Freelancer Tax Deduction Optimizer

2025-26 ATO rates

Freelancer Tax Deduction Optimizer

Answer a few quick questions — find out what you can claim and roughly how much it's worth.

Most deduction guides assume you already know what's deductible. This one works backwards: tell us how you actually work, and we'll surface the deductions that likely apply to you — home office, vehicle, phone and internet, equipment — with a rough dollar estimate for each, so you walk into tax time already knowing what to ask your accountant about.

Do you work from home for your business?
Do you drive for work (client visits, deliveries, errands)?
Do you use your own phone and/or internet for the business?
Bought any equipment for the business this year? (laptop, tools, software, furniture)
Please answer at least one question with a "yes" to get an estimate.
Estimated total deductions this year
$0
Roughly what this could be worth in tax saved at your marginal rate.
    !

    No deductions selected

    Answer at least one question with a "yes" or hours/km entry so we have something to estimate.

    The deductions freelancers most commonly miss

    Most freelancers claim the obvious stuff — software subscriptions, a portion of phone bills — but underclaim the bigger, harder-to-estimate categories: home office time, vehicle kilometres, and the business-use percentage of shared equipment. Each of these uses an ATO-approved simplified method specifically so you don't need perfect records to make a reasonable claim.

    The simplified methods this tool uses
    Home office: hours/week × 52 weeks × 70c (fixed rate method, covers energy, internet, phone, stationery)
    Vehicle: business km × 88c/km (2025-26 rate, capped at 5,000 km/year)
    Phone/equipment: annual cost × business-use %
    Worked example — 20 hours/week home office, 3,000 business km, $90/month phone at 50% business use: home office ≈ $728/year, vehicle ≈ $2,640/year, phone ≈ $540/year — ≈ $3,908 in deductions, worth roughly $1,250 in tax saved at a 32% marginal rate (incl. Medicare levy).

    Fixed rate vs actual cost for home office

    The 70c/hour fixed rate method bundles electricity, gas, internet, phone, and stationery into one rate — simple, but it may understate your real cost if you have high power bills or a dedicated home office space. The actual cost method lets you claim a higher amount but requires detailed records of every separate expense and a reasonable basis for the business-use percentage of your home. If your home office costs are unusually high, it's worth asking your accountant whether actual cost beats the fixed rate for you.

    The cents-per-km cap — and what happens above 5,000km

    The simplified cents-per-km method (88c/km for 2025-26) only applies up to 5,000 business kilometres per year. If you drive more than that for work, you'll need to switch to the logbook method — tracking actual expenses (fuel, insurance, rego, depreciation) and applying your logged business-use percentage — to claim the full amount above the cap.

    This is a starting list, not a lodged return

    This tool surfaces categories and rough amounts to discuss with your accountant — it doesn't replace proper record-keeping or a tax agent's advice on your specific circumstances. For the bigger financial picture, see the income tax calculator for your overall tax position and the quarterly estimated tax calculator to plan PAYG instalments around these deductions.

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    Frequently asked questions

    What's the home office fixed rate for 2025-26?+
    70 cents per hour, covering electricity, gas, internet, phone, and stationery in one rate. You still need a record of the hours you worked from home — a diary, timesheet, or representative four-week log is enough.
    What's the cents-per-km rate for vehicles in 2025-26?+
    88 cents per business kilometre, capped at 5,000 km per year (a maximum claim of $4,400). Beyond that, you need the logbook method to claim the additional kilometres.
    Can I claim 100% of my phone bill if I use it for work too?+
    No, only the business-use portion. If you use your phone 50% for business and 50% personally, you can only claim 50% of the bill. The ATO expects a reasonable basis for this percentage, such as a representative four-week record of calls and data use.
    Do I need receipts for everything I claim?+
    Generally yes, for actual-cost claims. The simplified methods (70c/hour home office, 88c/km vehicle) don't require itemized receipts for every expense, but you still need a reasonable record of the hours or kilometres themselves.
    Can I claim the full cost of a laptop I bought this year?+
    If it's used partly for personal purposes, you can only claim the business-use percentage. Equipment over $300 generally needs to be depreciated over its effective life rather than claimed in full in the year of purchase, though small business instant asset write-off concessions may apply — check current thresholds with your accountant.
    What's the small business income tax offset?+
    A 16% offset on the tax attributable to your business income, capped at $1,000 per year. It's available to sole traders and partners (not companies) and applies automatically based on your business income — it's separate from the specific expense deductions this tool estimates.
    Is this the same as a tax refund estimate?+
    No. This shows the deductions you might be able to claim and roughly what they're worth at your marginal tax rate — it's not a full tax return calculation and doesn't account for GST, other income, offsets, or your complete deduction picture.
    This calculator provides general estimates only and is not tax advice. It uses 2025-26 ATO simplified methods (70c/hour fixed rate home office, 88c/km cents-per-km vehicle method) and assumes reasonable business-use percentages you enter. It does not verify substantiation requirements, depreciation schedules for equipment over relevant thresholds, or your eligibility for each deduction. Confirm your actual claims with a registered tax agent.

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