Tax Guide for Real Estate Employees
- Sep 17
- 14 min read
Welcome to your no-nonsense tax guide, made specifically for real estate employees right here in Australia. Let's be honest, the property market is a wild ride. Your income can swing wildly, and expenses pile up, making tax time feel like a puzzle. This guide is here to clear the fog and give you straightforward, practical advice, minus the usual Australian Taxation Office (ATO) jargon.
Your Tax Roadmap as a Real Estate Pro
Meet your real estate dream team – navigating deals, commissions, and taxes with confidence.
Being in real estate means your financial picture is always changing. One month you might land a huge commission, and the next could be a lot quieter. This up-and-down reality means you have to be smart about managing your tax obligations, or you could be in for a nasty surprise when the financial year wraps up.
Think of this guide as your roadmap to getting it right. We'll walk through the essentials of your tax situation, especially how the Pay As You Go (PAYG) system works with your unique income structure. Nailing this is the first big step to taking control of your finances.
The Booming Real Estate Scene
The Aussie real estate industry isn't just fast-paced; it's getting bigger every year. The sector has ballooned by nearly 30% over the last decade, with the number of agents jumping from 83,900 in 2014 to a massive 108,700 in 2024. This growth spurt makes it more important than ever for every agent and employee to have a solid handle on their tax responsibilities.
We're going to break down everything you need to know, from how your income is taxed to what you can claim, so you can feel confident and prepared.
What This Guide Covers
We've built this resource to tackle the specific challenges and opportunities you face as a real estate professional. Here’s a quick look at what’s inside to help you stay on the right side of the ATO and get the most out of your return:
Understanding Your Income: We’ll untangle how commissions, bonuses, and allowances are treated under the PAYG system.
Maximising Deductions: A deep dive into the common—and often missed—claims you can make, like car, phone, and home office expenses.
Smart Record-Keeping: Simple, practical tips for keeping your receipts and paperwork in order all year long.
By the time you're done, you'll have the know-how to manage your taxes like a pro. Whether you’re just starting out or have been in the game for years, mastering these basics is key. For a quick refresher on the fundamentals, our guide on how to file taxes in Australia is a great place to start.
Navigating Your Income and PAYG Tax
Working in real estate means your income probably isn't a neat, predictable figure each month. It's more of a cocktail—a base salary mixed with commissions, maybe a performance bonus, and allowances for things like your car or phone. This blend makes sorting out your tax a bit more involved than your average nine-to-five job.
The ATO views every part of that cocktail—salary, commission, bonuses—as your assessable income. Your employer's job is to withhold tax from these earnings through the Pay As You Go (PAYG) system. You can think of PAYG as an automated savings account for your tax bill, where a slice is taken out each pay cycle to cover what you'll owe at the end of the year.
How PAYG Withholding Works for You
The amount of tax withheld is determined by what you put on your TFN declaration form and the ATO’s official tax tables. This works perfectly when your pay is the same week in, week out. But for real estate employees, income can be a rollercoaster. Landing a big commission can suddenly spike your earnings for that pay period, pushing you into a much higher tax bracket, temporarily.
This might look alarming, but it’s actually the system trying to prevent a nasty tax debt later on. The extra tax is withheld to account for the big jump in income. However, if your earnings are consistently up and down or you have a lot of work-related deductions, the standard PAYG withholding might not be a perfect match for your final tax liability. The way tax is handled can also shift depending on whether you're an employee or a contractor. For a full rundown, check out our guide on the differences between an employee vs contractor in Australia.
Key Insight: A sudden, large commission doesn’t permanently change your tax bracket for the entire year. Australia uses a progressive tax system, meaning you only pay the higher rate on the portion of your income that falls within that bracket.
Aligning Your Tax with Your Reality
If you’re consistently racking up high work-related expenses, the default PAYG withholding might be taking too much from your pay. In effect, you're giving the ATO an interest-free loan until you get it back as a refund. There's a way to fix this: a PAYG withholding variation. By lodging an application, you can have your employer reduce the amount of tax withheld, which frees up your cash flow during the year.
This is a smart move for agents with significant and predictable costs, like car expenses or marketing contributions. Furthermore, for those involved in property management, having a grasp on international tax rules, such as the Netherlands rental income tax, can be incredibly valuable when advising clients or handling overseas portfolios. The goal is always to get your tax withholding as close as possible to your actual income and deductions to avoid any surprises when tax time rolls around.
