Tools & PPE Tax Deductions 2025-26

How to claim everything from power tools and hand tools to safety boots, hi-vis, and hard hats.

$300

Instant Write-off (PAYG)

$20,000

Write-off (ABN Business)

$1,280

Typical Tools Claim

$150

Laundry No-Receipt Max

How Tool Deductions Work

The ATO divides tool claims into two simple categories based on the $300 threshold. This threshold applies per item, not per total claim. Understanding which side of the line your tools fall on is the key to getting your claim right.

The $300 Threshold — Instant Asset Write-Off

If a tool costs less than $300, you can claim the full cost as an immediate deduction in the year you bought it. You do not need to depreciate it over multiple years. The ATO does not require a receipt for items under $300, but keeping receipts for everything is strongly recommended in case of audit.

💡 Tip: The $300 threshold is per individual item, not per purchase. Buying three $250 tools in one trip means each qualifies for the instant write-off. Buying one $350 tool means you must depreciate it — even if your total spend is the same.

Tools $300 and Over — Depreciation

For tools costing $300 or more, PAYG employees must depreciate the cost over the tool's effective life. The ATO publishes standard effective life schedules for common tools:

Tool	Effective Life	Annual Deduction (approx)
Circular saw ($350)	5 years	$70/year
Angle grinder ($400)	5 years	$80/year
Power drill ($500)	5 years	$100/year
Welder ($1,200)	7 years	$171/year
Compressor ($800)	8 years	$100/year
Generator ($1,500)	8 years	$187/year

Straight-line depreciation example. Actual deductions depend on the method chosen (prime cost vs diminishing value).

📌 ABN contractors: If you operate as a small business (aggregated turnover under $10 million), the instant asset write-off threshold is $20,000. You can immediately deduct any tool or asset costing less than $20,000 in the year of purchase, rather than depreciating it. This makes a huge difference for tradies buying expensive equipment.

Power Tools

Power tools are the biggest single deduction category for most tradies. Whether you are a carpenter, electrician, plumber, or metal fabricator, you can claim every power tool you buy for work.

Under $300 (Instant Write-Off)

Most individual power tools fall under $300 and qualify for an immediate deduction. Common examples:

Angle grinders ($80–$250)
Jigsaws ($80–$200)
Orbital sanders ($60–$200)
Small power drills ($80–$250)
Heat guns ($40–$150)
Nail guns (starter models up to $290)
Impact drivers ($100–$250)
Battery packs and chargers ($80–$250)

You can claim the full cost in the year of purchase, and no receipt is strictly required — though keeping one is best practice.

$300 and Over (Depreciation)

Higher-end tools that cost $300 or more must be depreciated:

High-end circular saws ($300–$700)
Planer/thicknessers ($400–$1,500)
Large angle grinders ($300–$600)
Concrete saws ($500–$2,000)
Professional hammer drills ($400–$1,000)
Rotary hammers ($350–$900)
Welding machines ($500–$3,000)
Compressors ($400–$2,000)
Generators ($500–$5,000)

⚠️ You must keep receipts for items $300 and over. The ATO will disallow the claim if you cannot produce an itemised receipt showing the supplier, date, description, amount, and ABN.

Hand Tools

Hand tools are fully deductible and usually fall well under the $300 threshold, so most tradies claim them as an immediate deduction. Common hand tool claims include:

Spanners and wrenches — Socket sets, combination spanners, Allen keys
Hammers — Claw hammers, sledgehammers, mallets
Screwdrivers — Flathead, Phillips, Torx sets
Pliers and cutters — Side cutters, long-nose, multigrips, cable cutters
Measuring tools — Tape measures, spirit levels, squares, laser measures
Knives and cutters — Utility knives, snips, tin snips
Chisels and punches — Wood chisels, cold chisels, centre punches
Files and rasps — Metal files, wood rasps, diamond files
Clamps and vices — Work-holding tools

Most hand tools cost $50–$200 each, so virtually all of them qualify for the instant write-off. Keep a rough list with estimated costs and a receipt for any bulk purchase over $300.

PPE — Personal Protective Equipment

PPE is fully deductible if you purchased it yourself and it is required for your work. The ATO recognises that PPE is not ordinary clothing — it is protective gear you would not wear outside of work.

Safety Boots

Steel-cap, composite-cap, or alloy-toe work boots are one of the most common tradie deductions. You can claim the full cost of boots that meet Australian safety standards (AS/NZS 2210.3). Prices typically range from $120 to $400 per pair.

💡 Tip: Even if your employer provides a boot allowance, you can still claim the gap if the allowance does not cover the full cost. Just declare the allowance as income and claim the boots as a deduction.

If your boots cost under $300, claim the full cost in one year. Over $300, you may need to depreciate them — though many tradie boots sit just under the threshold.

