You pay less tax in Australia by reducing your taxable income through eligible deductions and correctly reporting taxable investment gains. This includes claiming valid work related expenses, claiming tax deductible gifts to eligible organisations, and bringing forward deductible expenses into the current income year when the rules allow. You must keep records and only claim amounts that relate to earning your income.
5 Tips to Paying Less Tax
Last updated:
12 Jan 2026
Originally published:
Mar 2021
Overview: Paying less tax in Australia involves using lawful tax planning strategies that comply with Australian Taxation Office rules. Australian taxpayers may reduce taxable income by claiming eligible work related deductions and tax deductible charitable donations, timing deductible expenses before 30 June, and understanding that capital losses can generally only offset capital gains, with wash sale arrangements potentially denied and penalised by the ATO. Professional advice may assist based on individual circumstances.
While the idea of doing your taxes may not excite anyone, if you set aside some quality time to get your finances in order, you can end up with some extra savings. The benefit of doing the hard work up front is that later on, you can reap the rewards and returns faster. To help you come out on top, we've put together five tips to help you pay less tax this year.
1. Claim Charitable Donations to Reduce Your Taxable Income
Make a last minute charitable donation. You can claim a deduction for donations of more than $2 to a registered charity provided you have a receipt for the donation. Make sure the donation is to a Deductible Gift Recipient (DGR). Most major charities are DGR’s.
2. Claim Work-Related Tax Deductions
You can claim anything associated with doing your job. If the item you've purchased is used for work purposes and private purposes, make sure you include only the work-related part of your purchase in your tax deduction.
If you're not certain if an item is claimable, hold onto your receipt and let your H&R Block tax specialist advise you. So you don't miss out on any deductions, we always recommend holding onto all your receipts.
3. Prepay Eligible Expenses Before 30 June to Reduce Tax
If you get all your expenses in before the end of June, you can claim them in this return and reap the benefits straight away. If you make the purchase post-July, you'll have to wait a whole year until you can claim it.
Now's the perfect time to pause and assess how you're managing your money. If you've fallen behind or become lax with your documents and receipts, there's still time to pull it all together to make sure you maximise your refund.
4. Consider Tax Consequences When Investing to Pay Less Tax
Don't rush into an investment – before you make a move, always talk to a financial planner. Every investment should give you an advantage now, as well as in the long term. There's little purpose in saving a tiny bit of tax now if your investment goes on to lose your initial capital.
You'll also have to pay tax on any shares you've sold or investments that you've made money from. Keep this to a minimum by reducing your assets that are sitting at a loss. Be cautious of selling shares sitting at a loss and then purchasing them back when the tax year ticks over. The ATO is cracking down on this process, known as 'wash sales' and may cancel benefits falling under this category and issue penalties.
5. Get Professional Advice
The more information you have about your tax, the better you can budget. When you're putting together your tax plan, get advice from an expert accountant who specialises in tax. Doing your research will ensure you can max your tax refund, so ask your agent about deductible expenses and get clarity around what you can and can't claim. Often, they'll be aware of deductions you're not.
Let H&R Block Help
With over 50 years as Australia's leading taxation experts, we've had many happy returns. Whether you choose to lodge online or in-store, your return will be double checked by one of our tax professional to make sure you're paying less tax.
The benefits of lodging online are:
Frequently Asked Questions
A donation is tax deductible when it is a genuine gift of $2 or more to an organisation with deductible gift recipient status and you do not receive a material benefit in return. You need a record of the gift, such as a receipt or other evidence of the payment. Only the gift component is deductible.
You can claim a work related deduction only when you incur the expense yourself, it directly relates to earning your assessable income, and you have records to substantiate it. If an expense is partly private, you can only claim the work related portion. You cannot claim expenses that have been reimbursed.
Prepaying can let you claim a deduction earlier when the payment is deductible and the eligible service period meets the relevant prepayment rules. For many individuals, a prepaid expense may be fully deductible in the year you pay it when the eligible service period is 12 months or less and ends in the next income year. If the eligible service period is longer, the deduction is spread over the service period.
Selling shares or other CGT assets can create a taxable capital gain that is included in your tax return. Capital losses can reduce capital gains, but they cannot be used to reduce other income such as salary or wages. Arrangements that create a loss while maintaining the same economic exposure, such as selling and quickly buying back the same or substantially identical asset, can be denied and may lead to penalties.
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