ABN Business Expenses Calculator Australia 2026-27
Running your own business? See what you owe and what you can claim.
Estimate deductible business expenses for ABN holders and sole traders. Covers home office (70c/hr), vehicle (91c/km), phone, subscriptions and other costs using 2026-27 ATO rates.
Uses 2026-27 ATO rates. Tax saving is an estimate — actual depends on total income and other deductions.
Select the question that matches where you are right now.
Your result is an estimate of total deductible expenses using ATO-approved methods and the inputs you provided. The tax saving figure shows the approximate income tax reduction — the real value of your deductions at your marginal rate. Use this to identify which expenses are worth tracking carefully.
Adjust inputs to see which categories produce the largest deductions. Switch to Standard mode to model your actual marginal tax rate and phone use percentage for a more accurate estimate.
Not a tax return or formal advice. The ATO may apply different apportionment or challenge claims that aren't well-evidenced. Always keep records and consult a registered tax agent for your return.
Uses 2026-27 ATO rates (70c/hr home office, 91c/km vehicle). All calculations run in your browser — no data is sent to any server.
For most ABN holders, two categories dominate: home office and vehicle. Getting these right — and keeping the required records — makes the biggest difference to your total deduction.
Every extra hour per week adds $34.84/yr to your deduction (70c × 52 weeks). A sole trader working 40 hrs/wk from home claims $1,392 — just for switching on their computer at the desk.
The cents-per-km method caps at 5,000km ($4,550). If your business km exceed this, a logbook method can claim 100% of actual vehicle costs — often 2–3× more for high-km workers.
Software subscriptions (Xero, Adobe, industry databases), professional memberships, online courses, and tools under $300 are all immediately deductible. These are often the easiest to overlook but collectively add up quickly for knowledge workers.
The best way to maximise legitimate deductions is better record keeping, not creative accounting. The ATO is relaxed about reasonable estimates supported by evidence.
A simple spreadsheet or the ATO's free myDeductions app recording your daily home office hours is all you need. This is the single highest-return record you can keep — it directly multiplies into your deduction.
Apps like Driversnote or ATO myDeductions auto-record every trip. One year of tracked km is worth up to $4,550. Most ABN holders underestimate their business km because they don't track.
Build a list of every recurring subscription at tax time. Software, streaming services with business use, cloud storage, security tools — add these to Detailed mode. They're often forgotten and fully deductible.
Once you have a picture of your deductible expenses, these are the natural next steps before lodging your return.
Use the ABN Tax Calculator to estimate income tax on your business income after these deductions. Sole traders pay tax at individual marginal rates — no flat corporate rate.
If your annual turnover exceeds $75,000, you must register for GST. Registered traders can claim GST credits on business expenses — effectively getting 1/11th back on every purchase.
Personal super contributions are deductible for sole traders up to the concessional cap ($32,500 for 2026-27). This is one of the most tax-effective strategies available — discuss with your accountant.
How ABN expense deductions are calculated
The three standard methods
For most ABN holders and sole traders, the three largest deductions are the home office fixed rate (70c/hr), the vehicle cents-per-km method (91c/km up to 5,000km), and the work-use portion of phone and internet. Each uses ATO-approved formulas that don't require complex receipts tracking.
Home office: fixed rate method
From 1 July 2022, the ATO fixed rate is 70 cents per hour worked from home. This covers electricity, gas, internet, phone, stationery and consumables as a single all-in rate. You must keep a log of actual hours worked — a four-week representative diary is acceptable. You cannot claim any of these items separately if you use this method.
| Hours/week | Annual deduction |
|---|---|
| 10 hrs/wk | $348 |
| 20 hrs/wk | $696 |
| 30 hrs/wk | $1,044 |
| 40 hrs/wk | $1,392 |
| 50 hrs/wk | $1,742 |
Vehicle: cents-per-km method
The 2026-27 rate is 91 cents per km, capped at 5,000km for cars. This gives a maximum deduction of $4,550. You don't need a logbook but must be able to explain how you calculated business km. For rideshare drivers or those exceeding 5,000 business km, the logbook method is usually more advantageous.
Full list of deductible expenses for ABN holders 2026-27
Always deductible (100%)
Expenses that are entirely work-related are fully deductible: professional indemnity and public liability insurance, accounting and bookkeeping fees, professional memberships and subscriptions, work-specific uniforms and PPE, advertising and marketing costs, bank fees on business accounts, and business-related travel (flights, accommodation, meals when away overnight).
