Deadlines, Pitfalls and Official Sources
Work-related deduction mistakes the ATO looks for (and how to claim correctly)
The ATO's three golden rules, the claims most often reduced — car, clothing, phone, self-education, travel and working from home — and how to fix a claim you got wrong.
To claim any work-related expense, the ATO's three golden rules apply: you must have spent the money yourself and not been reimbursed, the expense must directly relate to earning your income, and you must have a record to prove it. Most rejected claims fail one of these. The areas where the ATO reports the most errors include working from home, car and travel, clothing and laundry, phone and internet, and self-education. If an expense is partly private, you can only claim the work-related part. A deduction saves tax at your marginal rate, so an incorrect $500 claim might save $160 now and cost the $160 back plus interest and possibly a penalty later.
This guide lists the common mistakes by category, shows what a correct claim looks like and explains how to fix one. It is general information for employees; business deductions are not covered.
The claims most often wrong
| Category | Common mistake | What is usually allowed |
|---|---|---|
| Car expenses | Claiming home-to-work travel | Travel between workplaces, to client sites or carrying bulky tools with no secure storage at work |
| Car expenses | Claiming 5,000 km without a reasonable basis | Cents per km up to 5,000 business km with a reasonable estimate, or a logbook for higher claims |
| Clothing | Claiming plain black pants, business suits or gym gear | Compulsory uniforms, registered non-compulsory uniforms, occupation-specific clothing and protective items |
| Laundry | Claiming without the item being deductible clothing | Washing deductible work clothing; small claims under the ATO's laundry rule |
| Phone and internet | Claiming the full bill | The work-use percentage, supported by a representative four-week diary or itemised bills |
| Working from home | Estimated hours; claiming phone and internet on top of the fixed rate | Actual hours × 70c (2024–25 and 2025–26), or actual cost with full records |
| Self-education | Courses for a new career | Courses that maintain or improve skills for your current job |
| Travel | Claiming overnight trips without records, or private days | Work-related travel with receipts or a travel diary for longer trips |
| Gifts and donations | Donations where you received something in return (raffle tickets, dinners) | Gifts of $2 or more to deductible gift recipients with nothing received in return |
Mistakes that are always disallowed
- Ordinary commuting between home and your usual workplace, even if you work late or live far away.
- Conventional clothing, even if your employer requires a colour or style.
- Grooming, gym memberships and fitness (with very rare exceptions for specific occupations).
- Child care to allow you to work.
- Fines and penalties, including parking fines on work trips.
- Expenses your employer reimbursed or paid directly.
- Costs of earning exempt or non-assessable income.
- Occupancy expenses of your home for most employees.
Records: what "a record" means
| Claim | Record needed |
|---|---|
| Total work-related claims over $300 | Written evidence (receipt, invoice, bank statement plus description) for the whole amount |
| Car: logbook method | Logbook kept for at least 12 continuous weeks, plus receipts for car expenses |
| Car: cents per km | Reasonable basis for business kilometres (diary, rosters) |
| Phone and internet | Bills plus a four-week diary representative of your use |
| Working from home fixed rate | Hours log for the full year plus one document per expense type |
| Depreciating assets over $300 | Purchase receipt and a work-use calculation |
| Travel over six nights in a row | Travel diary plus receipts |
The cents per kilometre rate is set by the ATO for each year; check the rate for the year you are lodging.
Worked example: fixing an over-claim
Illustrative: an office worker on $90,000 claimed $900 for "work clothes" (business shirts and trousers), $1,200 for a laptop used 50% for work, and $1,000 of phone costs (100% of the bill).
| Item | Claimed | Allowable | Why |
|---|---|---|---|
| Clothing | $900 | $0 | Conventional clothing |
| Laptop ($1,200, 2-year effective life, prime cost) | $1,200 | $300 | 50% work use × $600 first-year decline in value |
| Phone | $1,000 | $300 | 30% work use from a four-week diary |
| Total | $3,100 | $600 |
Over-claim: $2,500. Tax at 32%: about $800 to be repaid. If the person amends voluntarily before the ATO contacts them, they generally avoid or reduce any penalty, although shortfall interest usually applies. If the ATO found it during a review and decided reasonable care was not taken, a 25% shortfall penalty of about $200 could also apply.
How the ATO spots problems
The ATO compares claims with others in the same occupation and income range, uses data from employers (allowances on income statements), and looks for patterns such as large round numbers, claims identical to last year, or claims that don't fit the job. Its occupation guides describe what is typically deductible for nurses, teachers, police, tradespeople, retail workers and other occupations.
The $1,000 standard deduction
From the 2026–27 income year, employees can claim a standard deduction of up to $1,000 for work-related expenses without receipts (Income Tax Assessment Act 1997 s 25-130, inserted by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026). It is reduced by any work-related expenses you itemise, so in effect you get the larger of $1,000 and your itemised claims; income protection premiums and union or association fees are claimed on top. Anyone with more than $1,000 of genuine expenses still needs the usual records, and the mistakes above still matter for them. Check the ATO's standard deduction page for how it appears in myTax.
FAQ
My employer requires black clothing. Can I claim it?
No. Plain clothing is conventional even if your employer specifies it. Compulsory uniforms with the employer's logo can be deductible.
Can I claim a course I'm doing to change careers?
Generally not. Self-education must relate to your current employment activities.
What if I bought a work tool for $250?
Items costing $300 or less used mainly for producing non-business income can generally be claimed outright, minus any private use.
How do I fix a claim I now know was wrong?
Amend the return in ATO online services or through your agent. See amending a return.
Sources
- Australian Taxation Office — deductions you can claim, occupation and industry guides, records, car and clothing expenses
- Federal Register of Legislation — Income Tax Assessment Act 1997 section 8-1 and Division 900 (substantiation)
Related: common tax return mistakes, work-from-home methods, documents checklist.