Claiming Your Car Expenses the Smart Way
For anyone in real estate, your car isn't just for getting from A to B. It’s your mobile office, your client shuttle, and an absolutely essential part of the job. Every drive to a property viewing, a client meeting, or an open home is a work-related trip, and all those associated costs can add up to some serious tax deductions. Not claiming them properly is just leaving money on the table.
The Australian Taxation Office (ATO) gives you two ways to claim these costs. Think of it as choosing between a quick, straightforward estimate and a more detailed, but often more rewarding, calculation. Which one you pick really depends on how much you drive, how you like to keep records, and ultimately, which path puts more money back in your pocket.
Two Paths to Your Deduction
The ATO has two approved methods for claiming car expenses, each with its own pros and cons. Getting your head around both is the key to maximising your tax refund.
The Cents per Kilometre Method: This is the simple, no-fuss option. For the 2024-25 financial year, you can claim a flat rate of 88 cents per kilometre. This is capped at a maximum of 5,000 work-related kilometres. The beauty of this is you don’t need a shoebox full of receipts for fuel or insurance, but you do need to show the ATO how you worked out your kilometres, like with a diary of your work trips.
The Logbook Method: Now, this one takes a bit more effort, but it can lead to a much bigger deduction, especially if you live in your car for work. You’ll need to keep a detailed logbook for a continuous 12-week period to figure out the business-use percentage of your car. Once you have that magic number, you can claim that percentage of all your actual car running costs—we’re talking fuel, insurance, registration, servicing, and even the depreciation in your car’s value.
Real estate salaries can swing quite a bit depending on your role, which makes nailing these deductions even more important for boosting your take-home pay.
Salary breakdown across real estate roles – agents lead the pack, but every position counts when it comes to tax.
This image breaks down the average annual salaries for different real estate roles, showing why maximising every possible deduction is a smart move at any income level.
Making the Right Choice for You
Deciding between the two methods isn't a random choice; it's a strategic one. If you only drive for work occasionally, the cents per kilometre method is a hassle-free way to get a deduction. But if your car is practically your business partner, the logbook method will almost always give you a much better tax outcome.
To make this crystal clear, let's look at a side-by-side comparison.
Comparing Car Expense Claim Methods
Feature | Cents per Kilometre Method | Logbook Method |
|---|---|---|
Record Keeping | Easy. Just need to track work kilometres (e.g., diary). | More involved. Requires a 12-week logbook and receipts for all car expenses. |
Claim Limit | Capped at 5,000 work-related kilometres per year. | No kilometre limit. Based on your business-use percentage. |
What You Can Claim | A flat rate of 88 cents per km (for 2024-25). | A percentage of all actual car costs, including fuel, insurance, rego, repairs, and depreciation. |
Best For | People who do infrequent work-related driving. | Agents, property managers, and anyone who drives extensively for work. |
The table really highlights the trade-off: simplicity versus a potentially much larger deduction.
Example Scenario: Let's meet Sarah, a busy property manager who drives 12,000 work-related kilometres a year. With the Cents per km method, she'd hit the cap and could only claim 5,000 km x $0.88 = $4,400.* Using the Logbook method, her logbook shows her car is used for work 75% of the time. Her total car expenses for the year (fuel, insurance, rego, depreciation, etc.) come to $15,000. Her claim would be 75% of $15,000 = $11,250.
In Sarah's case, putting in the effort to keep a logbook results in a deduction that is $6,850 higher. That initial work really pays off.
For a complete breakdown of all the rules, check out our detailed 2024-25 guide on navigating car tax deductions in Australia. And just a crucial reminder: the trip from your home to your main office is considered a private commute by the ATO, so you can't claim that.
Unlocking Key Real estate Tax Deductions
Every receipt, graph, and meeting counts – digging into deductions that help reduce your tax bill.
While your car is often the biggest source of deductions, it's really just scratching the surface. As a real estate professional, you rack up a whole host of costs just to do your job, and overlooking them means you're leaving money on the table for the taxman.
Let’s dive into the key deductions that can seriously lower your taxable income. From your annual licence renewal to the portion of your phone bill used for work, every claim needs to be legitimate and, most importantly, backed by solid proof.
