How long do I need to keep business records in Australia?

Generally five years. The ATO requires you to keep most records for five years, and the period for each record starts from when you prepared or obtained it, or completed the transaction it relates to — whichever is later. Some records, such as those for depreciating assets and capital gains tax assets, must be kept for as long as you own the asset and then a further five years.

Do I need to keep the paper receipt or is a photo enough?

A photo is enough. The ATO accepts digital copies of receipts, including photos, as long as each copy is a true and clear reproduction of the original. Once you have a legible digital copy, you don't have to keep the paper version — which is handy because thermal EFTPOS receipts often fade. Just make sure the copy stays readable for the full five-year retention period.

When do I have to register for GST?

You must register for GST once your business has a GST turnover of $75,000 or more, and you have 21 days to register from when you reach that threshold. You also need to register if you expect to reach it in your first year. Non-profits have a higher threshold of $150,000, and taxi and ride-sourcing drivers must register regardless of turnover.

How to Track Business Expenses in Australia (2026 Guide)

Last updated 28 June 2026

If you run a small business or work as a sole trader in Australia, keeping on top of your expenses isn't just tidy bookkeeping — it's money in your pocket. Every legitimate business expense you record is a deduction you can claim, which lowers your taxable income. Good records also make your quarterly BAS far less painful and give you genuine peace of mind if the ATO ever asks a question. The good news: tracking expenses doesn't have to mean a shoebox of curling receipts. This guide walks through exactly what to record, how to keep receipts the ATO accepts, the GST basics, and a simple routine that takes a few minutes a month.

What counts as a business expense

The core principle the ATO applies is straightforward: you can claim a deduction for expenses you incur in the course of earning your assessable income. If the cost is genuinely for running your business, it's generally deductible. If it's private or domestic, it isn't.

Common deductible expenses for sole traders and small businesses include tools and equipment, software subscriptions, professional services like your accountant, advertising, business insurance, work-related travel, and the business portion of your phone and internet. Where an expense is part business and part private — a mobile phone is the classic example — you can only claim the business-use percentage, so keep a note of how you worked that split out.

Some things are never deductible: private expenses, entertainment, traffic fines, and the GST you paid if you're registered for GST and can claim it back as a credit instead. When you're unsure, ask whether the expense was truly incurred in earning your income. That single test resolves most questions.

What to record for every expense

For each expense, capture five things:

Date of the purchase
Supplier name (and their ABN for larger purchases)
Amount paid
GST included, if any
Business purpose — a short note on what it was for

That last one matters more than people expect. A receipt from a hardware store tells the ATO what you bought, but a quick note ("replacement drill bits for the Smith job") explains why it was a business cost. Recording these details as you go is far easier than reconstructing them months later at tax time.

Keeping receipts the ATO accepts

Here's where many sole traders worry unnecessarily. The ATO's substantiation rule for work-related expenses is this: if your total claim is more than $300, you must keep written evidence — a receipt or invoice — for the whole amount, not just the part above $300. If your total work-related claim is $300 or less, you still need records showing how you worked out the claim, but you don't need to hold receipts for every item. (Note that car, travel allowance and a few other categories have their own special rules.) One important catch, though: that $300 threshold is the work-related-deduction rule for individuals — if you're running a business as a sole trader, there's no de-minimis, so you should keep records for all your business transactions regardless of amount.

The format is up to you. The ATO accepts digital copies of receipts, including photos, provided each is a true and clear reproduction of the original. So a clear photo of a receipt is perfectly acceptable, and you don't need to keep the paper once you have a legible copy — which is a relief given how quickly thermal receipts fade.

For a deeper dive on the paper-versus-digital question, see do you need to keep paper receipts. And once you've decided to go digital, organising your receipts for tax shows how to build a system you can actually find things in.

GST basics

If your business has a GST turnover of $75,000 or more, you must register for GST (you have 21 days from reaching that threshold), and you'll then charge GST on your sales and claim credits for the GST in your purchases. Below $75,000 you can register voluntarily, but you don't have to. Non-profit organisations have a higher $150,000 threshold, and taxi and ride-sourcing drivers must register no matter their turnover.

In Australia, GST is 10% and prices are usually quoted GST-inclusive. On a receipt, the GST is the amount already baked into the total — for a $110 purchase, $10 is GST and $100 is the pre-GST cost. A valid tax invoice for purchases over $82.50 (including GST) is what lets you claim that $10 back as a credit if you're registered. This is exactly why recording the GST on each expense, not just the total, pays off when you complete your BAS. For a closer look at claiming credits and what a valid tax invoice needs, see GST on business expenses.

A simple monthly routine

The secret to painless expense tracking is doing a little, often, rather than a marathon every quarter:

Capture as you go. Photograph or save each receipt the moment you get it, while you still remember what it was for. This is where tracking receipts on your phone earns its keep — snap the receipt and an app like Snapceipt reads the merchant, total, GST and category for you, so the record is built without typing.
Review monthly. Spend ten minutes once a month checking categories are right and nothing's missing. Small, regular reviews catch errors while they're still easy to fix.
Export at BAS and tax time. When your quarterly BAS or annual return rolls around, your records are already complete and categorised — you just export and file.

Tracking business expenses well isn't about working harder; it's about a steady habit and records the ATO will accept. Capture every receipt, note the business purpose, keep your digital copies for five years, and stay on top of GST if you're registered. Do that, and tax time becomes a quiet afternoon instead of a scramble.