Guide 5 of 5 · All three lanes

Deductions a creator can and cannot claim

For a creator in business, the ATO’s general business rules apply: the expense must be for the business, only the business share counts where there is private use, and there must be records to prove it. For a hobby, the ATO says related expenses are not deductible.

General information about the ATO’s published guidance, not tax advice, and never a view on one person’s situation. The official place to check is the Australian Taxation Office. The ATO’s creator guide points a business creator to its general pages on small business concessions and deductions, and this page follows those.

The ATO’s three golden rules

“The expense must have been for your business, available as an allowable deduction and not for private use.”
“If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.”
“You must have records to prove it.”

Behind them sits the general test: most expenses incurred in carrying on a business can be claimed if they are directly related to earning assessable income.

The makeup example, twice over

The ATO’s creator guide uses makeup to show the line. For a creator in business making makeup tutorials, “Any makeup featured and used only in those tutorials would be deductible. If you used the makeup in both the tutorials and your personal life, you could still claim a deduction for some of the cost of the product.”

Its business deductions page puts a number on it. A makeup artist who teaches and promotes makeup online estimates about half the makeup bought goes to personal use, so can claim a deduction for 50% of the cost. The same reasoning runs through equipment: a laptop used only for the business can have the full cost of a repair claimed, but one used half privately, only 50%.

The split must be fair and reasonable and reflect any private use, and the ATO asks for records showing how it was worked out.

Everyday costs, from the ATO’s lists

A selection from the ATO’s lists, picked for creator work.

Listed as operating expenses

advertising and sponsorship
running a commercial website, such as maintenance and content updates
fees to an internet provider
subscriptions to off-the-shelf software
small-value phone and tablet accessories, like protective covers and earphones
small items costing $100 or less
mobile phone calls, data plans and cloud storage, as business premises expenses
registered tax agent and accountant fees

Listed as not deductible

entertainment, apart from entertainment given as a fringe benefit
traffic fines
private or domestic costs; the ATO’s examples are childcare fees and clothes for your family
costs of earning income that isn’t assessable
GST on a purchase, where it can be claimed back as a GST credit on the activity statement

Where an operating expense is shared with private life, the ATO says only the business portion can be claimed, and gives mobile phone calls as its example. The clothing on its list of employee-style expenses a business owner can claim is described as corporate wardrobes or uniforms, and occupation-specific and protective clothing.

A few more lines from the same pages

Penalties and fines imposed by statutory bodies for breaching an Australian law are not deductible, and the ATO says late payment fees are usually penalties.
Interest charges imposed by the ATO, the general interest charge and the shortfall interest charge, incurred from 1 July 2025 are on the not-deductible list.
Phone and internet costs of setting up and using a Digital ID to reach the ATO’s online services for the business may be deductible for their business portion.
Education and professional qualification expenses, and subscriptions to business or professional journals and information services, are on the ATO’s list of employee-style expenses a business owner can claim.

Cameras, lights and other equipment

When a deduction is claimed depends on the type of expense. The ATO says operating expenses are generally claimed in the year they are incurred, and depreciating assets over a longer period, though a small business entity that chooses the simplified depreciation rules may be able to deduct the business-use share of depreciating assets it acquires straight away.

An expense is generally incurred once there is a legal obligation to pay; an invoice isn’t necessary, but a record of the expense is. An item used in the business for only part of a year generally has its claim limited to that period. And an expense of $1,000 or more paid in advance usually has to be spread over the whole service period if the goods or services won’t be received in full within 12 months and no immediate deduction is available.

Limits, and where the claim goes

If personal services income rules apply, they limit the deductions that can be claimed against that income. A home-based business claiming occupancy expenses generally apportions them by floor area and the time the home is used for the business.

A sole trader claims business deductions in the ‘Business and professional items’ schedule of their individual tax return, through myTax or a registered tax agent. For an activity that earns but is not a business, the ATO’s creator table still allows eligible deductions to be claimed, with records kept. Which lane applies is set out in the hobby or business guide, and products received free in the gifts guide.