The ATO lives by three 'golden rules' for any work-related expense: you must have paid for it yourself (and not been reimbursed), it has to be directly linked to earning your income, and you need a record to prove it.
Essential Professional Expenses
Some costs are just part of the ticket price for working in real estate. These are usually the most straightforward claims you can make, as long as you have the receipts handy.
Licence and Registration Renewals: That annual fee to keep your real estate licence or registration active? It’s 100% deductible. This is a non-negotiable cost of staying in the game.
Professional Association Fees: If you’re a member of an industry body like the Real Estate Institute of Australia (REIA) or your state’s equivalent, those membership fees are claimable.
Work-Related Training: Any courses, seminars, or training you undertake to sharpen your skills for your current role are also deductible.
The simplest way to stay organised is to keep digital copies of all these invoices and renewal notices. That way, everything is ready to go at tax time.
Communication and Technology Costs
In a career that’s all about being connected, your phone and internet are your lifeline. You can absolutely claim the work-related portion of these bills, but you can’t just guess a number.
A great way to figure this out is by keeping a logbook or diary for a typical four-week period. Let's say your monthly phone bill is $100. If your diary shows that 60% of your calls and data usage were for work, you can claim $60 each month. The key here is basing your claim on actual usage, not a rough estimate.
Marketing and Client-Related Deductions
Did you pay for something to market yourself or a property out of your own pocket? If your employer didn't reimburse you, it could be a valid deduction. This is a big one for real estate employees, who often have to personally invest to get ahead.
These claims might include things like:
Self-Funded Advertising: The cost of boosting a social media post, printing flyers, or any other promotional materials you paid for.
Client Gifts: A settlement gift basket for a client is generally deductible. But be careful—the ATO draws a line at anything it considers 'entertainment' (like concert tickets). A nice bottle of wine or a floral arrangement is usually fine, just keep it reasonable.
Property Styling and Photography: In today's market, standout presentation is key. If you're footing the bill for services like professional real estate drone photography, that's a potential deduction.
Real estate is a competitive field, and it’s known for high staff turnover. Even with a national slowdown in job mobility, sales workers—including agents—saw a 9.9% turnover rate in the year to February 2025. This pressure often leads agents to spend their own money to stand out, making these deductions all the more important.
Home Office Expenses
If you regularly work from home—whether it's answering late-night emails, prepping reports, or making calls—you can likely claim home office expenses. For the 2024-25 financial year, the ATO has a fixed-rate method of 70 cents per hour.
The Golden Rule of Substantiation: For every single deduction, ask yourself one question: "Can I prove I spent this?" You need to hold onto receipts, invoices, bank statements, and diaries. Without proof, even the most legitimate expense can be rejected by the ATO if you're ever audited.
This 70-cent rate is a handy shortcut that covers your electricity, gas, internet, phone usage (both mobile and home), and stationery.
And if you’re a real estate professional who also happens to be a landlord, understanding how these principles cross over to your investment properties is crucial. Our guide on tax deductions for rental property offers some great insights on that front.
Mastering the Art of Record-Keeping
The secret to a successful tax return isn't some clever tax loophole; it's the habit of good record-keeping you maintain all year. For real estate employees especially, whose work-related expenses can be significant, this is non-negotiable. The Australian Taxation Office (ATO) is clear: if you can't prove you spent the money for work, you can't claim the deduction.
Scrambling through a shoebox of faded receipts in June is a recipe for stress and missed deductions. The key is to create a simple, sustainable system that works for you. This turns tax time from a frantic rush into a streamlined process.
Finding Your Perfect System
There's no one-size-fits-all solution for tracking expenses. The best system is the one you'll actually stick with. Most real estate professionals find success with one of two approaches:
Modern Apps: Dedicated expense-tracking apps can automate much of the process. You can snap a photo of a receipt, and the app will digitise the details, categorise the expense, and store it securely in the cloud. This is perfect for agents who are always on the move.
The Classic Spreadsheet: If you prefer a hands-on approach, a well-organised spreadsheet is a powerful tool. Create columns for the date, supplier, type of expense, amount, and a brief description. Store scanned copies of your receipts in a corresponding digital folder.
Key Insight: Whether you use an app or a spreadsheet, the goal is the same: to create a single source of truth for all your work-related spending. This proactive approach ensures you capture every possible deduction.
