Published: March 2026 (updated from September 2025)
The ATO's record-keeping rules require receipts or invoices to substantiate most tax deductions. But there are specific categories where deductions are permitted without receipts, provided you use the correct method and keep the right alternative records.
This guide covers what Australian sole traders and small business owners can claim without receipts in 2025-26, the current rates for each method, what records you do need to keep, and the limits that apply. The rates have changed from prior years - the original version of this article contained outdated figures that have since been updated.
This article covers deductions relevant to sole traders and individuals. For broader business deduction rules, see our guide on bookkeeping for small business in Australia and our GST rules bookkeeping cheat sheet.
"Without receipts" does not mean without records. Every deduction the ATO permits without formal receipts still requires alternative evidence - a diary, a logbook, bank statements, a timesheet, or some other contemporaneous record. The ATO may ask how you calculated any claim, and without a record to back it up, the deduction will be disallowed.
The categories below each have specific substantiation methods that replace the receipt requirement. Using the correct method and keeping the required alternative records is what makes the deduction valid.
The cents per kilometre method lets sole traders and individuals claim business-related car travel without receipts for individual running costs, up to a maximum of 5,000 kilometres per car per year.
Current rate: 88 cents per kilometre for both 2024-25 and 2025-26. This is up from 85 cents in 2023-24. The 88 cents rate covers all car running costs - fuel, insurance, registration, servicing, and depreciation - so you cannot claim any of these separately on top of the cents per kilometre amount.
What you need to keep: A record showing how you calculated your business kilometres. This can be a diary with trip dates, destinations, and purposes, an app that tracks business trips, or odometer readings with notes. The ATO does not accept a round number estimate with no supporting record.
What counts as business travel: Client visits, travel between two work locations, and business errands. Commuting from home to your regular workplace is not claimable unless your home is genuinely your principal place of business.
Maximum deduction at 88 cents: $4,400 for 5,000 kilometres.
Example: A Brisbane consultant drives 3,200 km visiting clients across the quarter. At 88 cents per kilometre the deduction is $2,816, supported by a log noting each visit date, destination, and purpose.
Note: parking fees and tolls incurred on business trips can still be claimed separately even when using the cents per kilometre method, because they sit outside what the flat rate covers.
Claims above 5,000 km require the logbook method, which involves keeping detailed records for a minimum 12-week continuous period and retaining all receipts for vehicle expenses.
If you work from home, you can claim home office running costs using the ATO's fixed rate method without needing receipts for each individual expense - but you do need to keep specific records.
Current rate: 70 cents per hour worked from home for 2024-25 and 2025-26. This rate increased from 67 cents (which applied in 2022-23 and 2023-24). The original version of this article incorrectly quoted 67 cents - the current rate is 70 cents.
What the 70 cents covers: Electricity and gas for heating, cooling and lighting, home and mobile internet and data, mobile and home phone usage, and stationery and computer consumables. You cannot claim any of these expenses separately on top of the fixed rate -- that would be double-dipping.
What you can still claim separately on top of the 70 cents per hour: decline in value (depreciation) of work-related assets like a desk, chair, or monitor, and repairs and maintenance to those assets.
What you need to keep:
You do not need a dedicated home office to use the fixed rate method under the current rules.
Example: A Melbourne bookkeeper works from home three days per week for 48 weeks, approximately 1,152 hours. At 70 cents per hour the fixed rate deduction is $806.40. She keeps a timesheet updated weekly showing her work-from-home hours and one quarterly electricity bill.
For those whose actual home office costs exceed the fixed rate calculation, the actual cost method allows claiming the genuine work-related proportion of each expense, but requires detailed records including all receipts and a calculation of the work-related use percentage for each expense category.
Sole traders and employees can claim up to $300 in total for work-related expenses without receipts. This applies to individual items or a combination of items - the $300 is the cumulative limit for receipt-free claims in this category.
What qualifies: Work-specific items directly related to earning income - stationery, tools, professional subscriptions, minor equipment, or similar items that you would not have purchased but for your work.
What you need to keep: A diary entry or note describing the expense, the amount, the date, and the work-related purpose. Bank statements showing the payment help corroborate the claim.
What does not qualify: Personal items that you use partly for work, clothing that is not a compulsory or occupation-specific uniform, or general expenses that are not directly connected to generating income.
Limit: The moment your total receipt-free work-related expense claims exceed $300, receipts or invoices become mandatory for the full amount - not just the amount above $300. Keep receipts for anything over this threshold.
Example: A Sydney freelance designer claims $220 for a book on typography, a USB hub, and some specialist pens, supported by bank statement entries and a diary note describing each item's work purpose.
You can claim laundering costs for work-specific uniforms without receipts up to $150 per year.
What qualifies: A compulsory uniform that is distinctive to your employer or occupation - meaning it would not be worn as everyday clothing. Branded workwear with the employer's logo or name qualifies. A plain white shirt does not qualify, even if you wear it only to work.
What you need to keep: A diary noting the frequency of washing and the garments laundered. The ATO expects a reasonable estimate based on actual usage - for example, three washes per week at $1 per wash equals $156 per year, requiring some receipts given it exceeds the $150 threshold.
