Construction Worker Tax Deduction Checklist — 2025–26

Before any of the list below counts

The ATO applies the same three tests to every work-related claim. You can deduct an expense only if:

1. you spent the money yourself and weren't reimbursed by your employer;
2. it directly relates to earning your income — not just something you use while you happen to be at work; and
3. you have a record to prove it — usually a receipt, and for some claims a diary or logbook.

If an item is partly private — a phone, a pair of sunglasses — you claim only the work-related portion.

1. Tools and equipment

2. Protective clothing and laundry

The ATO distinguishes between protective clothing, which is deductible, and conventional clothing, which isn't — even if you only wear it to work.

• Claim: steel-capped boots, hi-vis vests and shirts, hard hats, safety glasses, gloves, ear protection, sun-protective clothing with a UPF rating, heavy-duty work pants designed to protect you.
• Don't claim: ordinary jeans, shorts, t-shirts, socks, runners — the ATO's own example is a worker who can't claim these because they are conventional clothing.
• Laundry: you can claim the cost of washing, drying and ironing deductible clothing. The ATO accepts a reasonable basis of $1 per load if the load is only work clothing, or 50c per load if you mix it with personal washing. Claims of $150 or less don't need written evidence, but you still need to be able to show how you worked the amount out.

3. Sun protection

If you work outdoors for extended periods, the ATO allows sunscreen, sunhats and sunglasses as a deduction, because they protect you from the risk of illness or injury at work. If you also use them on weekends, apportion the claim.

4. Car and travel — where most claims go wrong

• Home to work: not deductible, even when the site changes every few weeks. The ATO treats this as private travel.
• The bulky tools exception: you can claim home-to-site travel only if you carry bulky tools or equipment that are essential to your job, and there is no secure storage at the site. If your employer provides a locked container and you take the tools home anyway, the ATO's example says you can't claim.
• Between sites: deductible — from one job to another on the same day, from site to supplier and back, or from your employer's yard to the site.
• How to claim car travel: cents per kilometre at 88c per km for 2025–26 (up to 5,000 business km), or the logbook method using a 12-week logbook and actual costs. A ute designed to carry one tonne or more isn't a "car" for tax, so you claim the work-related portion of actual expenses with records.
• Car allowance: if your employer pays you a car or travel allowance, it's income — you declare it and claim the deduction separately.

5. Phone, internet and working from home

• Phone: the work-related percentage of your plan, based on a representative four-week record of work calls and data.
• Working from home: mostly relevant to supervisors, estimators and leading hands who do paperwork at night. For 2025–26 the ATO's fixed rate is 70c per hour, and you must have a record of your actual hours — an estimate isn't accepted. The 2026–27 rate hadn't been published when we checked; confirm it with the ATO or us before you rely on it.

6. Licences, tickets, training and union fees

• Renewing a licence or ticket you need for your current job — white card refreshers, EWP, forklift, working at heights, first aid — is deductible.
• Getting your first licence to qualify for a job isn't: the ATO treats that as getting you into the work, not doing it.
• Self-education is deductible if it maintains or improves the skills you use in your current job, or is likely to increase your income from it. A Cert IV in Building while you're a carpenter employed by a builder usually qualifies; a course to change careers doesn't.
• Union fees and industry association subscriptions: deductible.

7. Overtime meals

You can claim an overtime meal only if your employer paid you an overtime meal allowance under an industrial award or agreement, the allowance is shown as income on your income statement, and you actually bought the meal. If the claim is within the ATO's reasonable amount — $38.65 per meal for 2025–26 — you don't need receipts, but the ATO is clear that the reasonable amount isn't an automatic deduction: you must have spent it. Ordinary lunch and smoko aren't deductible.

8. Other deductions construction workers miss

• Income protection insurance premiums paid outside super.
• Tax agent fees and the cost of travelling to see your agent.
• Donations of $2 or more to a registered deductible gift recipient.
• Personal super contributions — claimable if you give your fund a notice of intent and get an acknowledgement before you lodge.
• Site-specific gear you bought yourself: first aid kit, head torch, knee pads, safety harness.

What the ATO sees claimed every year and knocks back

• Conventional clothing and footwear.
• Home-to-work travel without a genuine bulky-tools case.
• Meals and coffee during a normal shift.
• Driver's licence, speeding and parking fines.
• Tools, boots or phones your employer paid for or reimbursed.
• Gym memberships (unless your job requires an exceptional level of fitness, which site work doesn't).
• Costs of getting your first job or your first licence.

Income you must declare

Your income statement from your employer is finalised by 14 July and pre-filled in myTax. Make sure it includes every allowance — tool allowance, travel allowance, site allowance, meal allowance, first aid allowance. Allowances are income. You then claim the related expense as a deduction if you're entitled to it. Leaving an allowance out because "it's for tools anyway" is one of the fastest ways to get an ATO amendment.

Records: the $300 threshold

If your total work-related expense claims for the year are $300 or less, you don't need written evidence, though you still need to be able to explain how you worked them out. Above $300, you need written evidence for all of it — the laundry concession is the only exception, and it doesn't lift the $300 limit to $450. Keep receipts for five years. The ATO's myDeductions tool in the ATO app, or a photo of every receipt in a folder on your phone, is enough.

Coming for 2026–27: the $1,000 standard deduction

Parliament has legislated a new standard deduction for work-related expenses, starting with the 2026–27 income year — the return you'll lodge from July 2027. The ATO describes it as letting eligible taxpayers with labour income claim up to $1,000 without having spent the money or kept records. If your genuine expenses are more than $1,000 you can still itemise and substantiate them instead. It does not apply to the 2025–26 return you're lodging now, so don't claim it this year.

Due date

If you lodge your own 2025–26 return, it's due 31 October 2026. If you lodge through a registered tax agent and you're on their client list before 31 October, you generally get a later date. If you're reading this after 31 October and haven't lodged, lodge as soon as you can — a late return with a refund attached rarely attracts a penalty, but one with tax owing can.