Published: August 2025

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For small and medium businesses (SMBs) in Australia, maximising tax deductions is crucial to improving cash flow and reducing tax liability. While keeping receipts is ideal for substantiating claims, the Australian Taxation Office (ATO) allows certain deductions without receipts under specific conditions in 2025.

With over 2.5 million small businesses operating in Australia (Australian Bureau of Statistics data), understanding these rules can save time and money. This guide outlines what you can claim on tax without receipts, ATO requirements, practical examples, and tips to ensure compliance.

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Why Receipts Matter for Tax Deductions

Receipts provide evidence of business expenses, ensuring deductions are valid during ATO audits. However, the ATO recognises that small business owners, such as sole traders or freelancers, may lose receipts or incur minor expenses where receipts are impractical. In such cases, specific deductions are allowed without receipts, provided you meet ATO criteria and maintain alternative records, like bank statements or diaries. Failing to comply risks penalties, with ATO audits recovering $1.2 billion in underreported tax from SMBs in 2024.

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ATO Rules for Claiming Without Receipts

The ATO permits deductions without receipts under certain conditions, as outlined at https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/. Key rules include:

• Reasonable Evidence: You must prove the expense was incurred and business-related, using bank statements, credit card records, or a logbook.
• Threshold Limits: Some deductions have caps for claims without receipts (e.g., $300 for work-related expenses).
• Record-Keeping: Maintain a diary or digital records detailing the expense, date, and purpose.
• No Double-Dipping: You cannot claim expenses already reimbursed or claimed elsewhere.

Always check ATO guidelines to ensure compliance, as rules may vary for sole traders, partnerships, or companies.

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What Can You Claim Without Receipts?

Below are common deductions SMBs can claim without receipts in 2025, subject to ATO conditions.

Work-Related Expenses (Up to $300)

Sole traders and employees can claim up to $300 annually for work-related expenses without receipts, covering items like stationery, uniforms, or tools.

• Conditions: Expenses must be directly related to earning income, and you must provide a reasonable explanation (e.g., a diary entry).
• Example: A Sydney freelancer claims $250 for office supplies, supported by bank statements showing payments at Officeworks in July 2025.
• Limit: Claims above $300 require receipts or invoices.

Home Office Expenses

If you work from home, you can claim home office expenses without receipts using the ATO’s fixed-rate method (67 cents per hour in 2025) or actual costs with a diary.

• Fixed-Rate Method: Covers electricity, internet, and depreciation for furniture, requiring a log of hours worked (e.g., 20 hours/week for 48 weeks).
• Example: A Melbourne consultant working 1,000 hours annually claims $670 (1,000 × $0.67) without receipts, logging hours in a spreadsheet.
• Actual Costs: Requires a diary of usage (e.g., 20% of home electricity for business) and utility bills, not receipts.

Refer to https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Home-office-expenses/ for details.

Car Expenses (Cents Per Kilometre Method)

For business-related car use, you can claim up to 5,000 km annually at 85 cents per kilometre (2025 rate) without receipts, using a logbook or reasonable estimate.

• Conditions: Record the purpose and estimated business kilometres. A logbook is recommended for accuracy but not mandatory for this method.
• Example: A Brisbane tradie claims 3,000 km for client visits, deducting $2,550 (3,000 × $0.85), supported by a diary noting trip dates and purposes.
• Limit: Claims above 5,000 km require a detailed logbook with receipts.

See ATO guidance here for more.

Laundry Expenses for Work Uniforms

You can claim up to $150 for laundering work-specific uniforms (e.g., branded clothing) without receipts.

• Conditions: The uniform must be compulsory or occupation-specific, and you must estimate usage (e.g., weekly washes).
• Example: A Perth cafe owner claims $120 for cleaning branded aprons, noting 40 washes annually in a diary.
• Limit: Claims above $150 require receipts or invoices.

Small Expenses Under $10

Individual expenses under $10, up to a total of $200 annually, can be claimed without receipts for miscellaneous business costs, like parking or stationery.

• Conditions: Record the date, amount, and purpose in a diary or app.
• Example: An Adelaide retailer claims $180 for parking fees ($5-$8 per instance) for client meetings, documented in a notebook.

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How to Substantiate Claims Without Receipts

To claim deductions without receipts:

1. Keep a Diary or Logbook: Note the date, amount, supplier, and purpose of each expense. For example, a Canberra freelancer logs a $15 taxi fare for a client meeting on 10 August 2025.
2. Use Bank Statements: Match transactions to expenses, e.g., a $50 payment to a stationery supplier on a credit card statement.
3. Estimate Reasonably: For cents-per-kilometre or home office claims, base estimates on typical usage patterns, like 20 client visits monthly.
4. Use Digital Tools: Apps like MYOB or QuickBooks can track expenses and generate reports, simplifying ATO audits.

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Example Scenarios

• Sole Trader Consultant: A Sydney consultant claims $300 for stationery, $400 for home office (fixed-rate, 600 hours), and $1,700 for car expenses (2,000 km). Total: $2,400, supported by a diary and bank statements.
• Retail Business Owner: A Melbourne retailer claims $150 for uniform laundry and $180 for small parking fees, logging details in an app, totalling $330 without receipts.
• Tradie: A Brisbane electrician claims $2,550 for 3,000 km of business travel and $200 for small tool purchases, using bank statements and a logbook.

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Common Mistakes to Avoid

• Exceeding Limits: Claiming over $300 for work-related expenses or 5,000 km for car use without receipts risks disallowance.
• No Records: Failing to keep a diary or bank statements can lead to rejected claims and penalties up to 75% of underpaid tax.
• Non-Business Expenses: Claiming personal costs, like home internet for non-work use, breaches ATO rules.
• Overestimating Claims: Inflating kilometre or home office hours without reasonable evidence triggers audits.

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Tips for SMBs

• Use the myDeductions Tool: Track expenses via the ATO’s app for easy record-keeping. This can be found here.
• Consult a Bookkeeper: Professional help ensures compliance and maximises deductions, especially for complex claims.
• Review Annually: Check ATO updates for rate changes (e.g., cents-per-kilometre) at https://www.ato.gov.au/Business/Income-and-deductions-for-business/.
• Separate Finances: Use a business bank account to simplify tracking deductible expenses.

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Q&A

Can I claim tax deductions without any records?

No, you need alternative records like a diary or bank statements to substantiate claims without receipts, per ATO rules.

What is the maximum I can claim for work-related expenses without receipts?

Up to $300 annually for expenses like stationery or tools, provided you can explain the expense reasonably.

Can I claim home office expenses without receipts?

Yes, using the fixed-rate method (67 cents per hour in 2025) with a log of hours worked, or actual costs with a diary.

Are car expenses claimable without a logbook?

Yes, up to 5,000 km at 85 cents per kilometre in 2025, with a reasonable estimate or diary of trips.

What happens if the ATO audits my claims without receipts?

You must provide alternative evidence (e.g., diary, bank statements). Without it, claims may be disallowed, and penalties may apply.

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Sydney Bookkeeper Services

For Australian small and medium businesses aiming to maximise tax deductions without receipts, Sydney Bookkeeper offers expert services at https://www.sydneybookkeeper.com. We provide tailored bookkeeping solutions, including expense tracking, BAS preparation, and audit-ready record-keeping.