Limit: Above $150, receipts are required.
Example: A Perth cafe worker washes their branded apron and branded polo twice per week for 40 weeks - 80 washes at approximately $1.50 per wash is $120 for the year, which sits under the $150 limit and can be claimed with a diary record.
Individual expenses under $10 can be claimed without receipts up to a combined total of $200 per year. This is designed for genuinely minor incidental expenses where receipts are impractical.
What qualifies: Small business-related costs like parking meters, bus or train fares for business trips, minor sundry supplies, or similar low-value items.
What you need to keep: A diary or notebook entry recording the date, amount, and business purpose of each expense.
Limit: Once your combined receipt-free claims under this category reach $200, anything further requires a receipt.
Example: A Melbourne sole trader makes eight client visits by public transport at $4.50 per return trip - $36 total. She notes each trip in her diary with the client's name and the date. This is well within the $200 limit and requires no receipts.
The ATO cross-references deduction claims against industry benchmarks and prior year patterns. Claims that look out of proportion - unusually high car kilometres, home office hours that exceed plausible working time, or work-related expense claims that seem inconsistent with the occupation - attract attention.
The most common substantiation failures the ATO finds:
If the ATO audits a deduction and you cannot produce the required alternative record, the claim will be disallowed. Penalties for false or misleading statements on tax returns can apply at 25% to 75% of the shortfall amount, depending on the circumstances.
Our ATO compliance health check tool helps identify gaps in your current compliance position.
Use a digital tool from day one. The ATO's myDeductions app allows you to photograph receipts, record car trips with GPS, and log work-from-home hours throughout the year. Starting at the beginning of the financial year and recording as you go is far easier than reconstructing records at tax time.
Keep a separate business bank account. Running business expenses through a dedicated account with a debit or credit card makes it straightforward to identify and substantiate business costs, even without individual receipts. Bank statements corroborate claims effectively.
Record home office hours in real time. The ATO explicitly states it will not accept estimates of home office hours for the fixed rate method. A simple timesheet or calendar entry each day you work from home takes 30 seconds and protects the deduction.
Review the rates annually. The cents per kilometre rate, home office fixed rate, and laundry thresholds are reviewed each year. Using an outdated rate risks either under-claiming (leaving money on the table) or over-claiming (ATO audit risk). Our tax brackets guide covers the broader tax context for business owners.
Work with a registered bookkeeper or tax agent. If your deductions are complex - high business car use, significant home office expenses, mixed personal and business assets - professional review before lodgement is worth the cost. The ATO's scrutiny of work-related deductions increases each year, and a qualified professional can identify both missed deductions and claims that would attract attention.
Can I claim tax deductions without any records at all?
No. "Without receipts" means without a formal receipt from the supplier - it does not mean without any records. Every receipt-free deduction requires alternative evidence: a diary, logbook, timesheet, bank statement, or other contemporaneous record. Without any records, the deduction will be disallowed if the ATO queries it.
What is the cents per kilometre rate for 2025-26?
88 cents per kilometre, unchanged from 2024-25. This is up from 85 cents in 2023-24. The rate covers all car running costs including fuel, insurance, registration, servicing, and depreciation. You cannot claim any of these separately on top of the cents per kilometre amount. Maximum claim is 5,000 km per car.
What is the home office fixed rate for 2025-26?
70 cents per hour worked from home, applicable from 1 July 2024 onwards. This increased from 67 cents in 2022-23 and 2023-24. You must keep a record of actual hours worked from home for the entire year - estimates are not accepted. You can claim asset depreciation (desk, chair, monitor) separately on top of the 70 cents.
Can I claim home office expenses and separately claim my internet bill?
No. The 70 cents per hour fixed rate already covers internet and phone expenses. Claiming the fixed rate and then separately claiming your internet bill is double-dipping and will be disallowed. If your actual home office costs exceed what the fixed rate produces, consider the actual cost method instead - but this requires receipts and detailed usage calculations.
What happens if I claim work-related expenses over $300 without receipts?
The entire claim is at risk, not just the amount above $300. The $300 threshold is the total limit for receipt-free work-related expense claims. Above that level, you need receipts or invoices for the full amount claimed. If the ATO reviews your return and finds claims above $300 without receipts, they will disallow the deduction and may apply a failure-to-take-reasonable-care penalty.
Can I claim laundry for a plain work shirt?
Only if it is a compulsory uniform or occupation-specific clothing. A plain white shirt, black trousers, or general smart-casual clothing that could be worn anywhere does not qualify even if you only wear it to work. The uniform must be distinctive to the employer (usually carrying a logo or name) or genuinely occupation-specific (protective clothing, chef's whites, etc.).
How long do I need to keep my records?
Five years from the date you lodge your tax return for that income year. This applies to both formal receipts and alternative records like diaries, logbooks, and timesheets. Keep digital backups of any paper records.
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We review and check articles periodically. Rates and thresholds are sourced from the ATO and are current as at March 2026 for the 2025-26 financial year. Tax rules change and individual circumstances vary. Nothing in this article constitutes financial or tax advice. Please consult a qualified professional for advice specific to your situation.
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