Expense Tracking for Australian Freelancers: What You Can Claim

Tracking your business expenses properly can save you thousands of dollars at tax time. But knowing what you can claim — and what you can't — is where most freelancers get confused.

Here's what you need to know.

The golden rule of deductions

You can claim a deduction for any expense that is directly related to earning your income as a sole trader or freelancer. The ATO's test is simple:

1. You must have spent the money (not someone else)
2. It must be directly related to earning your income
3. You must have a record to prove it (receipt, invoice, bank statement)

If the expense is partly personal and partly business, you can only claim the business portion.

Common deduction categories for freelancers

Home office expenses

If you work from home (and most freelancers do), you can claim:

• Fixed rate method: $0.67 per hour worked from home (covers electricity, phone, internet, stationery, and depreciation of office furniture)
• Actual cost method: Calculate the actual costs based on your usage (more work, potentially higher deduction)

Keep a record of your hours worked from home — a simple log or timesheet is enough.

Software and subscriptions

Anything you use for business:

• Adobe Creative Cloud, Figma, Canva
• Project management tools (Asana, Notion, Linear)
• Accounting software
• Domain names and hosting
• Cloud storage

Claim 100% if used only for business. Claim the business portion if used for both personal and business.

Equipment and tools

• Computer, monitor, keyboard, mouse
• Camera, microphone, lighting (for content creators)
• Specialised tools for your trade

Items under $300 can be claimed immediately. Items over $300 must be depreciated over their effective life.

Professional development

• Online courses and certifications
• Conferences and workshops
• Books and publications related to your field
• Professional memberships

Communication

• Mobile phone (business portion)
• Internet (business portion)
• Business phone line

Car and travel

• Travel to client sites
• Travel between work locations
• Trips to the post office, office supply store, etc.

You can use the cents per kilometre method ($0.85/km for 2025-26, up to 5,000 km) or the logbook method (track actual costs and business use percentage).

Note: Travel between home and a regular workplace is NOT deductible.

Insurance

• Professional indemnity insurance
• Public liability insurance
• Income protection insurance

Advertising and marketing

• Social media advertising
• Business cards
• Website costs
• Networking event entry fees

What you CANNOT claim

• Personal expenses disguised as business expenses
• Fines and penalties (parking fines, ATO penalties)
• Entertainment that is not directly business-related
• Clothing unless it's occupation-specific (uniforms, protective gear) — your everyday clothes are not deductible even if you only wear them to work
• Childcare — even if you need it to work
• Capital costs — these are claimed over time through depreciation, not as an immediate deduction

Record-keeping requirements

The ATO requires you to keep records for 5 years from the date you lodge your tax return. For each expense, you should have:

• The name of the supplier
• The amount
• The nature of the goods or services
• The date
• A receipt or tax invoice

Digital copies are fine. You don't need to keep paper receipts as long as you have a clear digital copy.

Tips for staying organised

Separate your accounts. Use a dedicated business bank account and credit card. This makes it dramatically easier to identify business expenses.

Capture receipts immediately. The moment you get a receipt, photograph it. Paper receipts fade, get lost, and end up in the washing machine.

Review monthly, not yearly. Don't wait until June to sort your expenses. A monthly 15-minute review is much less painful than a weekend-long tax-time scramble.

Use categories consistently. Pick a set of categories and stick with them all year. This makes tax-time reporting straightforward.

How AdminZero helps

AdminZero lets you snap a photo of any receipt and instantly extracts the details using AI. It auto-categorises expenses into ATO-aligned categories, matches them to your bank transactions, and flags potential deductions you might have missed.

At tax time, you get a complete, categorised deduction summary ready for your accountant.

Disclaimer: This guide is for general information only. It is not tax advice. Always consult a registered tax agent for advice specific to your situation.