Yes — tools you purchase for work are deductible in Australia. Items under $300 that are primarily used for work can be claimed in full in the year you buy them. Items over $300 are claimed as depreciation spread over the tool’s useful life. You must keep receipts and be able to demonstrate the work purpose.
The Quick Rule
| Item cost | How to claim |
|---|---|
| Under $300, primarily for work | Claim the work proportion in full, in the year of purchase |
| $300 or more | Depreciate over the asset’s effective life at the work-use proportion |
| Any cost, mixed use | Claim only the work proportion |
What Counts as “Tools”
The ATO interprets tools broadly for this purpose:
- Hand tools and power tools (tradies, mechanics)
- Stethoscopes and medical equipment (healthcare workers)
- Musical instruments (musicians, music teachers)
- Photography and video equipment (if used for work)
- Office equipment (keyboard, mouse, webcam, external drives)
- Testing and measuring equipment
The $300 Threshold in Practice
If you buy a screwdriver set for $85 that you use only for work — claim $85 immediately.
If you buy a drill for $380 used 90% for work — you cannot claim it in full in year one. Depreciate it:
- $380 × 90% = $342 deductible base
- Effective life of a power drill: 5 years (check ATO TR 2023/1 for current effective lives)
- Annual deduction: $342 ÷ 5 = $68.40 per year
Mixed-Use Tools
Tools used partly for personal projects (e.g., a drill used on home renovations and at work) must be apportioned:
- Only the work proportion is deductible
- Estimate based on actual usage if possible, or keep a log
Do I Need Receipts?
Yes. For tools, receipts are required. The ATO expects records for all equipment claims. If you no longer have the receipt for an older item, a bank or credit card statement showing the purchase amount and supplier may be acceptable. Keep records for five years from lodgement.
Self-Employed — Instant Asset Write-Off
Self-employed sole traders may be able to claim tools as an immediate deduction under the instant asset write-off concession (threshold varies by year — check current ATO guidance). This allows full-year deduction of the cost in the year the tool is first used or ready to use for business.
Frequently Asked Questions
Can I claim the same tools every year? No — an item is claimed once (either immediately or through depreciation). You cannot claim the purchase price again in subsequent years, though you continue to claim depreciation until the asset is fully depreciated or disposed of.
My employer provides some tools. Can I still claim my own? Yes — for tools you purchased yourself that your employer did not provide or reimburse.
Can an apprentice claim tools? Yes. Apprentices buy many of their own tools. The same rules apply — items under $300 at the work proportion in the year of purchase; items over $300 depreciated.
Can I claim tools I bought secondhand? Yes. The actual cost (what you paid) is the starting point for the depreciation calculation. Keep the receipt from the seller.
This article provides general tax information. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register.