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Can You Claim AI Tools Like ChatGPT, Microsoft Copilot and Canva Pro on Your Tax Return?

Artificial Intelligence (AI) tools have quickly become part of everyday work for employees, freelancers, students and business owners. Platforms such as ChatGPT, Microsoft Copilot, Canva Pro, Grammarly, Notion AI and other AI-powered software are helping Australians improve productivity, create content, analyse data and streamline daily tasks.

A common question this tax season is:

“Can I claim my AI subscriptions on my Australian tax return?”

The answer is yes,

but only if the subscription is directly related to earning your income and meets the Australian Taxation Office (ATO) requirements.

At D&B Accountants, we’ve seen a significant increase in enquiries from professionals, sole traders and businesses asking whether AI software subscriptions are tax deductible. Here’s what you need to know.

 When Are AI Tool Subscriptions Tax Deductible?

Generally, you may be able to claim the cost of an AI subscription if:

  • You personally paid for the subscription.
  • The tool is used to help you earn your assessable income.
  • The expense is not reimbursed by your employer.
  • You keep evidence such as invoices or receipts.

Like any work-related expense, the deduction depends on how the software is used, not simply because it’s an AI product.

For example, if you subscribe to ChatGPT or Microsoft Copilot to prepare reports, analyse business data, draft professional emails or assist with coding and research as part of your work, the subscription may be deductible.

 Employees vs Sole Traders – Who Can Claim?

Employees

Sole Traders & Business Owners

Can generally claim the work-related portion if they paid for the subscription themselves and it directly relates to their job.

Can generally claim business-related AI software used in running their business, provided the expense is incurred in earning business income.

Cannot claim if the employer reimbursed the expense.

Business records should clearly show the subscription is used for business purposes.

If your AI subscription is used for both personal and work purposes, only the work-related or business-use portion may be claimable.

Examples of AI Software That May Be Claimable

Depending on your occupation and how the software is used, examples may include:

  • ChatGPT Plus
  • Microsoft Copilot Pro
  • Canva Pro
  • Grammarly Premium
  • Notion AI
  • Adobe Firefly (where work-related)
  • AI coding assistants used for employment or business activities

The important consideration isn’t the brand, it’s whether the subscription helps you earn your income.

 

Examples by Occupation

Marketing Professionals

A marketing specialist uses Canva Pro and ChatGPT to create social media campaigns, write advertising copy and prepare client presentations.

These subscriptions may be deductible if they are paid personally and used for work.

Small Business Owners

A business owner uses Microsoft Copilot to prepare reports, analyse spreadsheets and draft client proposals.

Because the software is used in operating the business, it may qualify as a business expense.

Freelance Designers

A freelance graphic designer uses Canva Pro together with AI features to produce client designs.

Provided the subscription is used for business purposes, it may generally be claimed as a business expense.

 

Software Developers

A software developer subscribes to ChatGPT Plus to assist with coding, debugging and technical documentation.

If the subscription is directly related to producing income, it may qualify as a work-related expense.

What Records Should You Keep?

Good record keeping is essential.

Keep copies of:

  • Subscription invoices
  • Payment confirmations
  • Credit card statements
  • Renewal receipts
  • Business accounting records
  • Notes explaining how the software is used for work

If the subscription is shared between personal and work use, keep records that help demonstrate the work-related percentage.

Maintaining accurate documentation can make it much easier if you’re ever asked to substantiate your claim.

 

Common Misconceptions

“If I use ChatGPT sometimes for work, I can claim the entire subscription.”

Not necessarily.

If the subscription is partly used for personal purposes, only the work-related portion may be deductible.

 

“Students can always claim AI subscriptions.”

Being a student alone doesn’t automatically make an AI subscription deductible.

The expense must relate to earning your current income or otherwise meet the relevant tax requirements.

 “Every business software subscription is automatically deductible.”

Not always.

The software must genuinely relate to running your business or producing assessable income.

 “My employer pays for ChatGPT, so I can still claim it.”

No.

If your employer reimburses or pays for the subscription, you generally cannot claim it yourself.

 AI Is a Productivity Tool,Not a Shortcut for Tax Advice

AI tools can help organise information, draft documents and improve productivity, but they shouldn’t replace professional tax advice.

Australian tax law depends on your individual circumstances, and claiming expenses incorrectly could lead to adjustments or penalties.

If you’re unsure whether an AI subscription is deductible, it’s best to seek advice before lodging your return.

 How D&B Accountants Can Help

At D&B Accountants, we help individuals, sole traders and businesses across Pakenham, Officer, Berwick, Beaconsfield, Clyde, Clyde North, Narre Warren, Cranbourne and surrounding suburbs prepare accurate tax returns and maximise legitimate deductions.

Whether you’re claiming work-related software, business expenses, vehicle costs or home office deductions, our experienced team can help ensure your return is prepared correctly.

Explore more helpful tax resources:

Ready to lodge your tax return?

Contact D&B Accountants today to book an appointment and receive professional advice tailored to your individual or business circumstances.

 

Frequently Asked Questions

Can I claim ChatGPT Plus on my Australian tax return?

You may be able to if the subscription is directly related to earning your income, you paid for it yourself and you weren’t reimbursed. If it’s used for both work and personal purposes, only the work-related portion may be claimable.

Is Canva Pro tax deductible?

If Canva Pro is used for work or business activities, such as creating marketing materials or client presentations, the relevant work-related portion may be deductible.

Can sole traders claim AI software subscriptions?

Yes, where the subscription is incurred in running the business and generating assessable income. Appropriate records should be kept.

Can employees claim Microsoft Copilot?

Employees may be able to claim the work-related portion if they paid for the subscription themselves and use it in performing their employment duties.

Do I need receipts?

Yes. Keep invoices, payment records and any documentation that supports your claim.

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