What Tax Deductions Can PAYG Taxpayers Claim?

If you’re an employee and you pay tax on a PAYG basis, then it’s important to know 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 series of downloadable 1-page Tax Deduction Checklists you can keep and refer back to anytime. You’ll find links to download a Free copy of the ATOs’ Checklist for your job or profession at the end of this post.

For now, here’s a summary of the type of deductions you can normally claim as long as you have proof of your claim:

Car Expenses

You may be able to claim a deduction when you:

  • drive between separate jobs on the same day – eg you drive for two separate employers
  • drive to and from an alternate workplace for the same employer on the same day, for example travelling between depots

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.

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. 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.

Check the ATOs’ Checklist for your job or profession below for full details.

Phone And Internet Expenses

You may be able to claim phone and internet usage if your employer needs you to use your personal devices for work. You can only claim the work-related portion of the use of your personal device.

Check the ATOs’ Checklist for your job or profession below for full details.

Travel Expenses

You may be able to claim a deduction for travel expenses if you are required to travel overnight, for example travelling to a remote area, provided the cost was incurred while carrying out your work duties.

This could include meals, accommodation, fares and incidental expenses that you incurred and your employer has not provided or reimbursed you.

* Receiving a travel allowance from your employer does not automatically entitle you to a deduction. You still need to show that you were away overnight, you spent the money yourself, and the travel was directly related to earning your income.

You can’t normally claim accommodation expenses if you sleep in your truck or your employer provides you with accommodation. Check the ATOs’ Checklist for your job or profession below for full details.

* Circumstances may be different for FIFO workers *

Clothing Expenses

You may be able to claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job – or the environment you work in – or protective clothing that your employer requires you to wear, for example steel-capped boots.

You can’t normally claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if you only wear it to work and even if your employer tells you to wear it – e.g. standard jeans, drill shirts and trousers.

Check the ATOs’ Checklist for your job or profession below for full details.

Tools And Equipment Expenses

You may be able to claim a deduction for tools or equipment you are required to buy for your job. If you also use the tools or equipment for private purposes, you can’t claim a deduction for that use. For example, if you have a tool set that you use for private purposes half the time you can only deduct 50% of the cost.

If the tools or equipment are supplied by your employer or another person, you can’t normally claim a deduction. If a tool or item of work equipment you only used for work:

  • cost more than $300 – you can claim a deduction for the cost over a number of years
  • cost $300 or less – you can claim an immediate deduction for the whole cost

Check the ATOs’ Checklist for your job or profession below for full details.

Self Education Expenses

You may be able to claim a deduction for self-education expenses if your course relates directly to your current job, for example a course in working with children with special needs.

You can’t normally claim a deduction if your study is only related in a general way or is designed to help you get a new job, e.g. you can’t claim the cost of study to enable you to move from being a teacher’s aid to being a teacher.

Check the ATOs’ Checklist for your job or profession below for full details. Check the ATOs’ Checklist for your job or profession below for full details.

Home Office Expenses

You may be able to claim a percentage of the running costs of your home office if you have to work from home, including depreciation of office equipment, work-related phone calls and internet access charges, and electricity for heating, cooling and lighting costs.

If you are required to purchase equipment for your work and it costs more than $300, you can claim a deduction for this cost spread over a number of years (depreciation).

You may also be able to claim the cost of rates, mortgage interest, rent and insurance. Check the ATOs’ Checklist for your job or profession below for full details.

Check the ATOs’ Checklist for your job or profession below for full details.

Other Common Deductible Work Related Expenses For Some Jobs & Professions

As long as the expense relates to your employment, you may be able to claim a deduction for the work-related portion of the cost of the items below, depending on your job or profession:

  • protective equipment such as sunglasses, sunhats and sunscreens
  • restraining ropes
  • excursions, school trips and camps
  • first aid courses
  • seminars and conferences
  • teaching aids
  • technical or professional publications
  • union and professional association fees

What we’ve covered in this post gives you a general summary of what you may and may not be able to ordinarily claim depending on your job or profession, but knowing about these deductions is only relevant for you after the end of the financial year.

Check the ATOs’ Checklist for your job or profession below for full details.

Download Your Occupations’ Tax Deduction Checklist Below

To download your Checklist, click on the appropriate link below, enter your best email address into the form that pops up, and we’ll send the PDF Checklist straight to your inbox. If you don’t see your profession or occupation here, you might find it listed on the ATO’s website at https://www.ato.gov.au/occupations

Click Here To Download The Deduction Checklist For Cleaners

Click Here To Download The Deduction Checklist For IT Professionals

Click Here To Download The Deduction Checklist For Medical Professionals

Click Here To Download The Deduction Checklist For Nurses

Click Here To Download The Deduction Checklist For Office Workers

Click Here To Download The Deduction Checklist For Police

Click Here To Download The Deduction Checklist For Public Servants

Click Here To Download The Deduction Checklist For Real Estate Professionals

Click Here To Download The Deduction Checklist For Teachers

Click Here To Download The Deduction Checklist For Tradies

Click Here To Download The Deduction Checklist For Truck Drivers

Click Here To Download The Deduction Checklist For Defence Force Personnel

Click Here To Download The Deduction Checklist For Flight Attendants

Click Here To Download The Deduction Checklist For Hospitality Workers

Click Here To Download The Deduction Checklist For Miners

Click Here To Download The Deduction Checklist For Retail Workers

Click Here To Download The Deduction Checklist For Sales And Marketing Professionals

Click Here To Download The Deduction Checklist For Construction Workers

ATO Guidelines For Claiming Work Related Expenses

The ATO’s has also created Tax Deduction Guidelines for claiming specific expenses. To download your copy of the ATO’s Guidelines, click on the appropriate link below, enter your best email address into the form that pops up, and we’ll send the PDF Checklist straight to your inbox.

Click Here To Download The Tax Deduction Guidelines For Car Expenses

Click Here To Download The Tax Deduction Guidelines For Clothing And Laundry Expenses

Click Here To Download The Tax Deduction Guidelines For Employee Working From Home Expenses

Click Here To Download The Tax Deduction Guidelines For Gifts And Donations

Click Here To Download The Tax Deduction Guidelines For Renting Out A Room

Click Here To Download The Tax Deduction Guidelines For Self Education Expenses

Click Here To Download The Tax Deduction Guidelines For Travel Expenses

Tax Tips For Rental Property Owners

Owning an investment property can give you additional expenses to claim. The ATO has prepared a short Guide covering some tax-smart tips investment property owners should be aware of. To grab your copy, click on the link below, enter your best email address into the form that pops up, and we’ll send the PDF Tax Tips Checklist straight to your inbox. Click Here To Download Tax-Smart Tips For Your Investment Property

Tax Tips For Small Business Owners

And if you have a small business, here’s a Checklist prepared by the ATO that looks at topics such as record keeping, income, expenses and deductions, deductions for employers, tax concessions, and what to do after you lodge your tax return. Click Here To Download The Small Business Tax-Time Tips Checklist

The ATO have also released a Small Businesses Q&A Guide that answers many of the most common questions business owners have at tax time.  Click Here To Download The ATO Small Business Q&A At Tax Time

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,

Warm regards,

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.

Posted on 31/10/2018 in Tax Deductible Expenses, Tax Planning

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