Tax Deductions for FIFO Workers | | Wilson Assoc Chartered Accountants

Tax Deductions for FIFO Workers

Working in a Fly-In, Fly-Out (FIFO) job comes with its own set of challenges for not only your lifestyle but also your tax. Understanding the tax implications empowers you to optimise your tax position. In this article, we look at the typical deductions for FIFO workers.

1. Travel

Generally, travel between home and work is deemed private and not deductible.  FIFO may involve major expenses, all of which are incurred solely and entirely for your FIFO work. And so, it seems to defy common sense that you are denied tax deductions for such expenses.  

And yet that is unfortunately the case, as all travel between your home and the FIFO work site including transport, tolls and airport parking, are categorised as non-deductible private expenses.  

However, exceptions exist for temporary assignments to other locations, such as training sessions, meetings, or seminars and for transporting large items or shifting work sites. Temporary is usually mean a period less than 3 months.

Car expenses for travel between different jobs on the same day or different workplaces for the same employer can also be claimed.

2. Meals

Meals are typically non-deductible private expenses, including meals consumed while on route between home and FIFO work sites. 

There are exceptions for work-related travel outside the regular FIFO arrangement, such as basic meals provided on-site, at meetings and seminars, or meal allowance for overtime and long-distance truck drivers.

3. Phone and Internet Expenses

Deductions are allowed for work-related phone and internet expenses, especially during off periods. If your job requires you to stay connected with your employer during non-working hours, these expenses can be claimed. Likewise, if your work or training requires the use of the internet or home office, these costs are also eligible for deduction.

4. Uniform and Protective Clothing

The cost of purchasing a work uniform is deductible. To be deductible, the uniform must bear your employer’s logo.  Items that can be worn for general outings (ie, without the employer’s logo) such as business dress and suits, socks and shoes, are not deductible. Protective clothing, such as gloves, safety glasses, reflector vests, steel cap boots, and masks, are eligible for tax deductions unless provided or paid for by your employer. Other items such as sun protection equipment like sunscreen, hats, and sunglasses can also be claimed, if required by your job.

5. Tools and Equipment

Deductions for tools and equipment expenses depend on their cost and work-related usage percentage. Tools under $300 can be claimed in full in the one tax year.  Items above $300 cost is claimed over the asset’s useful life, i.e., by way of depreciation.  Where an item is used partly for work, only the percentage of work-related usage can be claimed.

Other Work-Related Deductions

FIFO workers can claim various other work-related expenses on their tax returns including first aid course fees, self-education expenses, and costs associated with compulsory medical assessments or examinations (excluding pre-employment assessments). Additionally, expenses for renewing permits, licenses, and certificates required for work are eligible for deductions.

Non-Claimable Items

Certain expenses are ineligible for FIFO workers tax deductions, including:

•   Costs of flights between home and the workplace

•   Travel costs from home to the departure airport including parking and airfares

•   Expenses for obtaining the first machinery license or ticket

•   Relocation expenses when moving near the workplace

•   Costs related to conventional clothing or pre-vocational courses before employment.

How Wilson & Assoc can help?

At Wilson & Assoc we can help you understand these deductions and stay informed about tax laws that can enable you as a FIFO worker to optimise tax returns, ensuring compliance with regulations while maximising financial benefits.