QLDVICSATASNTACT
Building
Certificate IV in Building and Construction
CPC40120 - CPC40120 - Your pathway to becoming a licensed low-rise builder. Nationally recognised qualification for builders, site supervisors, and construction managers.
EOFY 2025-26 GUIDE
Tradie Tax Deductions at EOFY 2025-26
Can you claim your Cert IV or building course on tax? Here is the honest answer most guides dodge, plus everything else a tradie can claim before 30 June.
Last updated
General information only
This article explains how the ATO's rules generally apply for the 2025-26 financial year (ending 30 June 2026). It is not personal tax advice. Whether a course or expense is deductible for you depends on your situation. Always check the current rules at ato.gov.au or speak to a registered tax agent before you lodge or buy. Prepare Training (RTO 45384) is a registered training organisation, not a tax agent.
The Core Test
Can you claim your course or qualification on tax?
The honest answer is not yes and not no. It comes down to one question.
The single question that decides everything is this: what income-earning activity are you paid for right now? That is the test every competitor guide fudges. Your self-education is deductible when the course has a sufficient connection to your current income-earning activity. The ATO frames it in two limbs, and you only need to satisfy one of them.
The first limb is the obvious one. The second is the one most guides miss. According to the ATO, self-education connects to your income where it “maintains or improves the specific skills or knowledge you require for your current employment activities,” or where it “results in, or is likely to result in, an increase in your income from your current employment.” You do not have to be merely topping up existing skills. A course likely to lift your pay in your current role qualifies too.
The two-limb connection test (satisfy either one)
| Limb | What it asks | Plain-English example |
|---|---|---|
| Maintain or improve | Does the study build on skills you already use in the job you are paid for now? | A leading hand studying construction skills he already applies on site |
| Likely to increase income | Is the study likely to lift your pay in your current role? | A site-based worker whose award rate rises once the qualification is gained |
If you can answer yes to either limb honestly, there is a real case to claim. If the study is to enter a job you do not yet do, there is not. Hold that distinction in your head, because the next section is where most tradies trip up.
💡
Worth knowing
The ATO even has a claim-type code for the second limb. When an employee lodges a self-education claim, code K covers study that maintains or improves a skill, and code I covers study likely to increase income from the current role. The second one exists for exactly this reason, so do not assume you can only claim “refresher” courses.
The Honest Nuance
The carpenter-to-builder question
Upskilling versus a new career, and why same-industry does not save you.
Here is the boundary nobody else explains properly. The ATO will not allow a deduction where study is designed to get new employment, obtain a new profession, or open up a new income-earning activity you are not yet engaged in. The important part: even if it is in the same industry.
The ATO's own ruling makes this concrete with a doctor. A practising GP who studies dermatology to set herself up as a specialist gets no deduction, because the study opens a new income-earning activity she is not yet doing. Same broad field of medicine. Still not deductible. The expense was incurred “at a point too soon.”
That maps directly onto a tools-down employee carpenter studying a Certificate IV purely to become a licensed builder. A builder's licence genuinely lets you earn in a way an unlicensed carpenter legally cannot. Every state regulator we checked confirms you must hold a builder or contractor licence to lawfully contract for builder-scope building work. So studying purely to enter that licensed activity leans non-deductible, the same way the GP's dermatology study does.
You are already doing supervision, estimating or leading-hand work as part of your current paid role, and the Certificate IV improves that work or is likely to lift your pay in it. Or you are a contractor already running a building business who upskills within it.
The study connects to the income-earning activity you are paid for today, so it satisfies a limb of the test.
⚠️
The two caveats this whole section rests on
First, a Certificate IV (CPC40120) is one component of a builder's licence, never the licence itself. Every state also wants supervised experience, often two to four years, plus financial capacity for a contractor licence. Second, builder licensing is state-administered, so the exact rules differ by state. If you are weighing whether your course is deductible, the application to your facts is genuinely fact-dependent. Always route it to a registered tax agent and check your own state regulator.
The decisive variable is the income-earning activity you are paid for today, not the industry you are in, and what your state lets you lawfully do. If you are still working out the licence pathway itself, our guide on how to become a builder in Australia walks through the qualification and experience steps by state.
Outdated Advice
The $250 myth is dead
One of the most common pieces of stale tax advice tradies still get told.
