ATO Receipt Requirements: What Every Australian Business Needs to Know (2026)

Written evidence (a receipt, invoice, or similar document) is required once your total claimed deductions exceed $300 for the year. Below that, you still need to show how you calculated your claim, but formal receipts aren't mandatory.
The $300 exception doesn't cover car, meal, award transport, or travel allowances, which have their own substantiation rules.
Digital copies count. The ATO accepts photos or scans of receipts, provided they're a true and clear reproduction of the original.
Keep records for 5 years from when you lodge, longer if the record relates to a depreciating asset, a capital gain, or a loss carried into future years.
If you're registered for GST, claiming a GST credit on a BAS needs a valid tax invoice for any purchase over $82.50, a separate and stricter rule from the $300 income-tax threshold.
The ATO's own myDeductions tool, in the ATO app, is a free way to log receipts digitally. It's a solid starting point; it just stores everything locally on your device, so you're responsible for backing it up.

The Australian Taxation Office (ATO) requires written evidence, typically a receipt or invoice, for any work-related or business deduction claim once your total claims for the year exceed $300. That evidence needs to show the supplier's name, the amount, the nature of the goods or services, and the date. Digital photos or scans are accepted as long as they're a true and clear copy of the original, and you generally need to keep that evidence for 5 years.

If you're a sole trader or small business owner getting ready to lodge before the October 31 deadline, that's the short version. Below is what each part of that actually means, where the exceptions are, and how to stay on top of it without a shoebox full of paper.

What counts as written evidence for the ATO

"Written evidence" is the ATO's term for proof that an expense actually happened the way you say it did. In practice, this is a receipt, a tax invoice, or a similar document, and it needs to show:

The name of the supplier
The amount of the expense
The nature of the goods or services
The date the expense was incurred

A bank or credit card statement on its own usually isn't enough, because it shows that money left your account, not what you bought or why it was work-related. Keep the statement as a backup, but keep the actual receipt or invoice too.

The $300 substantiation exception, and its limits

You don't need formal written evidence for every expense. If your total claimed deductions for the year are $300 or less, you don't need receipts, but you do need to be able to explain how you arrived at the amount you're claiming.

Two things trip people up here:

The $300 is a total, not a per-item threshold. Once your combined claims go over $300, you need written evidence for the full amount, not just the portion above $300.
The exception doesn't apply to everything. Car expenses, meal allowances, award transport payments, and travel allowances each have their own substantiation rules, separate from the general $300 exception.

If you expect your total deductions to land anywhere near $300, the safer habit is to just keep every receipt. It costs you nothing and saves you from guessing later.

GST credits and BAS: a different threshold

If you're registered for GST, your BAS runs on a separate rule, and it's stricter. To claim a GST credit on a purchase of more than $82.50 (including GST), you need a valid tax invoice, not just any receipt.

For purchases of $82.50 or less, you don't need a formal tax invoice. A cash register docket, a regular receipt, or an invoice is enough. If you genuinely have none of those, a diary note recording the supplier's name and ABN, the date, what you bought, and the amount will do.

A few things worth knowing before your next BAS:

An invoice with incorrect or incomplete details isn't a valid tax invoice, though small gaps can sometimes be filled in from other documents the supplier gives you.
If a supplier hasn't given you a tax invoice, you can ask for one. They have 28 days to provide it.
Wait until you actually have the valid tax invoice before claiming the GST credit, even if that pushes the claim into your next BAS period. Claiming it early on the strength of a verbal agreement or a quote isn't substantiation.

Don't confuse this with the $300 income-tax threshold above. They're two different rules, for two different purposes, with two different dollar lines. A lot of small business owners assume one number covers both, and it doesn't.

Digital receipts and the ATO's record-keeping rules

You don't need a shoebox of paper. The ATO accepts images of paper records, photos or scans, saved on a digital storage medium, as long as the digital copy is a true and clear reproduction of the original.

A few practical points that follow from this:

Once a receipt is digitised properly, you can generally get rid of the physical copy, unless another law specifically requires you to keep the original.
If you type the numbers from a receipt into a spreadsheet or your accounting software instead of keeping the receipt itself, that's not enough. The ATO still wants the actual document, digital or paper, as the source record.
A blurry photo where the amount or supplier name isn't legible doesn't meet the "clear reproduction" standard. If you can't read it, neither can an auditor.

This is also where most small businesses get stuck in practice: receipts don't show up in one place. Some arrive as email attachments, some as texted photos, some as PDFs from an online order. Keeping all of them organized and legible, in one place, is the actual work behind "just keep your receipts."

