Starting a business is exciting, but it can also be expensive. The good news? Many start-up costs are tax deductible in Australia. Knowing what you can claim helps you reduce your taxable income and free up cash flow—critical for any new business.
At St George TaxCare, we specialise in helping start-ups and small businesses structure their finances, stay compliant with the ATO, and maximise deductions.
Claiming Professional and Business Set-Up Costs
The ATO allows new businesses to immediately deduct certain costs, including:
- Accounting and legal fees
- ASIC registration costs
- Business structure advice
These deductions were made more generous after July 2015, so you don’t always need to spread them over five years.
Business Premises and Home Office Deductions
If you rent an office or shop, rent is deductible. For home-based businesses, you may be able to claim:
- Internet and phone expenses
- Utilities (electricity, gas)
- In some cases, part of occupancy costs
Equipment, Tools, and Software
Start-ups usually invest in equipment early on. Thanks to the ATO’s instant asset write-off rules, eligible assets can be fully deducted in the year they are first used or installed ready for use—rather than depreciated over time.
For the 2025–26 income year, the instant asset write-off threshold is $20,000 per asset for small businesses with aggregated turnover under $10 million.
Marketing and Branding
Promoting your new business is essential—and generally deductible. This includes:
- Website development and hosting
- Business cards and signage
- Online advertising (Google Ads, Facebook)
Staff, Contractors, and Training
If you hire employees or engage contractors, you can claim deductions for their:
- Wages
- Superannuation contributions
- Staff training and development
Important clarification: The PAYG withholding amounts you remit to the ATO are not themselves deductions (because they are amounts withheld from employee wages). But mentioning PAYG is useful to remind you of the compliance obligations associated with having employees.
Insurance and Protection
Business insurance is a deductible expense, including:
- Public liability insurance
- Professional indemnity insurance
- Workers’ compensation insurance
Travel and Vehicle Expenses
Business-related travel is deductible, such as:
- Airfares and accommodation (for work trips)
- Vehicle expenses (logbook method or cents-per-km method)
- Rideshare, taxi, or public transport fares
Don’t Miss Out on R&D Incentives
If your start-up is creating something innovative, the R&D Tax Incentive may provide additional tax offsets and help boost cash flow.
Final Word
Claiming the right deductions can make a big difference in a start-up’s first years—but the rules can be complex, and every business is unique.
At St George TaxCare, we help new businesses in Sydney and across Australia identify all possible deductions while staying compliant with ATO obligations. Contact us today for advice tailored to your start-up.