Hi-Vis Clothing

High-visibility clothing meeting AS/NZS 4602 is fully deductible. This includes:

Hi-vis vests ($15–$50)
Hi-vis long-sleeve shirts ($25–$60)
Hi-vis jackets and raincoats ($50–$150)
Hi-vis pants ($30–$80)
Hi-vis shorts ($25–$60)

Hi-vis with your employer's logo printed on it is also deductible as compulsory work clothing. Keep a receipt or a screenshot of the online order confirmation.

Hard Hats & Head Protection

Safety helmets meeting AS/NZS 1801 are deductible. Standard hard hats cost $15–$60. Full-brim hard hats for sun protection cost $30–$80. If you purchased your own hard hat for site compliance, you can claim the full cost.

Gloves

Work gloves are an ongoing expense for most tradies. You can claim:

Riggers gloves ($5–$30 per pair)
Cut-resistant gloves ($10–$40 per pair)
Welding gloves ($15–$50 per pair)
Rubber or chemical-resistant gloves ($5–$25 per pair)
Insulated gloves for electrical work ($20–$80 per pair)

If you go through multiple pairs a year, keep a rough count and receipts for each purchase. Bundling them into a single "gloves" line item is acceptable if you can justify the total.

Sunscreen & Sun Protection

If you work outdoors — and most tradies do — sunscreen and sun protection items are deductible. This includes:

SPF 50+ sunscreen ($10–$30 per bottle)
Lip balm with SPF ($5–$15)
Wide-brim sun hats ($20–$60)
UV-protection sunglasses ($30–$200)
Cooling towels and neck shades ($10–$30)

💡 Tip: Australia has the highest rate of skin cancer in the world. The ATO explicitly allows sunscreen claims for outdoor workers. Keep a receipt for your first purchase and then estimate annual usage — a reasonable estimate based on your work pattern is acceptable.

Other PPE Items

Beyond the main categories, tradies frequently claim these PPE items:

Item	Typical Cost	Notes
Safety glasses / goggles	$10–$50	Clear and tinted pairs
Face shields	$15–$60	For grinding, welding, chemical work
Hearing protection (earplugs)	$10–$30 per box	Disposable plugs
Hearing protection (earmuffs)	$25–$100	Reusable, replace pads
Knee pads	$20–$80	For flooring, tiling, carpentry
Tool belts and pouches	$50–$250	Leather or nylon
Respirators / dust masks	$15–$100	P2 rated for dust, paint fumes
Safety harnesses	$100–$500	For working at heights
Welding helmets	$50–$400	Auto-darkening models common

Tool Belts, Bags & Storage

You can claim the cost of tool belts, tool bags, tool boxes, and storage systems to carry and protect your tools. These include:

Leather or nylon tool belts ($50–$250)
Tool pouches and holsters ($20–$80 each)
Tool bags and totes ($30–$200)
Tool boxes and chests ($50–$500)
Tool rolls and organisers ($15–$60)
Site boxes and job boxes ($100–$600)

Most of these items are under $300 and qualify for the instant write-off. For expensive tool chests or gang boxes over $300, PAYG tradies need to depreciate them.

Laundry of PPE & Work Clothing

If you wash your own hi-vis, work shirts, or PPE, you can claim laundry expenses:

Situation	Amount	Evidence Needed
Work-only load	$1 per load	Diary record
Mixed load	50¢ per load	Diary record
Total under $150	Up to $150	No written evidence needed

💡 Tip: Most tradies claim $100–$150 for laundry without receipts. If you do a couple of work-load washes per week, this is easy to justify.

Claiming Without Receipts

Many tradies ask: "What if I lost the receipt or bought tools from a market or cash sale?" The ATO allows claims without receipts for items under $300, but you must be able to explain how you calculated the amount. A reasonable estimate based on your trade is acceptable.

⚠️ "Reasonable estimate" does not mean guessing. If you claim $2,500 for tools with no receipts and the ATO audits you, you need a credible basis for the number — for example, "I bought two batteries at $180 each and a grinder at $120 in March." A diary note made at the time is your best friend in an audit.

Summary — Tools & PPE Checklist

Category	Deductible?	Receipt Needed?	Notes
Power tools under $300	✅ Yes	Recommended	Full cost in one year
Power tools $300+	✅ Yes	Required	Depreciate over effective life
Hand tools	✅ Yes	Recommended	Most under $300, instant write-off
Safety boots	✅ Yes	Recommended	If under $300, full deduction
Hi-vis clothing	✅ Yes	Recommended	Must meet AS/NZS 4602
Hard hats	✅ Yes	Recommended	AS/NZS 1801 compliant
Gloves	✅ Yes	Recommended	Reasonable estimate OK
Sunscreen	✅ Yes	Recommended	Outdoor workers only
Tool belts / bags	✅ Yes	Recommended	Under $300 mostly
Ordinary clothes	❌ No	N/A	Even if only worn at work

📌 Official resource: ATO Tradies and Apprentices Guide

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