Basic Rules for Claiming Work Expenses

Rules for claiming work expenses

To claim a deduction for work expenses:

–   you must have spent the money yourself and were not reimbursed by your employer.

–   the expense must be directly related to earning your income.

–   you must have a record to prove the expense.

The expense must not be private, domestic or capital in nature. For example, the costs of normal travel to and from work, and buying lunch each day are private expenses.

–   When incurring expenses that are both work-related and private, you can claim a deduction only for the work-related portion of the expense.

–   If you incurred an expense that was capital in nature, you may be able to claim a deduction for the decline in value of the depreciating assets you acquired. See Decline in value of a depreciating asset.

–   For expenses incurred for services paid in advance, see Advance expenditure to decide what part of the expense is deductible in 2020–21.

You cannot claim a deduction for an expense if:

–   someone else paid the expense, or

–   you were, or will be, reimbursed for the expense, or

–   the payment or reimbursement is a fringe benefit (including an exempt benefit).

If you were partially reimbursed for the expense, you can only claim the part that was not reimbursed.


Record keeping requirements

You must have written evidence to support your work expense claims if the total amount of deductions is greater than $300.

It is worth noting that this written evidence must prove the total amount, not just the amount over $300. However, the $300 does not include car, meal, transport and travel allowance expenses, which are subject to special documentation rules as explained in the next section.

If your total expense claim is under $300, you need to be able to show how you worked out your claims, but you do not need to keep the receipts.



If you received an allowance, you can claim a deduction for the allowance but only if:

–   you actually incurred those expenses in producing your employment income, and

–   the basic rules discussed on the previous page are satisfied.

For more information, visit Claiming Deductions on the ATO website or talk to our friendly team at Wilson & Assoc Chartered Accountants.

Source: ATO

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Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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