Tax deductions are once again a key focus for Australians as tax time rolls around. The Australian Taxation Office (ATO) recently revealed that the average amount claimed by individuals in the 2022-23 tax year was $3,518. This figure marks a significant increase compared to previous years, highlighting the growing importance of understanding what can and can’t be claimed on tax returns.
With over 16 million individual tax returns filed, the ATO’s latest data provides insights into the most common deductions claimed, from work-related expenses to charitable donations. These deductions are essential for reducing the tax burden for many Australians, and knowing what qualifies can make a big difference in maximizing tax returns.
Work-related expenses lead the way
The most significant category of deductions for the 2022-23 tax year was work-related expenses, with Australians claiming an average of $2,639 in these deductions. This figure marks the highest average claimed in at least a decade, signaling a growing trend. Notably, these claims have increased since the pandemic, with more people working from home and claiming related expenses such as office supplies, internet usage, and electricity costs.
According to the ATO, more than 10.3 million people included work-related deductions in their returns. However, the ATO has stressed the importance of ensuring that all claims are directly related to income-earning activities. Taxpayers are advised to keep records like receipts and invoices to substantiate their claims, as the tax office is expected to scrutinize these expenses more closely this year.
Significant Superannuation Deductions
Personal superannuation contributions emerged as another key area of focus, with 679,004 taxpayers claiming an average deduction of $17,380. This figure represents the largest deduction claimed in the 2022-23 financial year and highlights the growing importance of retirement savings among Australians. The ability to claim such contributions provides a tax benefit for individuals who wish to bolster their super funds, which is increasingly seen as a valuable way to plan for retirement.
This deduction also aligns with broader financial goals for many Australians, as superannuation offers tax advantages while encouraging long-term savings.
ATO tax deductions worth $3,518 that millions of Aussies are claiming https://t.co/r2dPOHsXlY
— Yahoo Finance Australia (@YahooFinanceAU) July 1, 2025
Charitable Donations See a Rise
Australians have shown increasing generosity, with charitable donations rising significantly in 2022-23. More than 4.4 million people claimed an average of $2,032 in donations, nearly double the amount claimed in the previous year. This increase in charitable giving reflects not only a change in taxpayer behavior, but also a broader trend of increasing social responsibility. Donations to registered charities are eligible for tax deductions, providing both financial relief for those who give and benefits to the causes they support.
The tax office has noted this uptick and encourages taxpayers to ensure their donations are to registered charities, as only such donations are eligible for tax deductions.
Removal of Deductions for ATO Interest Charges
A notable change for this year is the removal of deductions for interest charged by the ATO on late payments or underpayments. Starting on July 1, interest charged for such late payments will no longer be deductible. This change is part of the ATO’s efforts to encourage timely tax payments and ensure fairness among taxpayers.
This update aims to penalize those who delay their tax payments while ensuring that individuals who comply with deadlines are not disadvantaged. The ATO has indicated that this change will be closely monitored in future tax returns.
