Legitimate business expenses - Deductible and non-deductible
Last published 18 Feb 2020
The following Table provides details of business expenses for which deduction may be made from the gross income of a self-employed person. The deductible expenses must be essential to the primary purpose or type of the business.
Note: that some expenses may not be treated in the same manner by the Australian Taxation Office.
Business expense | Deductible? Yes or No |
|---|---|
Accountancy fees | No |
Advertising | Yes |
Amenities and refreshments for staff | No |
Bank or money transfer fees, bank surcharges or dishonour fees, account service fees | No |
Bookkeeping fees | No |
Broadband, internet and Wi-Fi support and access fees | No |
Company Registration and Return costs | No |
Computer consumables | No |
Courier costs | Yes |
Course costs, professional development, and staff training | No |
Debts of the business, including liability for bad debts or losses carried forward from previous financial periods | No |
Depreciation | Yes |
Domestic expenses | No |
Donations | No |
Drawings or Distributions | No |
Dry cleaning or laundry | No |
Electricity (domestic) | No |
Electricity (non-domestic) | Yes |
Entertainment costs | No |
Equipment and lease of equipment | Yes |
Expenses paid forward | No |
Fees - filing fees such as court, application or document lodgement fees | No |
Fees - membership of professional associations, financial or business advice | No |
Fees - parking, tolls, vehicle storage | No |
Fees - Web content manager | No |
Fines - parking, speeding or other (e.g. food handing fines) | No |
Freight | Yes |
Gas (domestic) | No |
Gas (non-domestic) | Yes |
Gifts or donations | No |
Goods to be sold | Yes |
GST on goods purchased to be on-sold | No |
Insurance premiums and fees essential to the primary purpose of the business (Exceptions to this rule are noted below.) | Yes |
Insurance premiums - Public Liability Insurance | Yes |
Insurance premiums and fees - Life, Workers Compensation, Home and Contents, or Income Protection | No |
Interest component of a loan repayment where the loan was made for the primary purpose of the business | Yes |
Legal fees | No |
Licenses essential to the primary purpose of the business | Yes |
Licenses not essential to the primary purpose of the business | No |
Materials | Yes |
Medicare levies | No |
Motor vehicle expenses essential to the primary purpose of the business | Yes |
Motor vehicle expenses not essential to the primary purpose of the business | No |
NRMA or other roadside service fees | No |
Office or business premises cleaning costs, cleaning products | No |
Office maintenance and refurbishment | No |
Payroll tax and expenses such as payroll preparation fees | No |
Personal expenses | No |
Postage | Yes |
Printing | Yes |
Principle component of loan repayment | No |
Protective clothing and uniforms | No |
Public risk insurance (Premiums) | Yes |
Purchase of capital items, small plant equipment, including mobile phones, laptops, notepads or other electronic devices | No |
Rent for commercial premises or a virtual trading space i.e. an electronic retail outlet - related to the primary purpose of the business | Yes |
Rent for residential premises | No |
Research costs | No |
Salary for the business owner/s | No |
Salary for employees | Yes |
Security installations or costs | No |
Signage | No |
Stamp Duty | No |
Stationery | Yes |
Storage fees for goods to be sold | No |
Superannuation contributions for the self-employed person/s | No |
Superannuation levy for employees | Yes |
Taxation levies | No |
Telephone (domestic) | No |
Telephone (non-domestic) | Yes |
Tools | Yes |
Training and professional development courses for the self-employed person/s | No |
Travel essential to the primary purpose of the business | Yes |
Subscriptions | Yes |
Wages for employees | Yes |
Wages for the business owner/s | No |
Water usage - domestic or non-domestic | No |
Web site development costs | No |