Claiming work-related deductions can significantly reduce your taxable income and increase your tax refund. However, it’s important to understand which expenses are eligible, how to calculate your claim, and what records to keep. The Australian Taxation Office (ATO) has clear rules about work-related deductions, and this detailed guide outlines the top deductions you can claim, ensuring you maximise your entitlements while staying compliant.
What Are Work-Related Deductions?
Work-related deductions are expenses you incur in earning your income that you can claim to reduce your taxable income. These expenses must be directly related to your job, not reimbursed by your employer, and supported by records.
Top Work-Related Deductions You Can Claim
1. Vehicle and Travel Expenses
If you use your car or other vehicle for work purposes (excluding commuting between home and work), you can claim related expenses. There are two main methods to calculate vehicle deductions:
- Cents per kilometre method: Claim up to 5,000 work kilometres per year at a fixed rate set by the ATO.
- Logbook method: Keep a detailed logbook for 12 weeks to calculate the business-use percentage of your total vehicle expenses.
Eligible travel expenses include fuel, servicing, repairs, registration, insurance, and depreciation.
2. Work-Related Clothing and Laundry
You can claim the cost of buying and cleaning:
- Compulsory uniforms with a company logo or unique design
- Occupation-specific protective clothing (e.g., high-visibility vests, safety boots)
- Protective equipment such as gloves or goggles
Ordinary clothing, even if worn for work, is generally not deductible.
3. Home Office Expenses
If you work from home, you may claim running expenses such as electricity, heating, cooling, and depreciation on office equipment. There are several methods for calculating these expenses:
- Fixed rate method (67 cents per hour)
- Actual cost method with detailed records
- Shortcut method (temporary, e.g., during COVID-19)
4. Self-Education and Training Expenses
You may claim costs for courses, seminars, textbooks, and stationery directly related to your current job. Travel expenses between your home and place of education can also be deductible in some cases.
5. Tools and Equipment
Tools or equipment you purchase for work can be claimed as a deduction. Items costing less than a threshold amount (currently $300) can be claimed in full in the year of purchase. More expensive items must be depreciated over their effective life.
6. Phone and Internet Expenses
You can claim the work-related portion of your phone and internet expenses. This requires keeping detailed records of calls or data usage related to your job.
7. Union and Professional Association Fees
Membership fees paid to unions or professional associations related to your employment are deductible.
8. Other Eligible Expenses
Depending on your occupation, you may also claim deductions for:
- Overtime meals (under certain conditions)
- Protective items such as sunscreen, hats, and sunglasses for outdoor workers
- Union or professional journals and subscriptions
Record Keeping Requirements
To claim work-related deductions, the ATO requires you to keep:
- Receipts, invoices, or other written evidence for purchases over $10
- Diaries or logs showing the amount of time or distance spent on work-related activities
- Bank statements or credit card slips as supplementary evidence
Keeping accurate and detailed records for at least five years is essential to support your claims in case of an ATO audit.
Common Mistakes to Avoid
- Claiming expenses not directly related to your work
- Claiming for commuting costs between home and work
- Overstating work-use percentages without proper records
- Claiming private or non-deductible expenses
How to Claim Work-Related Deductions
When preparing your tax return, report your deductions under the appropriate sections for work-related expenses. Using the ATO’s online myTax system provides guidance and calculators to assist you.
Conclusion
Claiming the right work-related deductions can reduce your taxable income and increase your refund, but it requires understanding eligibility criteria and maintaining proper documentation. By knowing the top deductions you can claim and keeping detailed records, you can confidently complete your tax return and stay compliant with ATO requirements. When in doubt, consult a registered tax agent or accountant for personalised advice.
