Work Related Deductions
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D1 – Car expense:
- You can claim at this item your work-related expenses for using a car that you owned, leased or hired (under a hire-purchase agreement).
- You cannot claim at this item any expenses relating to motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as utility trucks and panel vans.
- You cannot claim at this item any expenses relating to a car owned or leased by someone else, including your employer or another member of your family. However, we consider you to be the owner or lessee of a car and eligible to claim expenses where a family or private arrangement made you the owner or lessee even though you were not the registered owner. For example, you can claim for a car that was given to you by another member of your family and which, although it was not registered in your name, you used as your own and for which you paid all expenses.
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There are 2 methods to calculate your car expenses:
- Cents per kilometre: Your claim is based on a set rate for each business kilometre. You can claim a maximum of 5,000 business kilometres per car, per year. You do not need written evidence, but you need to be able to show how you worked out your business kilometres.
- Logbook: Your claim is based on the business use percentage of the expenses for the car. Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs. To work out your business use percentage, you need a logbook and the odometer readings for the logbook period. You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year. You need written evidence for all other expenses for the car.
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D2 – Travel expenses:
- Travel expenses include the following:
- Public transport, air travel and taxi fares.
- Bridge and road tolls, parking fees and short-term car hire.
- Meal, accommodation and incidental expenses you incur while away overnight for work.
- Expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as utility trucks and panel vans.
- Actual expenses, such as petrol, repair and maintenance costs, that you incur to travel in a car that is owned or leased by someone else.
- If your employer provided a car for your or your relatives’ exclusive use (including under a salary sacrifice arrangement) and you or your relatives were entitled to use it for non-work purposes, you cannot claim a deduction for work-related expenses for operating the car, such as petrol, repairs and other maintenance. This is the case even if the expenses relate directly to your work. However, you can claim expenses such as parking, bridge and road tolls for a work-related use of the car. Parking at or travelling to a regular workplace is not ordinarily considered to be a work-related use of the car.
- Travel expenses include the following:
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D3 – Clothing, laundry and dry-cleaning expenses:
- D3 basically includes the following:
- protective clothing
- uniforms
- occupation-specific clothing
- laundering and dry-cleaning of clothing listed above
- You can claim the cost of a work uniform that is distinctive (such as one that has your employer’s logo permanently attached to it) and it must be either:
- A non-compulsory uniform that your employer has registered with AusIndustry (check with your employer if you are not sure), or
- A compulsory uniform that can be a set of clothing or a single item that identifies you as an employee of an organisation. There must be a strictly enforced policy making it compulsory to wear that clothing at work. Items may include shoes, stockings, socks and jumpers where they are an essential part of a distinctive compulsory uniform and the colour, style and type are specified in your employer’s policy.
- Occupation-specific clothing which allows people to easily recognise their occupation (such as the checked pants a chef wears when working).
- Protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include fire-resistant clothing, sun protection clothing, safety-coloured vests, non-slip nurse’s shoes, steel-capped boots, gloves, overalls, aprons, and heavy duty shirts and trousers (but not jeans).
- You can also claim the cost of renting, repairing and cleaning any of the above work-related clothing only.
- You cannot claim the cost of purchasing or cleaning plain uniforms or clothes, such as black trousers, white shirts, suits or stockings, even if your employer requires you to wear them.
- D3 basically includes the following:
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D4 – Self-education expenses:
- This claim is about self-education expenses that are related to your work as an employee, and that you incur when you do a course to get a formal qualification from a school, college, university or other place of education.
- To claim a deduction for self-education expenses, you must have met one of the following conditions when you incurred the expense:
- The course maintained or improved a skill or specific knowledge required for your then current work activities.
- You could show that the course was leading to, or was likely to lead to, increased income from your then current work activities.
- Other circumstances existed which established a direct connection between the course and your then current work activities.
- You cannot claim a deduction for self-education for a course that:
- Relates only in a general way to your current employment or profession.
- Will enable you to get new employment.
- You cannot claim any deductions against government assistance payments, including Austudy, ABSTUDY and youth allowance.
- If, when you incurred your expenses you satisfied the conditions necessary to claim a deduction, you can claim the following:
- Your tuition fees payable under FEE-HELP – FEE-HELP provides assistance to eligible fee-paying students, who are not supported by the Commonwealth, to pay tuition fees. Your tuition fees payable under VET FEE-HELP – VET FEE-HELP provides assistance to eligible full-fee paying students doing vocational education and training (VET) accredited courses with an approved VET provider. Your tuition fees payable under VET Student Loans – VET Student Loans provide assistance to eligible full-fee paying students doing vocational education and training (VET) accredited courses with an approved VET provider.
