What business expenses can you claim with an ABN as a working holiday maker?

The rules for ABN deductions are different from the rules for PAYG employee deductions, and the records required are stricter. Without proper documentation, the ATO can disallow the claim during a review.

What can a working holiday maker on an ABN claim?

The general rule is that an expense is deductible if it is directly related to earning your ABN income and you have a record to prove it. Common categories include:

• Tools and equipment: items required for the work, such as a chainsaw for tree work, a vacuum for cleaning contracting, or a delivery bag for courier work
• Protective clothing and safety gear: high-vis vests, steel-cap boots, gloves, hard hats
• Vehicle running costs: fuel, registration, insurance, and maintenance for kilometres driven specifically for work (private travel is not deductible)
• Mobile phone and internet: the work-related percentage of your usage
• Licences and certifications: White Card, RSA, and other industry tickets directly required by your work
• Bank fees and merchant charges: card payment fees on a business account
• Professional services: registered tax agent fees and bookkeeping costs

Items used for both work and private purposes can only be claimed at the work-related percentage. A phone used 60% for work means 60% of the bill is deductible.

What records does the ATO require?

For every expense claimed, the ATO requires evidence of the cost and evidence that it was for work. The minimum is a receipt or tax invoice showing the supplier, the date, the amount, and a description of the item. For expenses claimed on an apportioned basis (phone, vehicle, internet), you also need a record of the work-use percentage, supported by a logbook or representative period of usage.

Without records, the deduction cannot be claimed, even if the expense was genuinely incurred.

What cannot be claimed?

Some expenses look like they should be deductible but are not. The most common mistakes include:

• Travel from home to a regular workplace (this is private, not business)
• Clothing that is not specifically protective or branded uniform
• Food and drink during the working day (not deductible for ABN holders any more than for employees)
• Accommodation in your home base, even if you work from home
• Costs incurred before the ABN was registered

See our article on vehicle expenses and logbooks for the detailed rules on claiming car-related costs.

Why do working holiday makers under-claim deductions?

The two main reasons working holiday makers leave deductions on the table are:

• Not keeping receipts because they did not realise the items were claimable
• Not understanding which costs qualify under ABN rules versus PAYG rules

A working holiday maker doing farm contracting work with their own equipment, for example, often has thousands of dollars of legitimate deductions sitting in faded receipts at the bottom of a backpack. Without an organised record, those deductions are lost at tax time.

How does our service handle ABN deductions?

When we lodge your tax return at the end of the financial year, our team reviews your ABN income against your work type and identifies every deduction category you are entitled to claim. We help you compile the supporting records for each claim, apply the correct apportionment for shared-use items, and make sure the deduction is defensible if the ATO reviews the return.

For working holiday makers earning under an ABN, the difference between an unreviewed return and a properly prepared one is often several thousand dollars in tax. Get in touch with our team before the financial year ends to make sure your records are in order.