Who This Guide Is For
This guide is for anyone in Australia who uses their personal mobile phone for work purposes and wants to claim a tax deduction. Whether you're an employee required to take work calls on your personal number, a sole trader running your business from your phone, or a freelancer who uses data for client work — if your employer doesn't fully reimburse your phone costs and you use your personal device for work, this guide explains exactly what you can claim, how to calculate it, and what records the ATO requires. (ATO guidelines)
The FY2025-26 rules remain consistent with previous years: you can claim the work-related portion of your phone expenses. The key is being able to demonstrate a reasonable basis for your work-use percentage.
What You Can Claim on Your Mobile Phone
The Australian Taxation Office allows you to claim the work-related portion of your mobile phone expenses. This includes both the device itself and the ongoing service costs.
1. Phone Handset (Device Cost)
If you purchased your mobile phone and use it for work, you can claim a deduction for the work-related portion of the device's decline in value (depreciation).
For phones costing $300 or less, you can claim an immediate deduction for the work-use percentage in the year you buy it.
ATO Rule: Assets costing $300 or less can be immediately deducted in full for the work-related portion. This applies per item, not per invoice — meaning each individual phone qualifies separately.
For phones costing more than $300, you must depreciate the device over its effective life (typically 2 years for a smartphone). The ATO's effective life for mobile phones is 2 years, meaning you claim the work-use percentage of the decline in value each year.
Example: You buy a new iPhone for $1,200 on 1 July 2025. You use it 60% for work. Your annual deduction:
- Annual depreciation: $1,200 ÷ 2 years = $600
- Work-related portion: $600 × 60% = $360 per year
2. Monthly Plan / Service Fees
Your recurring phone bill — whether a postpaid plan or prepaid recharge — is the most common phone deduction. You claim the work-related percentage of your total annual plan costs.
Example: Your plan costs $59/month. You estimate 50% work use over 11 months (you weren't working in July):
- Total plan cost: $59 × 11 = $649
- Work-related deduction: $649 × 50% = $324.50
If you have a bundled plan that includes a handset repayment, the handset portion follows the device rules above while the service portion is claimed as an ongoing expense.
3. Phone Accessories
Phone accessories purchased for work use are deductible under the same rules:
- Cases and screen protectors — claim work-use % immediately (typically under $300)
- Headphones / earbuds — if required for work calls, claim work-use %
- Car mounts / cradles — deductible if you take work calls while driving for work
- Portable chargers / power banks — claim if used for work purposes
4. Data-Only / Hotspot Usage
If you use your phone as a mobile hotspot for your work laptop, the data used for work is deductible. Track this separately from personal streaming or browsing. Many providers allow you to check data usage by app in your account settings — a practical way to estimate work data vs personal data.
5. International Roaming for Work Travel
If you travel overseas for work and use your Australian mobile number, roaming charges attributable to work use are deductible. Keep your roaming bill and note which days/calls were work-related.
How to Calculate Your Work-Use Percentage
The ATO accepts reasonable estimates. The most defensible method is a 4-week representative diary:
| Week | Work Calls (hrs) | Personal Use (hrs) | Work % |
|---|---|---|---|
| Week 1 | 15 | 25 | 37.5% |
| Week 2 | 18 | 22 | 45.0% |
| Week 3 | 12 | 28 | 30.0% |
| Week 4 | 16 | 24 | 40.0% |
| Average | 38.1% |
Apply this percentage to your total annual phone costs. The ATO recommends keeping the diary for a continuous 4-week period that's representative of your normal work pattern.
Common Mistakes When Claiming Phone Deductions
| Mistake | Why It's Wrong | What to Do Instead |
|---|---|---|
| Claiming 100% of your phone bill | The ATO knows almost everyone uses their phone personally. 100% claims are an audit red flag unless you have a separate work-only phone. | Keep a 4-week diary to establish a reasonable work-use percentage. |
| Claiming the full device cost (over $300) in one year | Phones over $300 must be depreciated over their effective life (2 years). | Depreciate over 2 years, claiming the work-use % each year. |
| No records — just guessing 50% | The ATO requires you to show how you arrived at your percentage. "It feels about half" won't hold up. | Keep one monthly bill and a representative 4-week usage log. |
| Claiming a phone your employer provides | You can't claim a deduction for expenses your employer pays for or reimburses. | Only claim unreimbursed costs you personally incur. |
| Not adjusting for periods without work | If you were on leave, between jobs, or the phone wasn't used for work for part of the year. | Pro-rate your claim based on the actual number of months you worked. |
Records to Keep
- Copies of monthly phone bills (or annual summary from your provider)
- Receipt for phone handset purchase (showing date and amount)
- Your 4-week usage diary or log showing work vs personal use
- Receipts for accessories (case, charger, headphones)
- Employment contract or letter confirming you're required to use your personal phone for work (recommended, not mandatory)
Quick Checklist
- I use my personal mobile phone for work purposes
- My employer does not fully reimburse my phone costs
- I have my phone bills or an annual summary
- I've kept (or can recreate) a 4-week representative usage log
- I've calculated a reasonable work-use percentage
- For a phone over $300, I've calculated depreciation over 2 years
- I've adjusted for any periods I wasn't working
- I have receipts for any accessories claimed
*Disclaimer: This is general information only. Consult a registered tax agent for your specific situation. a registered tax agent (see the directory) Not sure if you need an agent? See our decision guide.*