How Long to Keep Tax Records in Australia (and Which Ones)

The refund has landed and the folder of receipts is still on the desk. Most people expect the answer to be “five years from the date on the receipt”. How long to keep tax records in Australia is five years for most records, but the clock does not start on the receipt. For a business it starts on the later of making the record and finishing the transaction it relates to. For an employee’s work expenses it starts on the return’s due date, or the day you lodge if that is later. For an asset, the transaction finishes when you sell it, so the papers for a ute bought in 2021 are still live in 2029, and binning them five years after the purchase leaves every depreciation claim since with nothing behind it. The cost of a missing record is the deduction, and for a record a tax law requires, a penalty of up to $7,280.

Records are what stand behind every small business tax deduction. Below: the two clocks, five versus seven by structure, which records to keep, what to keep longer, the 2026-27 change, and what happens without them.

How long do you need to keep tax records in Australia?

Five years, for most records. The ATO’s record-keeping rules for business put it in one line: you need to keep most records for five years. The statute behind it, section 262A of the Income Tax Assessment Act 1936, says the five years run from when the records were prepared or obtained, or from the completion of the transactions or acts they relate to, whichever is later.

That “whichever is later” is the first clock, and it applies to a sole trader, a partnership, a trust and a company alike. A supplier invoice dated 12 August 2025 and paid on 3 September 2025 stays until September 2030 at the earliest, and because it also backs a deduction on a return, counting five years from the day that return was lodged is the reading that can’t leave you short.

The second clock is for employees. The substantiation rules in the Income Tax Assessment Act 1997 keep the written evidence for a work expense for five years starting on the due day for lodging the return, or on the day you lodge if that is later. The due date depends on how you lodge: 31 October for self-lodgers, and later through an agent’s program, as the tax return deadline guide sets out.

Five is the number because it has to outlast the period in which the ATO can reopen the return, covered below.

Five years or seven? What each structure keeps

The ATO’s rule is five years for everyone. The seven years that half the internet quotes comes from two other laws. Section 286 of the Corporations Act requires a company to keep written financial records that correctly record and explain its transactions, retained for seven years after the transactions are completed. Any employer must make and keep employee records for seven years under the Fair Work Act’s employee records rule.

Structure	How long	Where the rule comes from
Sole trader, no staff	5 years	ITAA 1936 s262A, the ATO’s general rule
Sole trader with staff	5 years for tax, 7 for employee records	s262A, plus Fair Work Act s535 for pay, hours and leave
Partnership	5 years	s262A. The partnership keeps the business records, each partner their own return
Trust	5 years, plus the deed and resolutions	s262A. Trustee resolutions are made by 30 June each year and stay with the records
Company	7 years in practice	5 for tax under s262A, 7 for financial records under Corporations Act s286
Any employer	7 years for employee records, 5 for super and FBT	Fair Work Act s535. Super contribution records run 5 years from the contribution, FBT records 5 years from the FBT return

The Corporations Act’s own small business guide says the seven-year record is a systematic record of the company’s transactions, not merely a collection of receipts, invoices, bank statements and cheque butts. The ledger is the seven-year record and the shoebox backs it.

Which records to keep

Anything that shows income, expenses and the basis of a claim. The ATO’s minimum for a record is the date, the amount, a description, the GST information, the purpose of the transaction, and the relationship between the parties where it matters, in English or readily convertible, not alterable, and producible if the ATO asks.

A receipt has to carry the supplier’s name, the amount, the nature of the goods or services, the day the expense was incurred and the day the document was made out. The ATO’s own line on the alternative: bank or credit card statements usually won’t contain this information. The statute allows two patches: a bank statement can prove the day you paid where the receipt doesn’t show it, and if the receipt doesn’t say what the goods were, you can write that in yourself before you lodge.

• Income: invoices issued, sales records, platform and payment statements, cash sales
• Expenses: receipts and tax invoices (the tax invoice also backs the GST credit on your BAS)
• Bank and loan statements for every account the business uses
• BAS and GST workings for each activity statement
• Payroll and super: pay slips, Single Touch Payroll reports, super payment confirmations
• Assets: purchase documents, the depreciation schedule or small business pool workings
• Vehicle: the logbook, odometer readings and running costs
• Home-based business: the record of hours worked from home for the whole year, and one bill for each running expense
• Stock: the stocktake at 30 June

The vehicle row carries the most paper, because the business vehicle deduction turns on a logbook kept for 12 continuous weeks and the receipts behind every running cost. The home-based business row is the one most often estimated after the fact: the fixed rate method needs a record of all hours worked from home for the entire year, a diary, roster or timesheet, not a guess in July.

Records kept as you go are tax-ready records, which is the fixed-fee condition for a sole trader return. All major accounting software is welcome (Xero, MYOB, QuickBooks and others), spreadsheets or bank transactions plus a list of expenses are a fine starting point for a simpler business, and where the records aren’t there yet, bookkeeping support is $80 an hour with the hours agreed first.

