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).

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.