We hear you: tax isn’t most people’s idea of a good time. But you don’t have to be an accounting genius or spreadsheet fanatic to nail the basics, and knowing what you can claim against your tax can save you paying more than you need to.

In tax terms, a claimable expense is something you’ve paid for to help you do your job or run your business. In many cases, business expenses you clock up while doing your job can be deducted from your tax, as long as they genuinely help you generate income – and you have the records to back it up.

Here’s a quick look at what you CAN claim:

• Tools and equipment

  • If you buy tools or equipment you use to do the job, that cost is a deductible expense. This includes everything from hammers or brushes used on site, to software or electronics used for the business side of things. But not all expense claims work the same way, says chartered accountant Dylan Guitry from Wellington-based firm Affinity Accounting. “Items over $1000, like a laptop or car, use depreciation rates, meaning you can’t claim for the full amount at once. These rates are based on the purchase costs and the lifetime of the asset, but you can generally claim 20-30% per year.”

• Vehicle and travel costs

  • For most tradies, a reliable vehicle is a must. But what you can claim at tax time depends on whether you have a dedicated work car, or your trusty runabout is used for both work and personal use. If you have a dedicated work vehicle used only for business, you can claim all running costs like fuel, rego, insurance, repairs, and even loan interest may be deductible. If you use your personal car for work purposes, you need to keep a closer eye on allocating costs. This means keeping a logbook of all business-related trips, so you can claim mileage at the IRD-approved rate.

• Home office, phone and internet costs

  • If part of your home or garage is used mainly for business (like a place you do business admin or paperwork, storage space or a tool prep area), you can claim a proportion of household costs including power, internet, mortgage interest, rates and insurance. “The main methods for working out how much you can claim are based on the overall square metreage of your home and the percentage of that used for business, or the IRD’s square metre rate,” says Dylan. “We encourage people to do this as it includes a percentage of all household costs like utilities, rates and mortgage – or rent if you’re renting – and it can be a considerable amount.” If you use a mobile phone, internet service or software partly for business, you can claim the business portion of the cost. If the line or service is purely for business use, then you may be able to claim the full amount.

• And that’s not all

  • Other claimable business expenses can include advertising and signage, stationery and office supplies, protective gear or branded uniforms, subcontractor fees, courses and certifications, and repairs for tools. But remember, the expense has to relate to earning income.

What you CAN’T claim (or need to keep an eye on):

• Meal expenses

  • It would be a miserable workday without a hearty lunch and decent snacks, but personal meals are not a claimable business expense (unless they meet some specific requirements like working unusual hours).

• Jeans and hoodies

  • Everyday clothing like jeans and T-shirts don’t generally qualify as a claimable expense, even though you could wear them to work. But you can claim for uniforms, protective gear, safety clothing and specialist items like overalls or work boots.

• Leisure and fitness equipment

  • Sweating it out in a home gym or kicking back on a family getaway are great for busting stress and boosting overall wellness, making you a happier and healthier worker, right? Sure, but they aren’t claimable expenses as far as the IRD are concerned…

Avoid common mistakes

Myth: “Your first year in business is basically tax free.”

“This is one we see a lot,” says Dylan. “With the way the financial year falls, it may be quite a while before your first tax bill arrives. So the bulk of your first year might feel ‘tax free’, but don’t relax too much – that bill is still coming.”

Myth: “I don’t need to keep receipts for small purchases.”

It doesn't feel like much at the time, but small expenses can really add up over the year. Without receipts or some proof, IRD may disallow a claim, so scanned copies are essential.

Myth: “If I’m not GST registered, I can’t claim expenses.”

Being GST registered helps you claim GST back, but either way you can still claim allowable business expenses against your income tax.

Top tips for sorting expenses:

• Get organised

  • Keep records of your income and business expenses, including receipts and invoices, and scan copies so you don’t have to tackle stacks of paper. Make sure your vehicle logbook is up to date with all business trips. “Good record keeping is absolutely essential, because if you’re not sure what’s going on with your numbers and your business, that’s when things can get ugly,” says Dylan. “If you’re starting out, get set up with IRD requirements right off the bat rather than putting it off. Getting some processes sorted early on, or tackling any issues as soon as possible, really helps when it comes to finances.”

• Use dedicated bank accounts

  • Mixing personal and business expenses makes tax time a nightmare. Save yourself the hassle and set up a separate business account with a dedicated business debit card. Alongside this, it’s also a good idea to have another savings account where you set aside a portion of each payment for taxes. That way you’re less likely to get stuck when a tax bill arrives.

• Put the software to work

  • Apps like Xero, MYOB or Hnry are a big help when it comes to keeping records and tracking expenses. Not a tech fan? Even using a simple spreadsheet to stay on top of comings and goings makes tax time easier.

• Ask a pro

  • You don’t have to be making mega bucks to seek professional advice. Hiring an accountant can be a smart (and ultimately cost-saving) move for self-employed tradies and small businesses.

*This information is for general guidance only. It should not be used as a substitute for legal, business, accounting, or other professional advice.

April 2026