Records to keep longer than five years

Anything tied to an asset, a capital gain, a carried-forward loss, or a return that is still open.

For a CGT asset the statute sets its own clock: you keep the records until the end of five years after it becomes certain that no CGT event, or no further CGT event, can happen that the records could be relevant to. In practice that is for as long as you own the asset and five years after you sell it. The records that matter are the ones the Act’s own example lists: the acquisition date, the disposal date, each element of the cost base, and what you sold it for.

A depreciating asset works the same way. The ATO’s business page says to hold the record while the asset is held and for five years after disposal, and a small business using the pool keeps five years of the opening balance, business-use changes and disposals. The paper outlives the asset because of the sale: the business share of what you receive for an asset you wrote off is assessable income in the year you sell it, the clawback the instant asset write-off guide walks through, and the ATO tests that figure against the original cost.

A loss carried forward keeps its records live too. They relate to the year the loss is finally deducted as much as to the year it was made, so the five years run from the year it is used.

Three situations stretch the clock after the fact:

• If the ATO extends the period in which it can amend your assessment, the records run to the end of the extension.
• If you are in a dispute with the ATO about an expense when the five years end, the evidence for it is kept until the dispute is over.
• GST records run to the longest of five years after the transaction, the period of review for the activity statement, or four years after an amendment to it.

The logbook has a fixed life of its own: each one is valid for five years, and for every later year it covers you keep that year’s opening and closing odometer readings alongside it.

The period of review: why the number is five

For an individual, and for a small or medium business entity, the ATO can amend an assessment within two years of the day it gives notice of the assessment. For everyone else the window is four years, and where the ATO forms the view that there has been fraud or evasion there is no limit. All of that sits in the table in section 170 of the Income Tax Assessment Act 1936.

The same table carries the change small business accountants have been writing about: a small or medium business entity can apply in the approved form for an amendment up to four years after the assessment, even after the ATO’s own two-year window has closed. More time to fix a return is only worth something if the records to fix it from are still there, and an amendment refreshes the clock, so a corrected return is the one whose records you keep longest.

What changed for 2026-27: the $300 rule is gone

For 2026-27 returns onward, an employee no longer has a $300 no-receipts exception for work-related expenses. The exception, section 900-35 of the Income Tax Assessment Act 1997, and the laundry exception alongside it were repealed by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, commencing 1 July 2026. Every page still saying that claims under $300 need no receipts is describing 2025-26 and earlier.

In their place is a standard deduction of up to $1,000 under section 25-130. An Australian resident who earns what the Act calls assessable labour income (salary and wages, directors’ fees, office-holder pay and similar) can deduct the lesser of $1,000 and that income without spending anything or keeping a record. It is reduced by any actual work-related claims, so a reader whose real work expenses come to $1,400 claims the $1,400 and substantiates all of it, while a reader with $600 of expenses takes the $1,000 and keeps nothing. Income protection premiums and professional association fees sit on top rather than reducing it.

One small-expense rule survives: an expense of $10 or less, where the year’s total of such expenses is $200 or less, can be recorded by you instead of with a supplier receipt, written down as soon as possible afterwards with the details a receipt would carry. Business income is not labour income, so a sole trader keeps every record exactly as before.

Digital records, photos and apps

Digital copies are records. The ATO’s conditions are the ones that apply to paper plus a few for files: the record can’t be alterable, you have to be able to produce it on request, it needs to be exportable to a standard format such as Excel or CSV, and the encryption keys and passwords that open it are part of the record. A scan nobody can open is not a record.

The myDeductions tool in the ATO app records expenses and trips for sole traders and employees, uploads to myTax or emails the records to your agent, and creates a logbook for a sole trader’s car. Whatever you use, photograph thermal receipts the week you get them, since they fade well inside five years.

What happens if you can’t produce a record

The deduction is the first casualty. For an employee’s work expense the statute is explicit: no evidence for the retention period means no deduction, and an assessment that already allowed it can be amended to take it out. For a business, the ATO can only allow what the records show, so the question in a review is “show me”, not “prove it wasn’t”.

For a record a tax law requires you to keep, there is also an administrative penalty of 20 penalty units for failing to keep or retain it. At $364 a unit for infringements from 1 July 2026, that is $7,280. The penalty does not apply to the substantiation documents behind an employee’s work expenses, where losing the deduction is the consequence instead.

A lost receipt is not always a lost claim. A bank statement proves the day you paid, the small-expense record covers anything under $10, and the substantiation rules carry relief for documents lost or destroyed. Before giving up a claim, it is worth checking with your accountant what the rules let you reconstruct.

Where ReturnTax fits

Tax-ready records are the condition for the fixed fee, and the test is whether the year’s income and expenses can be traced, not which software holds them. Tell us what you have and we’ll let you know before any work begins. A sole trader return is $330 with the personal return included, $440 registered for GST.