Partially deductible (apportionment required)
Where an expense has both personal and business use, you must apportion: phone and internet (work use %), home office utilities under the actual cost method, and a vehicle used for both work and personal trips.
| Expense | Deductible amount | Notes |
|---|---|---|
| Home office (fixed) | 70c/hr | Actual hours worked from home |
| Vehicle (CPM) | 91c/km | Capped at 5,000km/yr |
| Phone/internet | Work % of bill | Keep 4-week diary |
| Tools ≤$300 | 100% immediately | Instant asset write-off |
| Tools >$300 | Depreciate | Over effective life |
| Software (SaaS) | 100% | Xero, MYOB, Adobe, etc. |
Cannot claim
Private expenses are never deductible even if you have an ABN: personal meals (unless travelling overnight for work), childcare, gym memberships (unless specific occupational requirement), fines and penalties, and entertainment costs for yourself or family.
What records the ATO requires for ABN deductions
General rule: five years
The ATO requires you to keep records for five years from when you lodge the relevant tax return. For capital items (equipment, vehicles), records must be kept for five years after you stop using the item or dispose of it.
What records to keep
For each deduction category: home office — a log of hours worked at home (weekly diary or timesheet); vehicle — the odometer reading on 1 July and 30 June each year, plus a note of each business trip (date, km, purpose) or a 12-week logbook if using the logbook method; phone and internet — a four-week representative sample of your bills with work calls/data highlighted; receipts — keep all receipts for amounts over $10.
Digital records are fine
The ATO accepts electronic records including PDFs, photos of receipts, and data exports from accounting software. Apps like Xero, MYOB Essentials, and free ATO tools like myDeductions can help. A simple spreadsheet updated throughout the year is better than trying to reconstruct records at tax time.
GST credits, tax rates, and maximising your deductions
GST credits on expenses
If you are registered for GST (required if turnover exceeds $75,000/yr), you can claim input tax credits (GST credits) on business expenses. This means 1/11th of each GST-inclusive expense is effectively rebated through your BAS, in addition to the income tax deduction on the GST-exclusive amount.
Marginal tax rates 2026-27
Your tax saving from deductions depends on your marginal rate. The calculator lets you select your bracket in Standard mode. The 2026-27 rates after the Stage 3 cuts: 0% up to $18,200; 15% from $18,201 to $45,000 (cut from 16% on 1 July 2026); 30% from $45,001 to $135,000 (reduced from 32.5%); 37% from $135,001 to $190,000; 45% above $190,000. Note: the 2% Medicare levy applies on top.
Super contributions as a deduction
Sole traders can make personal super contributions and claim them as a tax deduction (up to the concessional cap of $32,500 for 2026-27). This is one of the most tax-effective strategies available — not included in this calculator but worth discussing with your accountant.
❓ Frequently asked Frequently asked questions
What can ABN holders claim in Australia?
Home office (70c/hr fixed rate method or actual cost), phone and internet (work use %), vehicle (91c/km up to 5,000km or logbook method), professional subscriptions, tools and equipment, insurance, accounting fees, advertising, training courses related to current work, and any other expense directly incurred in earning income.
Do I need an ABN to claim work expenses?
No — employees can also claim some work-related expenses. But ABN holders (sole traders, freelancers, contractors) can generally claim a broader range of expenses because all costs of running the business are potentially deductible. The key difference is that employees must have their employer confirm they were required to incur the expense.
Can I claim home office if I work from a café or coworking space?
The fixed rate (70c/hr) applies to hours worked from your home specifically. Hours worked at a café or coworking space are not eligible for the home office rate, but the cost of the coworking membership itself is fully deductible as a business expense. Café costs (coffee, food) are generally not deductible for sole traders.
What's the difference between the fixed rate and actual cost method?
The fixed rate method (70c/hr) is simpler and covers most costs in one rate. The actual cost method claims real expenses (electricity, internet, depreciation of office furniture) but requires a dedicated home office space and more detailed records. The actual method can produce a larger deduction for those with a full room set aside exclusively for work.
Where these figures come from
Every threshold and tax rate on this page is taken from the Australian Taxation Office (ATO) — the source of record for Australian income tax, Medicare levy, HECS/HELP repayment, and capital gains tax.
- Individual income tax rates (2026–27, Stage 3) — ATO — Individual income tax rates.
- Medicare levy & surcharge — ATO — Medicare levy.
- HECS/HELP repayment thresholds — ATO — Study and training support loans.
- Capital gains tax rules — ATO — Capital gains tax.
- GST rules — ATO — GST.
- Tax offsets & LITO/LMITO — ATO — Tax offsets.
Last checked: July 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.