It's 2017-2018 FY tax time and that means a lot of people will be confused about what they can and can't claim as legitimate expenses on their tax returns. So as an industry leader in the area of tax and compliance, we thought we'd put together a quick list of ins and outs across the more common work sectors.
It's not a complete list, but it will give you answers to many of your claim questions. For anything more complex, you should book a time with one of our Peak Advisors.
- You can’t claim the cost of conventional 'everyday' clothing worn at work, such as suits and other business wear. Clothing specific to the legal profession, such as the robes and wigs worn in court by barristers, are deductible.
- The cost of a handbag or briefcase is claimable if you need it for work purposes, such as carrying paperwork or a laptop. Your claim needs to be reasonable however; a Louis Vuitton handbag might not be absolutely necessary for work!
- Annual practicing certificates for professionals such as lawyers can be claimed.
- If you work from home from time to time, you can claim a deduction for home office expenses. You can claim either $0.45 per hour or a proportion of your actual costs, based on a diary of work use.
- If you travel as part of your work, you can claim the costs of your work-related journeys such as the cost of visiting clients or suppliers. If you use your own car, either claim $0.66 per km, up to a maximum 5,000 kms (for 2017-18 FY), or keep a logbook and claim your actual expenses. You can also claim for parking, tolls and public transport if you don’t use your car.
- The cost of entertaining clients isn’t tax deductible.
- You cannot claim the cost of club fees, even if you use your membership as a means of networking or meeting clients.
- Your professional indemnity insurance costs are claimable.
Tax tips for retail workers
- If you’re required to wear a uniform at work, the cost is deductible - but not if you wear conventional clothing. Some retail workers in fashion stores are required to wear clothing from the particular store or brand they are employed by; but those garments are still classed as conventional clothing, so are not deductible.
- If you spend time working from home – for instance preparing staff rosters at the weekend for the week ahead – you can claim a proportion of home running costs, either based on actual costs (in which case you’ll need receipts) or at a standard rate of $0.45 per hour.
- Claim a deduction for the cost of any work-related courses. That could include health and safety or first aid courses, management training or job-related courses such as a Certificate III in retail.
- If you travel between stores, you can claim the cost of travel from one work location to another. That could include any time you spend temporarily working from a different store to your regular workplace (perhaps providing holiday cover) as well as trips between stores delivering stock.
Tax tips for education and training workers
- Annual teacher registration fees are deductible.
- Claim the costs of references books or a professional library for the subject/s you teach.
- Prizes that you purchase to reward the achievements of your students and encourage future performance are claimable.
- Stationary, art materials, stopwatches and computer consumables including pens and toner cartridges are all deductible.
- Depreciation on technology costing more than $300, such as computers, laptops, tablets, mobile phones and printers (items less than $300 can be written off immediately).
- Teacher aids.
- Conferences and courses linked to your teaching can be claimed, including associated costs such as travel and textbooks.
- If you mark homework or prepare lessons whilst at home, you can claim home office expenses such as a proportion of internet costs and the associated costs of any technology you use such as computers and printers; as well as a portion of your utility bills.
- If you pay for school excursions out of your own pocket and aren’t reimbursed, the costs are claimable. This can include meals, transport and accommodation costs.
Tax tips for construction and manufacturing workers
- You can claim the cost of any tools or other work-related equipment that you’re required to buy for your job. You can claim an immediate deduction for any tools costing up to $300. Anything more expensive than that needs to be depreciated over the life of the tool.
- You can also claim a tax deduction for the cost of insuring tools and interest charged on finance taken out to buy tools and equipment.
- You may be able to deduct your expenses for buying and maintaining your uniform if you’re required to wear one and it has the businesses logo on it. Conventional clothing like a plain shirt that you could wear at another job or outside work would not qualify. A shirt bearing your employer’s name would qualify. The cost or protective items such as helmets, ear muffs, safety goggles, sunglasses, sun hats and sunscreen can also be claimed.
- Trade union fees can be deducted.
- The cost of renewing any professional licences, registrations or subscriptions are claimable.
- The cost of self-education courses run by a University or TAFE (such as an apprenticeship course), provided the course relates to your current job.
- You can claim for overtime meal expenses up to the amount actually spent where you have received a genuine overtime meal allowance under an industrial law, award or agreement.
Tax tips for healthcare and social workers
- If you’re required to wear a uniform as part of your role, the cost is deductible.
- You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage - eg. laboratory coats, aprons etc.
- Protective clothing, such as non-slip shoes, are deductible.
- Claim for conference expenses. Also claim the cost of the conference itself, that can include travel, meals and accommodation costs – even where the conference is overseas. You may need to apportion the costs (and disallow any personal component) if you spent downtime on the beach or sightseeing afterwards!
- Claim for professional subscriptions, whether to a professional body like the AMA or to a trade union.
- If you’re required to work overtime, you can claim for the cost of buying meals provided you have been paid an allowance by your employer.
- Agency costs: if you get your work through an agency, the cost is claimable.
- Many health care workers will need to use their own car as part of their job. That can include transporting patients, travelling between patients' homes or travel from one medical facility to another; all such journeys are potentially claimable.
One final word
Keep a record of everything you buy for work. If you can’t prove that you spent money related to your work, you can’t claim it. So keep all your receipts and invoices - or better still scan and record them in the Receipt Manager section of our mobile app.
If you’ve lost a receipt, try to get a copy from the supplier or retailer. Also, keep your bank or credit card statement to clearly identify item purchases - that might help if you don't have a receipt or invoice. Lastly, don’t try to claim something if you don’t have sufficient evidence of the purchase; you’re potentially leaving yourself open to an audit by the Australian Tax Office.