- Self-education expenses you paid with your OS-HELP loan – OS-HELP is a loan to cover expenses for eligible Commonwealth supported students who wish to study overseas towards their Australian higher education award.
- The cost of your meals and accommodation during temporary overnight absences from home to participate in self-education.
- Your other expenses such as textbooks, stationery, student union fees, student services and amenities fees, course fees, and the decline in value of your computer (apportioned depending on private use and use for self-education).
- Expenses for your travel in either direction.
- You cannot claim contributions you, or the Australian Government, make under HECS-HELP or repayments you make under the Higher Education Loan Program (HELP), the Student Financial Supplement Scheme (SFSS), the Student Startup Loan (SSL), the Trade Support Loans Program (TSL) or the Vocational Education and Training Student Loan (VSL).
- Union fees and subscriptions to trade, business or professional associations.
- Overtime meal expenses, provided that:
- you received a genuine overtime meal allowance from your employer that was paid under an industrial law, award or agreement
- you purchased and consumed a meal during your overtime
- you have included the amount of the meal allowance as income at item 2, and
- if your claim was more than $31.25 per meal, you have written evidence, such as receipts, that shows the cost of the meals. (An amount for overtime meals that has been included as part of your normal salary and wages – for example, under a workplace agreement, is not an overtime meal allowance).
- Professional seminars, courses, conferences and workshops.
- Reference books, technical journals and trade magazines.
- The work-related portion of tools and equipment and professional libraries; you may be able to claim an immediate deduction for an item that cost $300 or less, otherwise, you claim a deduction for the decline in value of an item over its effective life; for more information, see Guide to depreciating assets 2020.
- The work-related portion of items that protect you from the risk of injury or illness posed by your work or your work environment, such as hard hats, safety glasses and sunscreens, and other protective items you buy and use at work where your employment duties require you to have physical contact or be in close proximity to customers or clients (but not protective clothing and footwear, which you claim at item D3).
- The work-related portion of the following costs:
- interest on money borrowed to buy a computer
- repair costs for the computer
- the decline in value of the computer (you may need to make a balancing adjustment if you no longer own or use the computer and you previously claimed a deduction for its decline in value; for more information, see Guide to depreciating assets 2020)
- internet access charges
- phone calls
- phone rental if you can show you were on call or were regularly required to phone your employer or clients while away from your workplace
- the decline in value of your home office furniture and fittings
- home office heating, cooling, lighting and cleaning costs
- Voluntary gifts of $2 or more made to an approved organisation.
- A net contribution of more than $150 to an approved organisation for a fund-raising event (see Special circumstances and glossary 2020 for further conditions).
- Contributions of $2 or more to:
- A registered political party
- An independent candidate in an election for parliament
- An individual who was an independent member of parliament during 2019–20 or in limited circumstances had been an independent member.
- Approved organisations include:
- certain funds, organisations or charities which provide help in Australia
- some overseas aid funds
- school building funds
- some environmental or cultural organisations
- You can also claim a deduction for:
- a donation to an approved organisation of shares listed on an approved stock exchange valued at $5,000 or less
- a donation to a private ancillary fund
- entering into a conservation covenant
- Your receipt will usually indicate whether or not you can claim a deduction for the gift. If you are not sure, you can check with the organisation. If you are still not sure, go to www.abn.business.gov.au or phone us to find out whether the organisation is an approved organisation.
- Employees who make donations under salary sacrifice arrangements are not entitled to claim an income tax deduction for the donation on their own tax return.
- You cannot claim a deduction for a gift or donation if you received something in return (for example, raffle tickets or dinner) except in certain fund-raising events.
- Expenses you incurred in managing your tax affairs, including fees paid to a recognised tax adviser for doing your tax return.
- Costs of applications made to the Administrative Appeals Tribunal or appeals to the courts about your tax affairs (litigation costs).
- An interest charge the ATO imposed on you.
- Amounts ATO charged you for underestimating a varied goods and services tax (GST) instalment or pay as you go (PAYG) instalment.
- Expenses for complying with your legal obligations relating to another person’s tax affairs.
- You incur an expense in the income year when:
- you receive a bill or invoice for an expense that you are liable for and must pay
- you do not receive a bill or invoice but you are charged and you pay for the expense