Yes, eligible R&D activities receive a refundable tax offset of 18.5% above the company tax rate for groups under A$20m turnover (effectively 43.5%), or non-refundable 8.5%/16.5% for larger groups. Activities must be registered with AusIndustry.
Software Subscriptions
Yes, SaaS subscriptions used in the business are fully deductible against company income in the year incurred. Perpetual software licences over the depreciation threshold are capitalised and depreciated over 4 years.
Superannuation Contributions
Yes, employer Super Guarantee contributions are fully deductible against company income provided they reach the employee's fund on time. Under Payday Super that means within 7 business days of each payday from 1 July 2026. Personal concessional contributions up to the cap (A$30,000 for 2025-26 and A$32,500 for 2026-27) are also deductible.
Training & Self-Education
Yes, self-education and training expenses are deductible if they maintain or improve skills used in your current income-earning activity. Training to qualify for new work is generally not deductible.