Deduction List
The ATO allows deduction for work-related expenses incurred to earn income, provided that you have spent the money, were not reimbursed, and have detailed records. The most common deductions are for home office expenses, vehicle/travel costs, union fees, and professional subscriptions.
Accommodation
Normally, accommodation expenses are private and not deductible. Accommodation expenses can only be deductible if you:
- Are travelling for work;
- Sleep away from your home overnight for work, and; and
- Pay for the accommodation expenses yourself (and aren’t reimbursed by your employer).
However, you can’t claim a deduction for accommodation expenses you incur if you choose to stay overnight at a location that is closer to your usual workplace, or if you are living at a location away from your home.
See more:
- Overnight travel expenses
- Taxation Ruling TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-fromhome expenses.
Agents and Agency Fees
This includes, for example, talent agents, employment agents, recruitment agents, modelling agents, and booking agents.
You can’t claim a deduction for upfront costs of joining or using the services of an employment and recruitment agency or an agent to get work. This is because the expense is incurred before you start the employment.
If your employment contract allows for the renegotiation, review or extension of the contract, the costs of doing so will be an allowable deduction. Such expenses are incurred in gaining your employment income.
Annual Practising Certificates, Professional Memberships and Accreditations
You can claim a deduction for the cost of renewing an annual practising certificate, membership or accreditation if you need it to work in your field.
These can include trade licences for plumbers, electricians and carpenters; crane, hoist and scaffolding licences for construction workers; responsible service of alcohol and gaming licences for hospitality workers; and registration for nurses, teachers and doctors.
However, if you’re required to have a practising certificate, professional membership or accreditation before you can be employed in an occupation, the initial cost of obtaining it isn’t deductible. This is because you incurred the expense to enable you to start your employment, not during the course of your employment.
You can only claim a deduction if the expense is related to your current employment.
Bags and Cases for Work Items
This also includes, for example, briefcases, laptop bags, luggage and handbags.
If you use a bag or a case to carry items for work, you are entitled to a deduction to the extent that it is used for work purposes. Work items include laptops, tools, client briefs, and protective gear but don’t include private or domestic items like gym gear, food, or a personal phone or tablet. Your job must require you to transport work items, and the bag must be suitable for that purpose.
If the bag or case costs you $300 or less, and you use it for work only, you can claim a deduction for the whole cost in the year you purchase it. Otherwise, you can claim a deduction for the decline in its value over its effective life.
If you use a bag or case to carry both work and private items, you need to apportion the expense between work-related and private use, and you can only claim the work-related portion.
