Tradies' Tax Deductions in NZ (2026): The Full List

If you're a NZ tradie, sparky, plumber, builder, painter, mechanic, and you're self-employed or contracting, the difference between filing your IR3 carefully and chucking it together can be $5,000+ a year in tax.

Here's the full list of what's claimable in 2026.

Vehicle (the big one)

If you use a vehicle for work, you can claim it two ways:

Option 1: Logbook method

Track every trip for 90 consecutive days with a logbook (paper or app). Calculate your business-use %, say 70%. That % of all vehicle costs becomes deductible:

• Fuel
• WoF, rego, insurance
• Repairs and servicing
• Tyres
• Depreciation (~25% of vehicle value per year using IRD's diminishing-value method)

The 90-day log is valid for 3 years unless your usage pattern changes.

Option 2: Kilometre rate

If you don't want to track depreciation, use IRD's per-km rate:

• Tier 1 (first 14,000 km/year): $1.04/km.
• Tier 2 (over 14,000 km): $0.35-0.41/km depending on vehicle type.

A tradie doing 30,000 work km/year: 14,000 × $1.04 + 16,000 × $0.41 = $21,120 deductible.

The km rate INCLUDES depreciation, fuel, repairs etc, you can't double-claim.

Tools and equipment

Any tool used wholly for income-earning:

• Under $1,000 each: fully deductible in the year of purchase.
• Over $1,000: depreciate over its useful life (typically 5-15 years, using IRD's published rates).

This includes power tools, ladders, safety gear, work-specific phones, laptops with business use, tool storage, etc.

Workwear and PPE

• High-vis, steel-cap boots, hard hats: Fully deductible.
• Branded uniforms with your business name: Fully deductible.
• Generic clothing (jeans, t-shirts) worn to work: NOT deductible, even if you bought them for the job.

Phone and internet

If you use your phone for business (most tradies do), claim the business-use %:

• 80% business use × $90/month plan × 12 = $864/year deductible.

Same for internet if you do quotes / invoicing / scheduling from home.

Training and qualifications

• Refreshing existing qualifications (e.g., gas-fitter renewal): Deductible.
• New unrelated qualifications (e.g., a sparky training as a plumber): Generally NOT deductible.

Subcontractor costs

If you hire a labourer, second tradie, or apprentice, their pay is a deduction. Make sure you've got proper paperwork (invoice if they're a contractor, withholding tax if applicable).

Home office (for admin)

Even if you work on-site all day, the bit of the house you do quotes / invoicing / paperwork in counts. See the working-from-home guide for the calculation.

Accountant fees

If you pay an accountant to do your IR3 or GST returns, their fee is fully deductible.

What's NOT deductible

• Meals on the job (unless travelling overnight for work).
• Coffee and snacks during work.
• Speeding or parking fines.
• Driving from home to your regular workplace (commuting).
• Personal-use portion of any shared cost.

GST: separate beast

If your turnover exceeds $60k/year, you must register for GST. GST is separate from income tax and gives you back the 15% on every business purchase.

For most NZ tradies above $60k, registering for GST is a net positive, the GST you reclaim on your ute, tools and fuel typically exceeds the GST you charge customers (because customers' GST is largely a wash for them anyway).

Can I claim my ute?

The business share of it, yes, and how you prove that share is the whole question.

A logbook run for 90 consecutive days sets a business-use percentage you can apply to fuel, servicing, insurance, rego and depreciation for the next three years. The kilometre rate is the alternative, and it bundles all of those into one per-kilometre figure so there is nothing to depreciate.

Whichever you pick, the trip from home to your usual base is commuting and is not claimable. Home to a job site generally is.

Do I have to register for GST?

Once your turnover passes $60,000 in any twelve-month period, registration is compulsory rather than optional.

Below that you can register voluntarily, and for most tradies it is worth doing. You claim back the GST on the ute, the tools and the fuel, and the GST you add to invoices is recovered by any GST-registered customer anyway.

The trade-off is returns to file, usually two-monthly, and the discipline to keep the GST you collect rather than spend it.

Can I claim my work boots and clothes?

Protective gear and branded uniform, yes. Ordinary clothing, no, however filthy it gets.

Steel-caps, high-vis, hard hats, gloves and wet-weather gear are all deductible because they exist for the job. A shirt with your business name on it is deductible for the same reason.

Jeans and t-shirts are not, even if you only wear them on site and they are ruined by the end of the year. The test is whether the item is ordinary clothing, not whether you would have bought it otherwise.

How much should I put aside for tax?

Around 30% of every invoice, moved out of the account the day it lands.

That covers income tax for most sole traders at trade incomes, with a bit of room. If you are GST-registered, the GST portion is on top and is not yours at all — it is being held on IRD's behalf from the moment the customer pays it.

A separate account makes this survivable. Money you cannot see in your everyday balance is money you do not accidentally spend in a quiet month.

Where Steady fits

Set up Steady categories for fuel, tools, subcontractors, training. At tax time, export the year-to-date spending in each, paste straight into your IR3.

Disclaimer: General education only. Talk to a chartered accountant if your business is complex.