Most Australian employees are entitled to a tax refund — but many either overclaim (which can trigger an audit) or underclaim (leaving money on the table). Here are the ten most common mistakes, and what the correct position actually is.
Mistake 1: Claiming Commuting Costs
Travelling from home to your regular workplace is not a work-related deduction. The ATO explicitly excludes ordinary commuting. You can only claim travel between work locations during the day, from home to a client site if you are not required to report to a fixed office, or to carry heavy tools that cannot be stored at work.
Mistake 2: Claiming Expenses Your Employer Already Reimbursed
If your employer reimbursed an expense — wholly or partially — you cannot claim a deduction for the reimbursed portion. Double-claiming (known as 'Double Dipping') is one of the ATO's data-matching focus areas.
Mistake 3: Claiming General Clothing
A suit, business shirt, or standard footwear cannot be claimed even if you only wear it for work. The ATO's rule is clear: clothing must be either a distinctive uniform, occupation-specific workwear (e.g. hi-vis), or protective equipment. 'I only wear it to work' is not sufficient.
Mistake 4: Claiming 100% of Your Phone or Internet Bill
If you use your phone or internet partly for personal use (which almost everyone does), you can only claim the business-use proportion. The ATO expects you to have kept a four-week log or have another reasonable basis for your claimed percentage.
Mistake 5: Claiming Work-from-Home Expenses and Phone/Internet Separately Under the Fixed Rate Method
If you use the ATO's 67 cents per hour fixed rate method for working from home, the rate already includes phone and internet costs. You cannot also claim your phone and internet bill as a separate deduction — it would be double-counting the same expense.
Mistake 6: Claiming Coffee, Lunches and Snacks
Meals and food purchased during a normal working day are not deductible. The exception is overnight travel — if you are away from home for work overnight, meals on that trip are claimable. A daily office lunch is not.
Mistake 7: Claiming Courses That Lead to a New Career
Self-education expenses are only deductible if the course directly maintains or improves skills required in your current job. If you are studying for a career change or a new field, the course costs are not deductible — even if the new career is related.
Mistake 8: Claiming Sunscreen or Sunglasses
These are deductible only if your job requires you to work outdoors in the sun for extended periods (e.g. a construction worker or landscaper). Office workers who occasionally walk outside cannot claim these items.
Mistake 9: Lodging Your Return on 1 July
Many people rush to lodge on 1 July, but employer income statements, bank interest, share dividend reports and health fund data often take until late July to become available in the ATO's systems. Lodging too early risks omitting income the ATO already has data on — resulting in an amendment, delays, and potentially a penalty. Wait until myTax shows your information as 'Tax Ready'.
Mistake 10: Not Reporting Side Income or Platform Earnings
Uber, Airbnb, Airtasker, eBay sales, content creation income, and any other platform-based earnings must be declared. The ATO receives data directly from Australian platforms and is increasingly receiving international platform data. Unreported income — even small amounts — creates risk of penalties of 25–75% on top of the tax owed.
General information only
This article provides general tax information only and does not constitute personal tax, legal, or financial advice. Tax rules can change and individual circumstances vary.
If you would like advice based on your situation, please get in touch with the practice.
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