Rules for claiming work expenses
To claim a deduction for a work expense:
• 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.
• If you incurred an expense that was 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.
• If you incurred an expense 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.
Your records must prove the total amount, not just the amount over $300. 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.
About Wilson & Assoc
Wilson & Assoc Chartered Accountants provides taxation and business advisory services to individuals, investors and businesses wherever you are based. We provide specialist services to startups and health care providers.
If we can help in any way, we’d like to hear from you.
Information provided on this website is general information only and should not be treated as professional advice. You may not rely on the basis of currency or accuracy of the information. We disclaim liability to all persons or organisations for any loss or damage suffered as a result of such reliance. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.