Tax deductions: What can I claim on tax?

Work-related deductions are things you've paid for as a direct result of your job – think your work phone, work computer, your uniform or work-related equipment. The Australian Tax Office (ATO) is super specific in its definition of work related deductions, so before you try to claim for things that aren't strictly work-related, know that they will check to ensure that your claims are legitimate.

How do I know if I can claim something as a tax deduction?

You're able to claim something as a tax deduction if:

• The purchase or expense was made in the tax year for which you are claiming the deduction (in other words, it's not an expense from a few years ago)
• The expense was directly related to your employment
• If the expense was related to your employment and also for personal use, you can prove what portion is used for your employment.
• You paid for the expense yourself and it has not been reimbursed by your employer
• You have proof of the purchase, such as receipts or a logbook, to support your claim for all deductions over $300

Expert insight

"The ATO uses data-driven profiles based on things like employment type and financial investments to identify where some people may be pushing the boundaries, and they use highly sophisticated analytics to scrutinise all claims, including those relating to working from home and motor vehicle expenses, income from rental properties, as well as undeclared income from investments like cryptocurrency. Your tax return is your personal responsibility, and you should be as thorough as possible when declaring your income and claiming deductions. Failure to properly declare all of your income, or over-the-top expense claims, may set off alarm bells and your claims could be rejected if you don't have the evidence."

Gavan Ord

CPA Australia spokesperson

What are the things you can claim on tax?

• The cost of using a tax agent
• The cost of travelling to and from your tax agent's office
• Formal education courses related to your field and provided by a professional association
• Work-related seminars
• Journals, magazines and/or books relevant to your field
• The attendance of work related conferences or education workshops
• Tools and equipment necessary to perform your job with success
• Union fees
• Meals purchased while working overtime
• The purchase of protective products needed for the course of your work, such as sunglasses
• Computers and software used in the course of your employment
• Part of your mobile phone bill if you use it for work
• Home office expenses
• The premiums for income protection insurance
• Contributions to your super fund (within the concessional contributions limit)
• The use of your car if you need it to go to various different locations for work (not to travel to your main office)

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What can you claim without receipts ATO?

You generally don't need receipts for some small deductions less than $300. Despite not needing a receipt, you may still need to be able to demonstrate how you've calculated the deduction. The Australian Tax Office can ask for supporting evidence of any deductions made on a tax form. If you're unable to provide receipts or purchase orders the claim could be denied.

If your total claim is equal to or more than $300 you must have proof of the purchase (such as receipts or a logbook) to support it all, not only for the amount in excess of $300. For instance, if you claim $200 worth of self-education expenses and then $250 worth of work-related equipment, in total you're claiming $450, so you will need evidence to support your claims. Those records should be kept for a minimum of five years after the tax form has been lodged

What’s not claimable as a tax deduction?

There are some expenses that you incur during the year that may seem work related, but are not an allowable deduction. These include, but are not limited to the following:

• The cost of obtaining a driver’s license, even if it’s a necessary condition for employment. If the job requires a special driver’s licence, the difference in cost between that and a standard licence may be allowed.
• Vaccinations against diseases that may be contracted through the course of employment.
• Child care expenses are not deductible, although you might be eligible for a child care rebate or child care benefit.
• The cost of commuting to and from work.
• Grooming expenses such as hairdressing and makeup.
• Relocation expenses.
• The cost of a police clearance certificate or police record check.

Still wondering what expenses can you claim?

• How do I claim home office expenses?

  If a part of your employment entails working from home, you are entitled to claim expenses related to any electronic equipment that is necessary to carry out your job responsibilities. This includes computers, printers, work related phone calls, lighting, heating and cooling and cleaning expenses. It is very important that you keep detailed records of all of these expenses including a diary that works out how much you used the space and equipment for work over a representative four week period. Alternatively, you could use the fixed rate method, Ord says – when you can claim a set rate of 67 cents for every hour worked from home. "Having records mean you can choose which works best based on your individual circumstances," he says.

• Are there different tax deductions for different occupations?

