Tax Deductions for Builders and Carpenters Australia 2026

Builders and carpenters have a broad range of legitimate deductions — from the obvious (tools, ute) to the less obvious (income protection insurance premiums, union fees, technical books). Getting this right can save thousands each year.

Tools and Equipment

All tools directly used in your building work are deductible. The ATO's instant asset write-off rules apply to small business entities.

Vehicle and Travel

Builders often have significant vehicle costs — multiple site visits per day, hauling materials, towing trailers.

• Logbook method: Almost always the right choice for builders. Keep 12 weeks of records, establish your work percentage (typically 80–95%), apply to all vehicle running costs.
• Trailer: If you tow a work trailer, the trailer's costs (rego, insurance, servicing) can be claimed at the same work percentage as the vehicle.
• Multiple vehicles: You can claim for multiple work vehicles — each needs its own logbook.
• Site visits: Travel between your home office and client sites (not a fixed workplace) is generally deductible if you maintain a home office.

Licences, Registrations and Memberships

• Building licence / registration (VBA, QBCC, NSW Fair Trading, etc.) — fully deductible
• Owner-builder permit — deductible if required for your work
• White Card renewal (Construction Induction Card) — deductible
• Master Builders Association — deductible
• Housing Industry Association (HIA) — deductible
• CFMEU membership — deductible
• Home warranty insurance registration (QBCC, BSB, etc.) — deductible as a business cost

PPE and Protective Clothing

• Steel-capped boots — deductible (required on-site)
• Hard hat — deductible
• Hi-vis clothing — deductible when required on-site
• Safety harness and fall protection — deductible; also required legally for roof work
• Respirator and dust masks — deductible (hardwood dust, silica)
• Safety glasses — deductible
• Knee pads — deductible
• Sunscreen — deductible if working outdoors (ATO confirmed allowable since 2022)

Subcontractor and Labour Costs

If you engage subcontractors (concreters, electricians, plumbers, painters), their invoiced costs are deductible as a business expense — provided you have valid tax invoices with their ABN and GST amount clearly shown.

Payments to workers: If you're paying someone who is genuinely an employee (not an independent contractor), their wages must go through payroll with PAYG withholding. Misclassifying employees as contractors is an ATO audit trigger.

Home Office, Phone and Software

Builders who quote, draft contracts, manage finances and communicate with clients from home can claim a portion of home costs.

• Phone: Work-use percentage of your mobile bill (typically 70–90% for working builders)
• Home office running costs: 70 cents/hour (ATO fixed rate) for power and internet
• Software subscriptions: Buildxact, Xero, job management tools — 100% deductible if used for work
• Plans, subscriptions, reference books: AS standards, building code publications, trade reference manuals

Insurance Premiums

Most insurance premiums paid for business purposes are deductible:

• Public liability insurance — deductible
• Contract works / construction insurance — deductible
• Tools and equipment insurance — deductible
• Income protection insurance — deductible if held outside super
• Professional indemnity — deductible
• Workers compensation (premiums paid for employees) — deductible