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Legitimate business expenses - Deductible and non-deductible

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.

Deductible and Non-deductible business expenses

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

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Last updated: 18 Feb 2020