A deduction is only as good as the proof behind it. Australia runs on self-assessment, which sounds generous until you remember the other half: the ATO can review what you claimed, and if you cannot back it up, the claim comes off. No record, no deduction. Good records are what keep your return standing.
The headline rule is short. Keep your records for 5 years from the date you lodge your tax return. A few things run longer, and we get to those, but 5 years from lodging is the number to hold onto.
The three golden rules
Before any record question, an expense has to clear three tests to be deductible at all.
Figure 1. The three tests an expense has to pass.
You spent the money yourself and were not paid back. The expense relates to earning your income. And you have a record to prove it. Miss any one and the deduction does not stand. The third test is where most people come unstuck, not because they did not spend the money, but because they cannot show they did.
The $300 rule everyone gets wrong
There is a stubborn myth that you can claim $300 of work expenses with no proof. You cannot.
Figure 2. What the $300 threshold actually means.
If your total work-related expenses come to $300 or less, you do not need receipts, but you still have to have spent the money and be able to explain how you reached the figure. The ATO can ask. Once your total goes over $300, you need written evidence for the whole claim, not just the part above $300.
Car expenses, laundry, overtime meal allowances, award transport payments and travel allowances sit outside that $300 and follow their own rules. So the $300 is a receipts threshold for the general pile, not a free pass.
What actually counts as a record
A receipt or invoice is the gold standard. It shows what you bought, when, from whom, and for how much. A bank or credit card statement on its own does not cut it, because it shows the amount but not what the money was for. Keep the receipt.
You do not need shoeboxes of paper. The ATO accepts digital records, including photos of your receipts, as long as the copy is clear and true to the original. Records for expenses incurred in Australia need to be in English. Snap the receipt the day you get it and the year-end scramble disappears.
For small expenses of $10 or less, up to $200 in total for the year, a diary note or a note on your phone is enough where a receipt is hard to come by. Tolls and parking where no receipt is given fall in here too.
The records that outlive the 5 years
Some records you keep well past the 5-year mark, and property is the big one.
Record | How long to keep it |
General income and deduction records | 5 years from the date you lodge |
Work-related expense receipts | 5 years from the date you lodge |
CGT asset records (e.g. property) | While you own it, then 5 years after you sell |
Depreciating asset records | While you claim, then 5 years after the last claim |
Carried-forward loss records | Until 5 years after the loss is fully used |
Records caught up in a dispute | Until the dispute is resolved |
Table 1. How long to keep what. The first two cover most people; the amber rows run longer.
For a capital gains tax asset, you keep the records for as long as you own it, then another 5 years after you sell. A property bought in 2012 and sold in 2030 means records held until 2035. That is the cost base: the contract, the stamp duty, every capital improvement with its invoice. It is exactly the trail that decides the gain when you finally sell, which is why the rental records we go through in what is negative gearing are worth keeping the long way.
Depreciating assets work the same: keep the records while you claim the decline in value, then 5 years after the last claim. Carry a tax loss forward and you keep the records that worked it out until 5 years after the year you finally use it. A dispute with the ATO pauses the clock, so hold everything until it is resolved.
A quick rundown by situation
If you are an employee, that is your income statement plus the receipts behind your work deductions. If you rent out a property, it is the purchase and sale contracts, loan statements, and every income and expense record, kept the long way because of CGT. If you run a business or work for yourself, it is the lot: sales, purchases, payroll, and your BAS and GST records. Those BAS records are the same ones that back up what you report each quarter, which we cover in what is a BAS.
Make it easy on yourself
The people who never sweat at tax time are the ones who file as they go, not the ones hunting for paper in October. Photograph receipts on the spot. Keep one folder per year. Let your accounting software hold the income and expense trail so the numbers are already sorted when the return is due. HPLedger handles the record-keeping side for small business, and Tax Assistant checks the position against current rules before anything is lodged.
The short version
Keep your records 5 years from when you lodge. Anything tied to a property or other CGT asset, keep for as long as you own it plus 5 years after you sell. There is no automatic $300 deduction: under $300 you can skip receipts but still need to have spent the money, over $300 you need written evidence for the whole claim. Digital is fine, a bank statement alone is not, and the receipt you keep today is the deduction you keep later.
References and key provisions
Current to June 2026. Record-keeping for individuals is governed by the Income Tax Assessment Act 1997 (Cth) and the Taxation Administration Act 1953 (Cth).
– General retention: keep records 5 years from the date you lodge your tax return (ATO, Records you need to keep).
– Substantiation of work-related deductions: Division 900 ITAA 1997. Written evidence required where total work expense claims exceed $300; the $300 excludes car, laundry, overtime meal allowance, award transport payments and travel allowance.
– Laundry: claims up to $150 without written evidence ($1 per load of own work clothing, 50 cents per mixed load); the $150 sits within the $300, it does not add to it.
– Small expenses $10 or less, up to $200 total for the year: a record such as a diary note is accepted where a receipt is hard to obtain.
– Car expenses: logbook method needs a 12-week continuous logbook, valid up to 5 income years; cents per km is capped at 5,000 km per car.
– CGT assets: keep records for the period of ownership plus 5 years after the CGT event (sale or disposal).
– Depreciating assets: keep records for the period of claim plus 5 years from the last claim for decline in value.
– Format: paper or electronic both accepted, including clear photos of written evidence; records for expenses incurred in Australia must be in English; a bank or credit card statement on its own is not sufficient.
– ATO guidance: Records you need to keep; Documents to support and verify your claims; Records to keep longer than five years (ato.gov.au).
Frequently asked questions
How long do I have to keep tax records?
5 years from the date you lodge the return they relate to. Some records have to be kept longer because they support a later event, such as the cost base of an asset you have not sold yet.
Do I need receipts for claims under $300?
The $300 threshold applies to total work related expenses, not to each item. Under it you still have to be able to show how you worked the claim out. It is not a free deduction.
Does a bank statement count as a record?
On its own, usually not. A statement shows an amount left your account. A record has to show what was bought, from whom, when, and how much of it was for business.
Which records do I keep longer than 5 years?
Anything supporting an asset you still hold. Purchase contracts, improvement invoices and depreciation schedules stay relevant until the asset is sold and the capital gain is worked out.
