What Income and Expenses Arborists Must Report on Tax Returns
Accurate reporting of all income and claiming every eligible expense on your tax return ensures you meet ATO requirements, maximise deductions, and secure any refund you’re entitled to by the end of the financial year.
Arborists running a sole trader tree service business need to understand exactly what to include when they lodge a tax return. Whether you tackle your own tax return through the ATO’s online services or engage a registered tax agent, knowing which streams of income to report and which expenses you can claim—and keeping good records—means you’ll pay the right amount of tax and avoid surprise liabilities when it’s time to lodge.
Income You Must Report
When preparing your individual tax return, include every source of income:
Service Income: All fees for pruning, removal, stump grinding, emergency callouts and advice on tree health must be declared as income.
Equipment Hire: Any money earned from hiring out cherry pickers, woodchippers or other tools counts as other income you need to report.
Government Payments: Grants, subsidies or rebates you receive, including health funds rebates linked to your work, are assessable and must be included.
Interest and Dividends: Interest on business bank accounts or dividends from business savings must be declared on your income tax.
Ensure your Australian business number (ABN) appears on all invoices and, where required, reference your tax file number. The ATO website’s pre-filled data may include some income details—always review and correct these before you lodge your tax return.
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Expenses You Can Claim
To reduce your taxable income, claim costs that directly relate to running your tree service:
Tools and Equipment: Chainsaws, pole saws, climbing gear and safety equipment can be claimed either at cost or depreciated over their effective life. Small items under the instant asset write-off threshold are generally claimable in full in the year you buy them.
Vehicle and Travel: Keep a logbook to show business versus personal use. You can calculate deductions for fuel, maintenance, insurance and depreciation, or opt for the cents-per-kilometre method if it’s simpler.
Insurance and Risk Management: Premiums for public liability, professional indemnity and income protection are all eligible deductions.
Education and Memberships: Course fees for chainsaw operation, first aid training or ISA certification, plus membership fees for arboriculture associations, can be claimed.
Office and Communication: Business phone calls, internet costs, accounting software subscriptions and stationery are deductible to the extent they’re used for work.
Hold on to all receipts, invoices and digital records for at least five years—good records make it easier to calculate deductions and support your claims if the ATO asks for evidence.
How to Lodge Your Tax Return
You have three main options:
Lodge online through ATO online services—ideal if you prepare your own individual tax return.
Use a private tax agent—ensure you register with a registered tax agent before 31 October to benefit from any extensions.
Complete a paper tax return—less common but still accepted if you prefer.
Lodging early helps you receive any refund sooner. The ATO will often pre-fill income details; you simply verify these, add your business expenses and submit.
Top Tips to Stay Compliant
Maintain separate bank and business accounts and keep clear, up-to-date records using simple bookkeeping tools or a spreadsheet. Set reminders for key deadlines—end of the financial year, BAS lodgment dates and the 31 October tax return deadline. If your turnover passes $75,000 and you register for Goods and Services Tax, include GST on your invoices and lodge your BAS on time. And whenever your business structure or income changes, talk to an accountant or registered tax agent for guidance.
By declaring every dollar of income, claiming all work-related expenses and keeping good records, you’ll only pay the tax you owe and may receive a refund more quickly. That way, you can focus on growing your tree-care business—knowing your tax return is correct and compliant.