Taxpayers can claim work-related deductions for some expenses they incur in their individual tax returns. Most of these expenses must be directly related to earning an income as employees or contractors. They may also be able to claim other expenses that don’t directly relate to their employment.

Work-related expenses
To be able to claim a deduction for an out-of-pocket work-related expense, taxpayers must meet the three below criteria:

  1. They must have spent their own money and weren’t reimbursed for the expense by their employer
  2. The expense must be directly related to earning their income
  3. They must have a record to prove it (typically a copy of an invoice or a receipt)

If the expense was for both work-related and personal (e.g., mobile phone use), the taxpayer can only claim a deduction for the work-related portion of the expense.

 Below are some of the most common work-related and other expenses that taxpayers can claim:

  • Car expenses – generally travel between home and work is considered as personal expense and not tax deductible. Only car use for work-related duties may be tax deductible (e.g., an employee is required to drive to Bunnings in their own car to purchase stationery for their employer)
  • Tools and equipment expenses – if an employee purchases tools and equipment to help them earn an income
  • Computer expenses – if a personal computer is required to be used for work purposes (e.g., when required to work from home)
  • Working from home expenses – if an employee is required to work from home, they may be able to claim a deduction for expenses incurred that relate to their work
  • Phone and internet expenses – if an employee uses their own phone and home internet for work-related activities, they may be able to claim for the work-related costs of the expense
  • Self-education expenses – a taxpayer can claim for expenses if the education costs related to an improvement of their skills and knowledge required in their current employment activities
  • Travel expenses – if an employee travels for work and stays away from home overnight, they may be able to claim for the accommodation, meals, and incidental expenses
  • Uniforms laundry and/or dry-cleaning expenses – a deduction can be claimed for the costs of purchasing and cleaning of a work-specific uniform, protective clothing, or a compulsory uniform
  • COVID-19 test expenses – there are strict rules related to being able to claim these tests
  • Union fees and subscription fees (e.g., industry union fees, trade, and professional subscriptions for the employee’s industry)
  • Accountant expenses – costs associated with managing taxpayer’s tax affairs
  • Donations – a taxpayer can claim a tax deduction for gifts or donations to organisations that have the status of deductible gift recipients (DGRs)
  • Income protection insurance
  • Personal contributions Super Funds – a taxpayer may be able to claim a tax deduction for personal super contributions that they made to their super fund from their after-tax income. Before they can claim a deduction for their personal super contributions, they must give their super fund a Notice of intent to claim a deduction for personal contributions and receive an acknowledgment from that fund. There are other eligibility criteria that must be met.
  • Interest – a taxpayer can claim a deduction for expenses they incur in earning dividends or other investment income.
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