For years there was a rule that the first $250 of self-education was not deductible. That rule is gone. Section 82A of the ITAA 1936 was repealed effective 1 July 2022, which means that where your self-education is deductible, you claim it from the first dollar.
This is the one point in the whole topic backed by two genuinely independent sources: the ATO's own guidance and the Explanatory Memorandum that repealed the section in Parliament. If an EOFY article is still telling you to knock $250 off your course cost before you claim, it is working from rules that expired years ago.
What this means in practice
There is no $250 haircut anymore. If a course clears the connection test in section one, the full deductible amount counts. The old subtraction is simply not part of the calculation for the 2025-26 year.
How You Lodge
Employee vs sole trader: how each one claims
Same eligibility test, two different mechanics on the return.
The connection test is the same whether you are on the tools for a wage or running your own ABN. What changes is where and how the deduction goes on your return.
Where the deduction lands
| Employee | Sole trader (ABN) | |
|---|---|---|
| Where it goes | Label D4 on the individual tax return | General business deduction in the business schedule (under section 8-1) |
| Core test | Connected to current employment | Connected to the business already being carried on |
| Key catch | Must already be earning income from the relevant activity | Must already be trading, not studying to start the business |
| Effect | Reduces taxable income | Reduces business net income, and can affect PAYG instalments |
The catch is the same in spirit for both. An employee who is not yet earning from the relevant activity, and a sole trader who is not yet trading the business the study supports, both run into the “point too soon” problem. The label differs, the underlying logic does not.
Real Maths
What is it actually worth?
A deduction is not a refund of the full course cost. Here is how to think about it.
A tax deduction reduces your taxable income, not your tax bill dollar for dollar. The rough rule of thumb is simple: a deductible course saves you about the course fee multiplied by your marginal tax rate, including the 2% Medicare levy.
As an illustration only, take a deductible course in the order of three thousand dollars. For someone in the middle income bracket, that lands somewhere around a thousand dollars off their tax once Medicare is counted, so the course effectively costs roughly two-thirds of the sticker price. For someone in the top bracket the saving is larger again. These are ballpark figures to show the mechanism. Your actual saving depends on your taxable income, so treat any number here as approximate.
⚠️
Do not read a guaranteed number off this
Course-fee deductibility is fact-specific. We are explaining how the saving is calculated, not telling you your course is deductible or that you will get a particular amount back. Confirm both the deductibility and the figure with a registered tax agent before you rely on it.
EOFY Timing
Why timing matters: pay before 30 June
The genuine reason to act before the financial year closes.
The real EOFY urgency is not some vanishing threshold. It is the calendar. To claim a deduction in this year's return, you generally need to have paid the expense by 30 June. Pay in July and the same deduction simply falls into next year's return.
On or before 30 June 2026
Pay this financial year
A deductible expense paid by 30 June can be claimed in your 2025-26 return. If a course connects to the work you are paid for now, paying before the cut-off is what lands the deduction this year.
From 1 July 2026
It rolls to next year
The same payment made in July counts toward the 2026-27 return instead. Nothing is lost, but the timing of the benefit shifts a full year.
💡
One myth to drop
You may have heard the instant asset write-off was about to fall to $1,000, used as an instant-write-off scare. That is no longer accurate. The 2026-27 Federal Budget announced the small-business instant asset write-off would be made permanent at its current level from 1 July 2026 (announced, pending legislation). So the honest EOFY hook is timing, not a threshold about to disappear.
The Full List
Everything else a tradie can claim in 2025-26
Beyond course fees, the work-related deductions most tradies are entitled to.
Course fees are the headline, but they are far from the whole story. The deductions below are standard ATO positions for tradies for the 2025-26 year. We have kept the dollar figures in the text deliberately, because each one has conditions, and the safest move is always to confirm the current rate on the ATO site or with your tax agent at lodgement.
The everyday tradie deduction set
1
▼
Tools and equipment
An employee can immediately deduct a tool costing $300 or less. Anything over $300 is depreciated over its effective life. Sole traders and small businesses also have the instant asset write-off for eligible assets, which sits in the order of $20,000 per asset for 2025-26 (turnover-dependent). The write-off is a business concession, not something an employee on a wage can use.
2
▼
Vehicle and travel
Two methods. The cents-per-kilometre method runs at 88 cents per kilometre for 2025-26, capped at 5,000 business kilometres per car. The logbook method is the alternative when your business use is higher. You cannot claim normal home-to-work travel, and a ute used partly privately must be apportioned.
