Small Business Tax Deductions Guide

A Practical Guide for Sole Traders, Companies & Partnerships

If you run a small business, every dollar matters — and when it comes to tax, knowing what you can legally claim as a deduction can make a big difference to your bottom line.

At Bottrell Accountants, we’ve helped thousands of small business owners across Newcastle, Maitland and beyond maximise deductions, reduce tax liabilities, and stay compliant with ATO rules.

This comprehensive guide will help you understand what expenses are deductible, what records to keep, and where small business owners commonly go wrong.

What Is a Business Tax Deduction?

A business tax deduction is an expense directly related to earning assessable income in your business. It reduces your taxable profit, meaning you pay less tax.

To be deductible, expenses must:

• *  Be related directly to running your business

• *  Not be private or domestic in nature

• *  Have a valid record (receipt, invoice, logbook)

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Common Business Expenses You Can Claim

Here’s a breakdown of the most common tax-deductible expenses for Australian small businesses.

✅ Operating Expenses

• * Office supplies & stationery

• * Postage and printing

• * Telephone & internet bills

• * Business insurance (public liability, indemnity, cyber)

• * Accounting, legal, and professional advice

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✅ Home-Based Business Expenses

If you run your business from home, you may be able to claim:

• * A portion of rent or mortgage interest

• * Electricity, gas, water

• * Phone and internet

• * Cleaning and maintenance

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Methods to claim:

• * Fixed rate (67c/hour)

• * Actual cost method (must calculate business-use %)

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✅ Motor Vehicle Expenses

If you use your car for business, you can claim:

• * Fuel, repairs, servicing

• * Registration and insurance

• * Lease or interest costs

• * Depreciation

Claim methods:

• * Logbook method (keep a 12-week logbook every 5 years)

• * Cents-per-kilometre method (up to 5,000km)

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✅ Staff Wages & Super

• * Salaries and wages

• * PAYG withholding

• * Superannuation contributions

• * WorkCover and payroll tax (where applicable)

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✅ Marketing & Advertising

• * Website costs (design, hosting, domains)

• * Google Ads, Facebook Ads, SEO services

• * Business cards, flyers, signage

• * Sponsorships and event promotions

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✅ Education & Training

• * Courses that improve business skills

• * Industry seminars & workshops

• * Business coaching

❌ You can’t claim personal development courses unrelated to your business.

 

✅ Bank Fees, Interest & Merchant Fees

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• * Loan interest (business loans only)

• * Merchant and EFTPOS fees

• * Business credit card annual fees

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✅ Depreciation

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• Claim depreciation on capital assets like vehicles, machinery, tools, and office furniture.

• Use simplified depreciation for small businesses (instant asset write-off or temporary full expensing if available).