Tax deductions and accounting for electricians.
You can generally claim your tools, licensing, testing equipment, work vehicle running costs and insurances against your electrical income, provided they relate to earning it and you can show a record. This guide walks through what electricians typically claim, how GST works on jobs and materials, and how we run the books for sparkies. We're Brisbane based and work with electrical contractors right across Australia.
Updated July 2026 · Reviewed by the LINK Advisors team
What electricians can claim.
The deductions that matter most in your trade, in rough order of value. Every one still has to pass the ATO's tests: you paid for it, it relates to earning your income, and you can show a record.
Work vehicle running costs
Your ute or van used to get to jobs, carry stock and store tools is generally deductible for its business-use portion, whether you use the logbook method or the cents-per-kilometre method. Fit-outs, racking and signage are usually claimable too. Keep a logbook if you want the higher claim - it pays for itself.
Test and tag / testing equipment
Multimeters, insulation testers, RCD testers and test-and-tag gear used for your work are generally deductible, either upfront or depreciated depending on cost and the instant asset write-off rules current at the time - check the current threshold with us.
Licence renewals and registrations
Your electrical work licence, restricted electrical licence and any state registration renewal fees are generally deductible as a cost of holding your ticket.
Tools of trade
Hand tools, power tools, drill sets and specialist electrical tools are generally deductible, split between immediate deduction and depreciation depending on cost.
Protective and occupation-specific clothing
Insulated gloves, arc-rated clothing, safety boots and branded uniforms are generally deductible. Plain clothes you happen to wear on site aren't, even if you'd never wear them anywhere else - the ATO draws a hard line here.
Public liability and professional insurance
Premiums for public liability, tool insurance and income protection tied to your trade income are generally deductible.
Training and CPD
Courses required to keep your licence current, plus genuine skills upgrades relevant to electrical work, are generally deductible.
Mobile phone and data
The work-use portion of your phone and data plan for quoting, invoicing and job coordination is generally deductible - keep a note of your business-use percentage.
Union or association fees
Membership of a relevant trade association or union is generally deductible.
Home office and admin time
If you do quoting, invoicing or bookwork from home, a portion of your running costs may be deductible under the ATO's fixed rate method - ask us about the current rate and what records you need.
GST and BAS, without the headaches.
Most electrical work is a taxable supply, so once you're registered you charge GST on labour and materials and claim GST credits on what you buy to do the job, from cable and switchboards to test equipment. Materials you mark up still carry GST on the full sale price to the client, not just your margin.
If you're below the GST registration turnover threshold you don't have to register, but a lot of growing electrical businesses register early anyway because they're claiming GST on vans, tools and materials from day one. Ask us where you sit and whether early registration makes sense for your numbers.
If you pay subcontractors or other sparkies to help on jobs, you may need to lodge a Taxable Payments Annual Report each year. We prepare this straight from your Xero data so it's one less thing to remember every August.
Sole trader, company or trust?
Most electricians start out as sole traders, which is simple and cheap while you're building a client base and working mostly on your own tools. As you take on apprentices or employees, start carrying more stock and equipment, or want a cleaner split between business risk and personal assets, moving to a company (sometimes with a trust above it) becomes worth the extra admin. There's no single right answer - it comes down to your income level, growth plans and appetite for the accounting cost of running a company, and it's worth reviewing every couple of years as your business changes.
Run the jobs, we run the numbers.
Job management apps like ServiceM8, Tradify or NextMinute handle your quoting, scheduling and invoicing on the phone, and connect straight into Xero so every job's revenue and cost lands in the right place without double entry. We set the integration up properly the first time, then keep your Xero file current behind the scenes so you can see what each job actually made, not just what's sitting in the bank.
Frequently asked questions.
Can I claim my ute or work van?
Generally yes, for the business-use portion. If it's genuinely set up as a work vehicle with racking and stock, and you keep a logbook or use the cents-per-kilometre method properly, most of the running costs including fuel, servicing and insurance are deductible. We can help you work out which method suits your situation better.
Can I claim my work boots and clothing?
Protective footwear, insulated gloves and clothing that's occupation-specific or clearly branded with your business logo are generally deductible. Plain shirts, jeans or jumpers aren't claimable just because you wear them to work, even if you keep a separate 'work' set at home.
Should I be a sole trader or set up a company?
It depends on your income, how much you're carrying in tools and vehicles, and whether you're taking on staff. Sole trader is simplest early on; a company structure often earns its keep once you're employing people or want a firmer line between business and personal risk. Happy to run the numbers with you either way.
Do I need to register for GST as an electrician?
You're required to once your turnover crosses the GST registration threshold, but plenty of electricians register earlier so they can claim GST credits on vans, tools and testing equipment from the outset. We'll tell you where you actually sit.
What records do I need to keep for tools and equipment?
Keep the receipt or invoice, note what the item was used for, and hang onto it for the period the ATO requires. Photos of receipts straight into an app like Dext at the time of purchase beats a shoebox of paper every time, and it's what most of our trade clients do now.
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