3
▼
PPE and sun protection
Protective items genuinely required for your work are deductible, including sunscreen, sunglasses and hats where your job exposes you to the sun, plus hi-vis and steel-cap boots. Ordinary clothing is not claimable just because you wear it to work.
4
▼
Phone and internet
You can claim the work-related portion of your phone and internet, apportioned to genuine work use. Keep a representative record of the split rather than claiming the full bill.
5
▼
Union and association fees
Fees for a union or a relevant trade or professional association connected to earning your income are generally deductible.
6
Home-office running costs
If you do work admin from home, the fixed-rate method runs at 70 cents per hour for 2025-26 and bundles phone, internet, electricity and the like. A key trap: do not use the 70-cent rate and then also claim phone and internet separately, because the rate already includes them.
⚠️
Records are not optional
Once your total work-related claims pass $300, you need written evidence to back them. Keep receipts, a vehicle logbook where you use one, and a contemporaneous record of home-office hours. The ATO expects records kept for five years after you lodge.
If a building qualification fits the work you are already paid for, it can sit alongside these everyday deductions. Our Certificate IV in Building and Construction and Diploma of Building and Construction are the two pathway qualifications most tradies ask about at this time of year.
RPL and Qualifications
Can you claim RPL fees?
Recognition of Prior Learning follows the same logic as a course.
Recognition of Prior Learning is an assessment of skills you already have against a formal qualification. Because it is, in substance, a course or assessment fee, it follows the same self-education test. RPL fees lean deductible where the qualification connects to the work you are already paid for, and lean non-deductible where it qualifies you for a new activity you do not yet do.
One honesty point: there is no specific ATO ruling on RPL fees. This follows the general self-education rules by reasoning, not a dedicated carve-out, so it sits a notch below the other points in this guide for certainty. If RPL is your fast track, our RPL for building and construction guide explains how the evidence process works, and a tax agent can confirm the deductibility for your circumstances.
FAQ
Frequently Asked Questions
The questions tradies ask most about claiming study and expenses at tax time.
Before you lodge or buy
Everyone's tax situation is different, and the carpenter-to-builder line in particular is fact-specific. This is general information for the 2025-26 year, not personal advice. Confirm anything you plan to claim with a registered tax agent or at ato.gov.au before you act. Prepare Training (RTO 45384) is a registered training organisation, not a tax agent or financial adviser.
Relevant Qualifications
Courses for This Pathway
These nationally recognised qualifications meet the licensing requirements discussed in this guide.
QLDVICSATASNTACT
Building
Diploma of Building and Construction
CPC50220 - CPC50220 - Your pathway to a medium-rise builder's licence. Nationally recognised qualification for builders, site managers, and construction professionals across QLD, VIC, SA, TAS, NT, and ACT.
More Licensing Guides
Explore Other States
Each state has unique builder licensing requirements. Explore our other guides to compare.
Career Advice11 Mar 2026
How to Become a Builder in Australia
The definitive guide to becoming a licensed builder in Australia — qualifications from Cert IV to Advanced Diploma, state-by-state licensing requirements for all 8 states and territories, experience needs, costs, timelines, and salary expectations.
Read Article
RPL & Qualifications26 Feb 2026
RPL for Building & Construction
The complete 2026 guide to Recognition of Prior Learning for construction professionals — step-by-step process, evidence requirements, costs from $500, 4-8 week timeframes, all 8 states accept RPL qualifications, and why 770,000 construction workers could benefit from RPL.
Read Article
Career Advice11 Mar 2026
How to Start a Tradie Business
Everything you need to start a tradie business in Australia — from ABN registration and insurance to pricing strategies, finding clients, and growing from sole operator to building company. Construction-specific regulatory expertise from RTO 45384.
Read Article
QLD
Licensing28 Feb 2026
QBCC Builder Licence Guide 2026
Three licence classes, three qualifications, one clear pathway. Low Rise, Medium Rise, and Open builder licences explained — qualifications, fees, experience, financial requirements, and the step-by-step application process.
Read ArticleGET IN TOUCH
Thinking about a building qualification this EOFY?
Speak to an advisor about whether a Certificate IV, Diploma or RPL pathway fits where you are now. We will give you honest advice about the right qualification, and you can confirm the tax side with your registered tax agent.