Organising Your Financial Records
Once you've chosen your tool, the next step is organisation. The easiest method is to create a digital folder for each financial year. Within that folder, create sub-folders for different expense categories, like 'Car Expenses', 'Phone & Internet', 'Marketing', and 'Professional Fees'.
Make it a habit to save a digital copy of every receipt, invoice, or bank statement to the correct folder as soon as you get it. This small act, which takes only seconds, will save you hours of headaches later.
Under ATO rules, you generally need to keep your tax records for five years from the date you lodge your tax return. A clean, organised digital system makes this obligation easy to meet and ensures you're always prepared in the unlikely event of an audit.
Common Tax Questions from Agents Answered
Tax help made simple – asking the right questions can save real estate pros time, money, and stress.
Even when you've got a decent handle on deductions and keeping records, a few tricky questions always seem to pop up for real estate employees. It’s hardly surprising. Your job is a unique mix of office work, being on the road for appointments, and dealing with income that can go up and down, which naturally creates some grey areas.
Let’s clear up the confusion. Here are some direct answers to the tax questions we hear most often from agents and property managers, so you can tackle these issues with confidence.
Can I Claim My Work Clothing?
This is easily one of the most common questions, and the short answer is usually no. The ATO is incredibly strict about what it considers a deductible work uniform.
For your clothing to be claimable, it has to meet one of these conditions:
Compulsory and Uniform: Your employer makes you wear it, and it clearly identifies you as part of the agency. Think a shirt or blazer with a big, obvious company logo.
Protective: It’s clothing you need to wear to protect yourself from getting sick or injured on the job, which is less common in real estate.
A general dress code, like a requirement to wear a business suit or professional attire, does not count. The ATO sees a standard suit as conventional clothing, so even if you only wear it for work, you can't claim the cost.
Are Client Gifts and Entertainment Deductible?
This is where the details really matter. The ATO draws a very clear line in the sand between 'gifting' and 'entertainment', and it’s a distinction you need to understand.
Gifts (Deductible): Giving a client a settlement gift—like a bottle of wine, a hamper, or flowers—is generally deductible. The tax office views these as promotional expenses designed to help you get more business down the track.
Entertainment (Not Deductible): Taking a client out for coffee, a meal, or to a sporting event is classed as entertainment. These costs are not tax-deductible, full stop.
Key Takeaway: From the ATO's perspective, entertainment is about enjoyment and doesn't have a direct enough link to earning your income. Your safest bet is to always stick to tangible gifts to make sure the expense is claimable.
How Does the Current Job Market Affect Me?
It always helps to know what’s happening in the wider economy. Australia's real estate sector is part of a tight labour market right now, though we're seeing some early signs of it softening.
As of March 2025, there were still 329,600 vacant jobs across the country—that’s double the pre-pandemic number and shows just how competitive it is for employers. In June 2025, the national unemployment rate was 4.3%, with underemployment at 6.0%, pointing to strong demand for skilled professionals.
What if I Use My Personal Phone for Work?
Using your personal mobile for work calls and emails is pretty much standard for every agent out there. And yes, you can definitely claim a deduction for the work-related chunk of your phone bill.
The catch is, you can't just pluck a random percentage out of thin air.
The best way to do it is to take a typical one-month bill and properly analyse your usage. Go through your call log and data to figure out what percentage was for work. As long as your work habits stay pretty much the same, you can then apply that percentage to your phone bills for the whole financial year. Just be sure to keep that analysed bill safe as proof of how you worked it out.
Need a Hand with Your Tax Return?
Trying to figure out your tax obligations as a real estate agent can feel like you’re navigating a maze blindfolded. It's complicated, and you shouldn’t have to go it alone. Making sure you claim every single dollar you're entitled to—without accidentally crossing a line with the ATO—takes a sharp eye for detail.
That's where we come in. Our team is here to cut through the confusion and help you get your tax return sorted, maximising what you get back.
Don't leave your hard-earned money on the table or risk a costly mistake. Getting professional advice means you can lodge your return feeling confident and stress-free. Whether you're tangled up in car expense calculations, home office claims, or wondering about a PAYG variation, our experienced tax agents have seen it all.
Let us handle the tricky stuff so you can get back to what you do best—closing deals and looking after your clients.
• Need assistance? We offer free online consultations:
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