With tax time approaching, many Australians are taking a closer look at their expenses to maximise their returns. One unexpected item that could be tax deductible? Your work bag.
The Australian Taxation Office (ATO) allows individuals to claim a deduction for bags used primarily for work purposes. That includes handbags, laptop bags, satchels, and briefcases—provided they’re used to carry work-related items such as laptops, tablets, paperwork, or diaries.
However, strict criteria apply. To be eligible:
- The bag must be suitable for carrying work equipment.
- It must be used mainly for work, not personal errands.
- You’ll need to keep proof of purchase (like a receipt).
- If the bag has both personal and work use, you’ll have to apportion the deduction accordingly.
What About Expensive or Designer Bags?
If the bag costs less than $300, it’s generally considered an immediate deduction and can be claimed in full in the year it was purchased—assuming it’s used solely for work.
If it costs over $300, the rules change. The item must be depreciated over its useful life, meaning you can only claim part of the expense each year.
For example, if you buy a $500 bag primarily for work, you can only claim the work-use percentage, and you must spread that amount over several years through depreciation.
Tax professionals often caution against claiming high-end luxury bags unless you can clearly demonstrate that the bag is used exclusively for work purposes. If there’s significant personal use, your deduction must be reduced proportionally.
Note: Bags used mainly for private use (like carrying lunch or personal items) or provided by your employer cannot be claimed.
What Else Can You Claim Before 30 June?
If you’re looking to boost your return, consider bringing forward eligible work-related purchases before the end of financial year. Some examples include:
- Desks, chairs or monitors for a home office
- Subscriptions or memberships related to your profession
- Work-related technology like mobile phones or headphones
- A tax agent’s fee (as long as it’s paid before 30 June)
- Costs for managing an investment property, such as a depreciation schedule
Let’s say you prepay $2,000 in work-related expenses and your marginal tax rate is 32.5%. That could return an extra $650 in your tax refund.
Final Tips
To claim any deduction:
- Keep clear records (receipts, proof of payment, usage logs)
- Understand whether you need to apportion for personal use
- Check the ATO’s latest guidance or speak to a registered tax agent
By planning your purchases wisely and understanding what you can legitimately claim, you’ll be in a stronger position to maximise your return this tax season—bag included.
