Self-employed expenses: what you can deduct from your profit

Costs wholly for the business come off your profit before tax; private-use costs only in part. What counts, what never does, and what a deduction saves.

As a sole trader you pay tax on profit, not on sales. Every allowable cost you record reduces the profit, and so reduces income tax, USC and PRSI. The test is whether the cost is for the business; Revenue lists what can and can't be claimed.

Costs you can deduct

• Goods bought for resale, and materials used in the work.
• Wages paid to employees.
• Rent and bills for business premises.
• Running costs and lease payments for vehicles and machines used in the business.
• Accountancy fees, business insurance, bank charges, software and advertising.
• Interest on money borrowed for the business.
• Costs before you started trading, such as preparing a business plan, under the pre-trading rules.

Costs you can't

• Your own pay or drawings.
• Clothing, other than protective clothing.
• Business entertainment.
• Your own food and travel, except as Revenue's travel and subsistence rules allow; commuting doesn't count.
• Equipment, vans and other capital items. Instead you claim capital allowances (writing the cost off over several years), usually 12.5% of the cost a year for 8 years.

Business and private use

For a phone, car or home you also use privately, claim only the business share, and keep a note of how you worked it out. Working from home, that might be the share of rooms used only for work during working hours, applied to light, heat and broadband.

What deductions are worth

A single designer with €60,000 of income in 2026 who claims these:

That is 47.2% of what was claimed, the combined rate of income tax, USC and PRSI on the top slice of profit. Tax falls from €15,075.32 to €11,943.47.

On the return

Expenses go in the trading panel of Form 11, by category. If you are registered for VAT, enter costs without the VAT you reclaim. Keep receipts and records for six years.

To see what your own expenses save, use the self-employed expenses calculator. For the whole picture, see self-employed tax.

Work it out

• Self-employed expenses and what they save →
• Sole trader tax return →
• Mileage and subsistence: what's tax-free →

Sources

• Revenue: Claiming a deduction for expenses (business and private use, what can't be claimed) (checked 16/10/2026)
• Revenue: Tax and Duty Manual Part 11-00-01: cars, capital allowances and lease or hire payments (checked 24/10/2026)
• Revenue: Earned Income Credit (checked 25/10/2026)
• Revenue: Form 11 2025: Tax Return and Self-Assessment (checked 24/10/2026)
• Revenue: Tax and Duty Manual Part 38-03-17: keeping records (s.886) (checked 20/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.