✅ What Are Tax Deductions?
- Rauf Hasnan
- Jun 30, 2025
- 2 min read
Updated: Jul 1, 2025
Running a small business in Australia means juggling many responsibilities, but when it comes to tax time, understanding what you can claim as a deduction can make a significant difference to your bottom line.
At ARH Consulting, we work closely with small businesses, sole traders, and trusts to ensure they are maximising their tax return and staying compliant with the Australian Taxation Office (ATO). Here's what you need to know about tax deductions for your small business.
A tax deduction reduces your taxable income, reducing the tax you owe to the ATO. Business-related expenses incurred while running your business can often be claimed as deductions, provided they meet the ATO’s guidelines.
💼 Common Tax-Deductible Business Expenses
Here are some of the most common tax deductions available to small business owners in Australia:
1. Operating Expenses
Rent or lease of business premises
Utility bills (electricity, water, internet)
Office supplies & stationery
Insurance (public liability, professional indemnity)
2. Employee & Contractor Costs
Wages and salaries
Superannuation contributions
Fringe benefits
Contractor payments (with ABN)
3. Marketing & Advertising
Website development and hosting
Social media advertising
Print and digital marketing materials
4. Vehicle & Travel Expenses
Fuel, servicing, and maintenance
Business-related travel and accommodation
Depreciation and lease payments
🔍 Tip: Keep a detailed logbook to substantiate claims.
5. Home Office Expenses
If you operate your business from home, you may be able to claim:
A portion of rent or mortgage interest
Internet and phone usage
Electricity and gas
🏠 Use the ATO's fixed rate or actual cost method (we can help you choose!).
6. Depreciation & Instant Asset Write-Off
Business equipment, tools, and tech can often be depreciated or written off instantly (if eligible). This includes:
Computers and phones
Tools of trade
Office furniture
🧾 What You Can’t Claim
The ATO is strict about ineligible claims. You generally cannot deduct:
Personal expenses
Fines or penalties
Private travel or meals (unless related to business)
📋 Keep Good Records
To substantiate your deductions, you must keep accurate and complete records, including:
Tax invoices & receipts
Bank statements
Logbooks (for vehicles)
Spreadsheets or accounting software reports
We recommend using cloud-based platforms like Xero, QuickBooks or MYOB to stay organised all year round.
🔍 ARH Consulting Can Help You Maximise Deductions
Tax deductions are powerful—but only if used correctly. At ARH Consulting, we specialise in small business taxation and help you:
Identify every eligible deduction
Stay compliant with ATO guidelines
Lodge your return with confidence
Minimise your tax bill legally and efficiently
📞 Ready to Get Started?
Let’s make this tax season your most profitable yet.
Book a personalised tax consultation with Rauf Hasnan today.
📞 (+61) 451 072 305
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