Business and Personal Use of the Same Purchase — How Do GST and Tax Claims Work?

When something is used for both business and private purposes, you can only claim the business-use portion — and this applies separately to two different things: the income tax deduction, and the GST credit. Both are apportioned based on genuine business-use percentage, and while they often move together, they aren't automatically identical.

• The income tax deduction. You can claim the business-use percentage of the cost as a deduction — whether immediately, through the instant asset write-off, or over time through depreciation, depending on the cost and your eligibility.

• The GST credit. Separately, if you're GST-registered, you can claim the business-use percentage of the GST included in the purchase price as a credit on your BAS.

In most everyday situations, the same business-use percentage applies to both — but it's worth understanding they're genuinely separate claims, calculated and reported through different mechanisms.

• Base it on genuine usage patterns, not a round number that happens to be convenient.

• Where possible, use objective evidence — a logbook for a vehicle, a record of hours worked from home, or a considered, honest estimate for something like a laptop or phone.

• Keep a record of how you arrived at the percentage, not just the percentage itself — this is what the ATO expects if a claim is ever reviewed.

• Review it periodically, particularly if the pattern of use changes meaningfully.

A sole trader buys a laptop for $2,200 (including $200 GST), genuinely using it 70% for business and 30% for personal purposes.

• GST credit: 70% of $200 = $140 claimed on the next BAS.

• Income tax deduction: 70% of the GST-exclusive cost ($2,000) = $1,400, either claimed under the instant asset write-off if eligible, or depreciated over the asset's effective life.

Claiming the full $2,200 as a business expense, or the full $200 GST credit, would overstate the claim by the private-use portion — exactly the kind of error the ATO's data-matching and review processes are designed to catch.

An inflated business-use percentage might feel like a bigger deduction today, but it creates real risk — an unsupported claim can be disallowed entirely if reviewed, along with potential penalties, rather than simply reduced to the correct amount. A genuine, well-documented estimate, even a conservative one, is a far more durable position than an aggressive guess.

• For each mixed-use purchase, do I have a genuine, considered business-use percentage — not just a round guess?

• Am I applying that same logic consistently to both the GST credit and the income tax deduction?

• Do I have a record showing how I arrived at the percentage?

• Have I revisited the percentage if the actual pattern of use has changed since I first estimated it?

• you have a significant mixed-use purchase and want the apportionment calculated and documented properly;

• you're not sure whether your business-use percentage is genuinely defensible;

• you want a consistent approach set up across all your mixed-use assets, not case-by-case guessing; or

• you're reviewing past claims and want to confirm they were apportioned correctly.

→ Business Expense or Personal Expense — Where Is the Line?

→ What Business Expenses Can I Claim as a Tax Deduction?

→ What Is Depreciation — and Why Can't I Always Claim an Asset Immediately?

SKC Accounting | Knowledge Centre | Knowledge Guide 067

Last reviewed: August 2026

General information only. This guide does not take into account your individual circumstances and is not a substitute for professional accounting, taxation, legal or financial advice.