How long to keep business receipts for the ATO

The standard retention period is 5 years, generally counted from the date you lodge the return the record relates to. For most everyday business receipts, that's the number to plan around.

A few situations extend that:

Amended assessments. If the ATO amends your assessment, you need to keep the related records for the standard 5 years plus the new review period that follows the amendment.
Records used across multiple returns. If something in a record, like a carried-forward loss, affects more than one year's return, keep it until the review period for the last year it was used in has closed.
Depreciating assets and capital gains. Keep records for as long as you own the asset, plus 5 years after you dispose of it.

If none of those apply to you, 5 years from lodgment is the rule of thumb. Set a calendar reminder, because "I'll remember" is how records get deleted a year too early.

A free way to start: the ATO's myDeductions tool

Before looking at any paid option, it's worth knowing the ATO already gives you a free way to do this. myDeductions, built into the ATO app, lets individuals and sole traders photograph receipts and invoices, log work trips and vehicle mileage, and record business income and expenses as they happen.

At tax time, you can email your records to yourself or your tax agent, or upload them directly to help pre-fill your return. It's a genuinely useful habit if you're currently doing none of this digitally. If you'd rather compare dedicated apps built for this, our roundup of receipt apps for Australian small businesses covers the BAS- and GST-ready options.

The catch is that myDeductions stores everything locally on your device. There's no automatic cloud backup, so the ATO itself recommends backing up your data to a separate location regularly. For a sole trader with a handful of expenses a month, that's a manageable manual step. For a business where receipts arrive by email from a dozen different suppliers, or where several people are buying things on the business's behalf, manually photographing and backing up every document becomes its own job.

Where manual tracking breaks down, and how Receiptor AI fits in

Most Australian small businesses don't lose receipts because they're careless. They lose them because receipts arrive everywhere: a supplier emails an invoice, a tradie texts a photo of a fuel receipt, an online order sends a PDF confirmation. Chasing all of that into one legible, dated, ATO-compliant record is the part that eats time, not the filing itself.

Receiptor AI is an AI agent that automates that collection step. It monitors your email inboxes automatically, so receipts and invoices that arrive as attachments or order confirmations get extracted the moment they land, without you forwarding anything. A mobile scanner lets you text a photo of a paper receipt from your phone, and it gets captured the same way. Every document keeps its original image alongside the extracted data, which is exactly what meets the ATO's "true and clear reproduction" standard, rather than just a line item typed into a spreadsheet.

From there, Receiptor AI can sync extracted receipts and invoices to Xero or QuickBooks, or export them as PDF, ZIP, or CSV when you or your tax agent need them at lodgment time. It won't tell you whether a specific expense is deductible under Australian tax law; that's a conversation for your tax agent or a look at the ATO's own guidance. What it does is make sure the documents backing up your claims are captured, legible, and still there when you need them in five years.

If you're currently relying on a drawer of paper receipts or a phone camera roll, that's the gap worth closing first, whether you do it with the ATO's own myDeductions tool or with something built for a business that receives more documents than one person can manually photograph. For the broader picture of keeping expenses organized year-round, see our guide to setting up a chart of accounts for small businesses and our breakdown of the best expense tracking software for small businesses.

This article is general information, not tax advice. For guidance specific to your situation, speak with a registered tax agent or check the current rules at ato.gov.au.

Do I need a receipt for every business expense?

Only once your total claimed deductions for the year exceed $300. Below that combined total, you still need to be able to explain how you calculated the claim, but a formal receipt isn't mandatory. Above $300, you need written evidence for the full amount claimed, not just the amount over the threshold.

Does the ATO accept a photo of a receipt instead of the paper copy?

Yes. The ATO accepts digital images of paper receipts, provided they're a true and clear reproduction of the original. Once a receipt is properly digitised, you generally don't need to keep the paper copy unless another law specifically requires it.

How long do I need to keep business receipts in Australia?

Generally 5 years from the date you lodge the return the receipt relates to. That period can extend if the ATO amends your assessment, if the record is used across multiple tax returns, or if it relates to a depreciating asset or a capital gains tax event.

Is a bank statement enough proof for a tax deduction?

Usually not on its own. A bank or credit card statement shows that a payment was made, but not what was purchased or why it was work-related. Keep the actual receipt or invoice alongside your statements.

Do I need a tax invoice to claim GST credits on my BAS?

Yes, for any purchase over $82.50 including GST. For purchases of $82.50 or less, a cash register docket, receipt, or invoice is enough, and a diary entry with the supplier's details can substitute if none of those are available. This is a separate, stricter rule from the general $300 income-tax substantiation threshold.