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Tax deductions

What can I claim?

The most common personal tax deductions claimed in Australia are salary sacrifice, work-related expenses that you pay out of your own pocket, self-education for your work, home office, business travel expenses, and charity donations. Tax deductions effectively reduce your taxable income, and therefore the amount of tax you’re required to pay.

If you intend on claiming tax deductions ensure you have all your receipts or, in some cases, make sure you can show how you arrived at your calculations.

Things to claim on tax

Click on the links below to find out ways you could claim on tax:

Tax tips

  • Always keep your receipts for work-related expenses, no matter how small
  • Back up electronic receipts in case you lose your data or emails
  • Only claim things that have not been reimbursed by your employer
  • If an item or service is used partly for private purposes, only claim the proportion used for work
  • If in doubt, seek advice from an accountant or tax specialist
  • Don’t forget to claim the costs of preparing your tax return, such as tax accountant fees.

Tips for claiming super as a tax deduction

  • Most working people can claim a tax deduction for voluntary contributions to their super over and above the compulsory super paid by employers.
  • To assess your potential tax benefit, use the Add extra to super calculator.
  • There are two ways to gain your tax deduction – you can salary sacrifice or pay the extra directly into your super and claim a deduction.
  • Salary sacrifice means your contribution is taken out of your salary before tax is calculated. Salary sacrificing offers an immediate deduction – most other tax deductions only kick in when you put in your tax return.
  • If you choose to pay direct into super yourself you will need to notify your super fund that you want to claim the contribution when you lodge your return, using the ATO form.

Salary sacrificeReduce your taxes straight away

Home office expenses checklist

  • Office equipment less than $300
  • Depreciation on equipment above $300
  • Furniture
  • Postage
  • Printing and stationery
  • Phone calls and internet use (always keep a record of these)
  • Electricity and gas expenses (a proportion)
  • Home insurance (a proportion)
  • Water (a proportion)
  • Rent (a proportion)
  • Cleaning costs (a proportion)

The proportion is based on the percentage of your property the home office takes up.

Tips for home office tax deductions

  • To claim home office expenses, you need to do at least part of your work from home.
  • If you intend claiming for an actual home office, the general rule is that it must be a dedicated room used expressly as an office, unless you’re willing to make substantiated calculations on the amount of time you use the space exclusively for work.
  • If you spend a significant amount of time working from home, it is advisable to have an expert tax accountant help you with your tax return to ensure you’re getting all the deductions you are entitled to.
  • Also be aware that claiming a home office in your primary residence can attract Capital Gains Tax if you sell your home.

Tips for tax deductible charity donations

  • In Australia, donations above $2 to many not-for-profit organisations are tax deductible.
  • These include:
    • Registered charities
    • Registered political parties
    • Tax-exempt religious organisations.
  • Keep all donation receipts, including ones sent electronically via email or website response.
  • You can only claim donations, for which there is no chance of getting something in return. Therefore, things like entry into a raffle or tickets to a charity dinner are not tax deductible.
  • To be tax deductible, the organisation must be recognised by the ATO as a deductible gift recipient (DGR).

Self-education expenses checklist

  • Course or tuition fees
  • Books, journals and subscriptions
  • Student amenity or union fees
  • Stationery and printing
  • Internet and training software
  • Study-related travel (but not from home to your course).

Tips for self-education tax deductions

  • You can often claim the cost of self-education, such as professional development courses.
  • To be deductible, your self-education must be designed to keep your skills up to date, or learn new skills that relate to your current job.
  • Generally, education courses required to start a new career are not tax deductible – only ones that help you progress in your existing job.

Travel expenses checklist

Note, travel expenses between your home and your workplace are usually not deductible.

  • Taxi from your place of work to a meeting, work function, airport, train station etc.
  • The cost of flights, as well as other fees charged by airlines
  • Train fares and other transport costs
  • Car hire, tolls and petrol
  • Accommodation
  • Meals while away on business
  • The cost of laundry services while away on business.

Tips for travel tax deductions

  • Some work-related travel can be tax-deductible if you paid for the travel yourself and were not reimbursed or compensated by your employer.
  • Travel relating to your rental property is also not deductible nowadays.

Tips for claiming motor vehicle expenses

  • If you use your car for work-related activities, you are generally able to claim a deduction for part of the cost of running your car.
  • Travel from your home to your place of work is usually not regarded by the ATO as a work-related activity.
  • You can claim vehicle expenses if:
    • You carry bulky tools or equipment required as part of your employment and it is unsafe to leave them at your work.
    • You travel from your workplace to other sites, meetings, conferences etc.
    • You’re delivering or collecting items for work.
    • You’re travelling from your home to a work-related destination that’s not your normal place of work.
    • You’re an itinerant worker.
  • There are two ways to claim:
    • The logbook method, which requires you to keep a record of all the costs associated with running your vehicle for at least a12-week period. This can include fuel, oil and coolant, insurance, servicing, and depreciation etc. You can only claim the business proportion of these costs.
    • The cents per kilometre method, which allows you to claim a set amount per kilometre up to 5,000 . You don’t need to keep as stringent records as the logbook method, but you do still need to be able to justify how you worked out your total kilometres.
  • You can’t claim:
    • Travel from home to your normal place of work
    • Vehicle expenses that are part of a salary sacrifice scheme
    • Expenses you’ve been reimbursed for.
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