  Your expenses as an employee will be unique depending on your chosen occupation, and there are certain allowances made for different fields. For example, certain performing artists may be allowed to claim hairdressing and makeup as a deduction, while a real estate agent may not, even though appearance is also an important component of that occupation. If you're looking for information on a specific occupation, you can find it via the ATO's website.

• Is my car tax deductible?

  Travel to and from work is not a deductible expense, but you may be able to claim travel related to your work if you're using your own vehicle. For example, the cost of driving directly to work is not claimable, however if you need to drive your own vehicle to several sites throughout the day this may be claimable. You'll need to keep a detailed log book if you want to claim these trips. Read our guide on motor vehicle tax deductions for more information.

• Can you claim car parking and tolls as a tax deduction?

  You can not claim car and travel expenses for costs incurred travelling to and from your workplace, as this is classed as private use. This includes parking costs and tolls. However, if you can prove that you are required to drive your car to and from work to carry bulky tools or equipment, you may be able to claim these expenses.

  If you're required to travel from your workplace to other sites, for example to client meetings, this is then classed as work-related travel and you may be entitled to claim parking and toll costs. Remember to keep all receipts and proof in the form of a log book.

• Are parking tickets, fines and penalties tax deductible?

  No, you can not claim parking tickets as a tax expense, even if you were parking for work. Any violation of the law is not tax deductible. However, you may be able to request your employer pay the ticket or reimburse you. This is of course at the discretion of your employer.

• Can I claim my uniform, clothing, laundry and dry-cleaning expenses?

  You can only claim clothing expenses if you can prove they are a required part of your employment, such as a nurse or police officer uniform. It must have a logo and it must be compulsory to wear. In certain circumstances you may be able to claim clothing expenses if it's required to keep you safe, for example protective glasses.

• Can I claim gifts and donations as a tax deduction?

  If you wish to claim a donation or gift as a tax deduction, you must first ensure that the receiving organisation has the status of being a deductible gift recipient (DGR). You also can't receive anything material in return for the donation, and it must be in the form of money or a financial asset (e.g. you can't claim clothes you've donated).

• Are school fees tax deductible?

  No, school fees and school uniforms are not tax deductible. You also can't claim the cost of attending school excursions, tutoring, sports and music equipment or school photos.

• Are medical and health expenses tax deductible?

  In special circumstances, you may be able to claim expenses for disability aids, attendant care or aged care. However, this tax offset is determined by assessing your income and family status. The ATO will determine what tax offset, if any, you're entitled to receive.

• Can I claim expenses from my investments as tax deductions?

  Certain expenses related to the management of your investments may be deducted. For example, any fees you've paid towards the management of your investment can be deducted from your earned income, as can the interest repayments on any money you've borrowed to invest with. Subscriptions to market news and analysis may also be claimed under certain circumstances. You can also claim credits for certain types of income you earn from your investments, such as dividends. You may also like to read our guide on tax deductions for share traders and investors.

• Can I claim self-education expenses?

  If you take a course in order to obtain a formal qualification relevant to your occupation you can deduct a portion of the tuition fees plus certain other expenses related to the class. You need to be able to prove that the course is directly related to your job and will likely result in you increasing your income.

• Is a police check tax deductible?

  In some cases, yes. The initial cost of getting your first check in order to gain your first job in the industry is not deductible. However, if you've already been working in the industry and you're required to get a new check in order to continue your employment, you may be able to claim this.

DISCLAIMER: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information applicability to their own particular circumstances.

Written by

Alison Banney

Editor

Alison Banney is the money editorial manager at Finder. She covers all areas of personal finance, and her areas of expertise are superannuation, banking and saving. She has written about finance for 10 years, having previously worked at Westpac and written for several other major banks and super funds. See full bio

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As an authority on all things personal finance, Sarah Megginson is passionate about helping you save money and make money. She is an editor and money expert with 20 years’ experience and an extensive background in property and finance journalism. Sarah holds ASIC RG146-compliant Tier 1 Generic Knowledge certification, and she's a regular media commentator, appearing weekly on TV (Sunrise, Channel 7 news, Nine news), radio (KIIS FM, Triple M, 3AW, 2GB, 6PR) and in digital and print media. See full bio

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