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 (extended to 30 June 2025). 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/km, max 5,000km, FY25) 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're paid by the quarterly due date. Personal concessional contributions up to the cap (A$30,000 for FY25) 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.