If you’re a cleaner and you pay tax on a PAYG basis, then it pays to learn what you can claim at tax time if you want to legitimately minimise the tax you have to pay, or maximise your tax refund.
The important thing to remember is in order to claim a deduction for work-related expenses:
- you must have spent the money yourself and weren’t reimbursed
- it must be directly related to earning your income
- you must have a record to prove it.
You can only claim the work‐related part of expenses, which means you can’t claim a deduction for any part of the expense that relates to personal use.
NOTE: The Australia Tax Office has created a downloadable 1-page Cleaners’ Tax Deduction Checklist you can keep and refer back to anytime.
To grab your Free copy, Click Here To Download Your Cleaners’ Deduction Checklist
Here’s a summary of the type of deductions cleaners can normally claim as long as you have proof of your claim:
You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job, or protective clothing that your employer requires you to wear.
This may include an apron or overalls to protect your ordinary clothes from soiling or damage, or gloves or breathing masks to provide protection from chemicals.
You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it, and even if you only wear it for work ‐ eg jeans or shoes.
You can claim a deduction when you:
- drive between separate jobs on the same day – eg traveling to your second job as a waiter.
- drive to and from an alternate workplace for the same employer on the same day – eg traveling to different houses that you clean.
You generally can’t claim the cost of trips between home and work, even if you live a long way from your usual workplace or have to work outside normal business hours – eg night cleaning shifts.
There are limited circumstances where you can claim the cost of trips between home and work, such as where you carry bulky tools or equipment for work – eg an extension ladder used for cleaning windows.The cost of these trips is deductible only if:
- your employer requires you to transport the equipment for work
- the equipment was essential to earning your income there was no secure area to store the equipment at the work location, and
- the equipment is bulky – at least 20kg or cumbersome to transport.
If you claim car expenses, you need to keep a logbook to determine the work‐related percentage, or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
You can claim a deduction for the cost of overtime meals on those occasions where:
- you worked overtime and took an overtime meal break, and
- your employer paid you an overtime meal allowance under an industrial law, award or agreement.
You can’t claim a deduction for the cost of meals eaten during a normal working day as it is a private expense, even if you receive an allowance to cover the meal expense.
Tools And Equipment Expenses
You can claim a deduction for tools or equipment you are required to purchase for your job.
You can’t claim a deduction relating to any private use of the equipment (eg, if you have a vacuum cleaner that is used for private purposes for half of the time you can only deduct 50% of the cost) or if the tools and equipment are supplied by your employer or another person.
If a tool or item of work equipment used for work:
- cost more than $300 – you claim a deduction for the cost over a number of years (depreciation)
- cost $300 or less – you can claim an immediate deduction for the whole cost.
Other Common Deductible Work-Related Expenses
Other expenses you can claim a deduction for include:
- union fees
- the work‐related portion of phone expenses if you have to make phone calls or send texts for work.
What we’ve covered in this post gives you a general summary of what can and can’t ordinarily claim, but knowing about these deductions is only relevant for you after the end of the financial year.
Why Should You Do Your Tax Planning Well Before The End Of The Financial Year?
The reason for getting your tax planning done as early as possible is that once June 30 comes around, you can only record what you’ve done during the year, and then complete your tax return based on that.
Everything has been earned, and the money has usually been spent or invested. There’s not a lot you can do in July to legitimately minimise your tax liability for the previous financial year.
That means you need to decide on a strategy as soon as possible, and then implement the tax planning recommendations your advisor gives you before the 30th of June if you want to legitimately maximise your income and minimise the tax you pay.
When you don’t do this planning, you’re missing a great opportunity when you’re having your tax return prepared. That’s why rather than waiting until the end of the financial year, you should see us to book a planning session as soon as possible.
When you do there’s a very good chance you’ll be able to pay less tax, so you can keep more in your pocket for important things like holidays or travel, your hobbies or other things you want to do, or maybe paying down your home loan to give yourself a savings buffer for the future.
But if you leave it too late, there’s nothing your advisor can really do to help. So even if you are not thinking of moving jobs, changing careers, or retiring right now, it’s never too early to sit down with us and make a plan for your future.
Register For A Complementary Assessment Session
Each month we hold a limited number of complementary Assessment Sessions where you can get to know us, and we get to know about you and what you would like to achieve. Then together we can often come up with clever ways we might be able to help you.
Would you like to join us for one of these sessions?
If you’d like to schedule one of these complementary, obligation free one-on-one sessions, even if you’re just curious and you’re not sure what to do right now let me know by using this contact form or give us a call on 1300740066 and we’ll set things up for you.
I’m really looking forward to meeting with you,
James Huy Vuong
P.S. You really owe it to yourself and your family to maximise your legacy while you’re still working, and saving as much tax as possible is one great way to do that.
Give us a call on 1300740066 to book your Assessment Session now, or let us know by using this contact form and we’ll add you to our calendar.
* This post is a general summary only. For more information, go to ato.gov.au/occupations
* You can use the ATO app myDeductions tool to keep track of your expenses and receipts throughout the year.