Technology plays a central role in today’s business environment. Laptops and mobile phones are essential tools for communication, administration, and day-to-day operations. For small business owners, sole traders, and freelancers, the question often arises: Can these items be claimed as business expenses on your tax return?
The short answer is yes—you can claim a laptop or mobile phone on your business tax if they are used for work-related purposes. However, there are rules and requirements that must be followed to ensure your claim is valid and compliant with the Australian Taxation Office (ATO).
This article explains how and when you can claim these items, what you need to consider, and the documentation required to support your claim.
What Makes a Business Expense Tax-Deductible?
To claim a deduction, an expense must be directly related to earning your business income. According to the ATO, a deductible expense must:
Be used in the course of running your business, and
Not be personal or private in nature.
This means that if you purchase a laptop or mobile phone primarily for business use, you may be eligible to claim part or all of the cost on your tax return.
Claiming a Laptop for Business
A laptop can be claimed as a business expense if it is used to perform work-related tasks such as:
- Managing business emails and communications
- Accessing work-related software or tools
- Preparing reports, invoices, or documents Attending virtual meetings or conducting remote work If the laptop is used only for business, you may be able to claim 100% of the cost. If it is used for both personal and business purposes, you must apportion the expense and claim only the business-use percentage.
**Claiming a Mobile Phone for Business
**
Similarly, a mobile phone is deductible if it is used for business-related functions such as:
- Making or receiving calls with clients, suppliers, or staff
- Managing business accounts and emails
- Using business-related apps (e.g. banking, invoicing, CRM) You can claim the purchase cost of the phone and the ongoing usage fees (calls, data, subscriptions), again based on the percentage of business use.
**Apportioning Business and Personal Use
**
In many cases, laptops and phones are used for both business and personal purposes. In such situations, the ATO requires you to calculate the business-use portion. This is usually done by:
- Keeping a usage log or diary for a representative 4-week period
- Calculating the percentage of time or activity that relates to your business
- Applying this percentage to the total cost or monthly bill For example, if 60% of your phone calls and data usage are business-related, you may claim 60% of your phone costs.
**How to Claim the Expense: Full Deduction or Depreciation
**
There are two main ways to claim the cost of a laptop or phone:
**1. Immediate Deduction (Full Write-Off)
**If the item costs below the ATO’s threshold (subject to current rules) and your business is eligible, you may be able to claim the entire cost in the year of purchase. This is often referred to as the instant asset write-off or temporary full expensing, depending on the current legislation.
**2. Depreciation (Over Time)
**If the cost is higher or you are not eligible for full expensing, the device must be depreciated over its effective life (usually 2–5 years). You would then claim a portion of the cost each financial year.
Your accountant can advise which method applies to your business and provide the correct calculation.
**Ongoing Costs You Can Claim
**
In addition to the purchase of the device, you may also claim ongoing costs related to:
- Monthly phone plans or bills
- Data and internet charges (used for business)
- Subscriptions to business-related apps or software As with the device itself, you can only claim the business-use portion of these expenses.
**Records You Must Keep
**
To ensure your claims are accepted and compliant, you must maintain accurate records, including:
- Tax invoices or receipts for purchases
- Monthly phone or internet bills
- A usage log or diary showing how the device is used for business
- Details of how you calculated the business-use percentage These records must be kept for at least five years, as required by the ATO.
**Claiming an Existing Device
**
If you already own a laptop or phone and start using it for business, you may still be able to claim a deduction. In this case, you would:
- Determine the market value of the device at the time it started being used for business
- Apply the business-use percentage to that value
- Claim depreciation based on the remaining effective life This ensures your claim reflects actual business use rather than the original purchase.
**Important Considerations
**
- Do not claim 100% of an item unless it is used entirely for business
- Make sure claims are reasonable and accurately supported
- Avoid claiming personal expenses as business deductions—this can result in penalties
- Keep clear and complete documentation for all claims
**Professional Support and Advice
**
While it is possible to manage tax claims on your own, many small businesses benefit from professional assistance. Engaging a qualified accountant ensures your claims are accurate, your records are compliant, and you receive the maximum allowable deductions under current tax laws.
For example, HelloLedger specializes in small business tax and accounting services. They provide tailored advice and transparent pricing to help you navigate business expenses confidently, including laptops, phones, and other essential tools.
**Conclusion
**
Yes, you can claim a laptop or mobile phone on your business tax if they are used for business-related activities. However, it’s important to calculate the business-use portion accurately, keep proper records, and follow ATO guidelines.
Understanding these rules ensures you stay compliant, avoid errors, and make the most of available tax deductions to support the growth and efficiency of your business.
If you're uncertain about how to apply these rules to your situation, consulting a trusted accountant or specialist firm like HelloLedger can give you peace of mind and help you claim correctly.
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