Your Work-Related Tax Deduction Checklist For This Year’s Tax Return Made Easy
Tax | 05 10th, 2022|

The end of the financial year is coming up next month (30 June), and you may be looking for ways in which you could make tax savings in this year’s tax return. This could be through tax deductions, expenses that you could make now for your work purposes or even with tax offsets introduced by the government. Whatever your tax situation, we’re equipped and ready to help you navigate the tricks and traps of income tax returns.

Upon completing a tax return, individuals are entitled to claim deductions for expenses that are directly related to their income. These can come in a variety of forms, but must usually be work-related to be claimable. 

There are three requirements individuals must meet to be able to claim a work-related deduction:

  • the individual must have spent their money and not be reimbursed for it
  • the expense must be related to their job and;
  • there must be a record, like a receipt, to be able to prove it.

If an expense was for work and private purposes, individuals can claim a deduction for the work-related portion.

Here are some common types of deductible expenses taxpayers like employees and rental property owners can claim this financial year:

Home Office Expenses

The past year may have seen you working more from home or remotely than ever before, and setting up a home office may have incurred a number of additional expenses. Some of the expenses that you may be able to claim as tax deductions include

  • Phone and internet expenses
  • Computer consumables (such as printer paper and ink) and stationery
  • Home office equipment (such as computers, phones, printers, furniture, etc). 

With home office equipment, you may be able to claim either:

  • the full cost of the items (if less than $300 in value) or 
  • The decline in value (also known as depreciation) for items over $300.

Unless you meet very specific requirements, you probably will not be able to claim for home expenses, such as mortgage interest, rent and rates, or the cost of general household items. 

If you plan to use the temporary ATO approved ‘shortcut method’ (80 cents per hour for all additional running expenses) to claim your deductions, you cannot claim any other expenses for working from home for that period. If you purchased a desk to use when working from home for example, you cannot claim a deduction for that separately as it is covered by the 80 cents per hour work rate. The deadline for this method of calculation is 30 June 2022 (unless it is extended). 

Clothing Expenses

Individuals can make a claim for work-related clothing expenses including compulsory, non-compulsory and registered uniforms, occupation-specific and protective clothing, and expenses associated with work-related clothing, such as dry cleaning, laundry and repair expenses.

Self-education Expenses

Individuals can prepay self-education items before the end of the income year, including:

–        course fees (not HECS-HELP fees), student union fees and tutorial fees

–        stationery and textbook purchases

Other Work-related Expenses

Individuals can prepay the following expenses before 1 July 2022:

–        union fees

–        seminars and conferences

–        subscriptions to trade, professional or business associations

–        subscriptions to magazines and newspapers

If you are looking for assistance in working out potential expenses that you could incur prior to the end of the financial year, have queries about your claims or just want to prepare for 30 June 2022, start a conversation with us now. We are tax planning professionals ready and willing to help. 

 

Car Parking Benefit Readdresses FBT Definition, Employers To Benefit
Tax | 04 18th, 2022|

It’s getting closer to the time that FBT returns need to be lodged, so it’s important to understand that there may be a change to the FBT liability of your business when it comes to one employee benefit.

Car parking as an FBT benefit is provided on a particular day when, between 7.00am and 7.00pm:

  • a car is parked at a work car park for the minimum parking period;
  • an employee uses the car in connection with travel between their place of residence and primary place of employment at least once on that day;
  • the work car park is located at or in the vicinity of the primary place of employment, on that day;
  • a commercial parking station is located within a one-kilometre radius of the work car park used by the employee;
  • the lowest representative fee charged by any commercial parking station for all-day parking within a one-kilometre radius of the work car park exceeds the car parking threshold;
  • the parking is provided to the employee in respect of their employment, and
  • the parking is not excluded by the regulations.

However, a car parking benefit provided in respect of an employee is exempt where:

  • the car is not parked at a commercial parking station;
  • the employer is not a public company or a subsidiary of a public company;
  • the employer is not a government body; and
  • for the income year ending before the start of the FBT year, the employer’s assessable income is less than $10 million or alternatively, it is a ‘small business entity’ (SBE)

Redefining a ‘commercial parking station’ to revisit a prior concept associated with the application of fringe benefits tax may make the perks of coming into the office a little more appealing to employees.

FBT applies to parking provided by employers to their employees where there is alternative parking available commercially available.

Prior to the recent ruling, there was a previous understanding that car parks that effectively charge penalty rates for all-day parking (to encourage shorter stays) would not represent genuine alternative parking arrangements for commuters, and should not trigger FBT liabilities as a result. However, the recent ruling has overturned this, which means that any alternative paid parking would trigger the liability.

This ruling came into effect on 1 April 2022.

This recent ruling on how car parking is treated as an FBT liability should assist in reducing the potential FBT burden on some employers (which should assist them in turn in incentivising employees back into the workplace with benefits).

Other FBT benefits that employers may be able to claim back on in their FBT return could include COVID-19 related benefits (such as office equipment, technology, etc), company cars, meals, entertainment, living away from home allowances, and more. As a result of the impact

If you need assistance with preparing your FBT return for lodgement, consult with a professional as soon as possible so that we can assist you with preparing your return.

COVID Deductions Rely On Work-Related Purposes (So Here’s What You Might Be Able To Claim)
Tax | 03 28th, 2022|

People across different industries may have different items for work that they can claim a deduction on their tax returns for, but this season may see a few common occurrences across individual tax returns for 2022.

On your individual tax return this year, you may notice a few expenses pertaining to COVID-19-related purchases, such as masks, hand sanitisers and RATs tests that you may be able to claim (depending on your circumstances). These deductions may have specific conditions and requirements that must be met, and failure to comply may result in the Australian Taxation Office disallowing these claims.

Masks and hand sanitiser are claimable deductions for those who have required them to work in their industry (e.g. retail, hospitality, education). This is because they can be claimed as PPE (Personal Protective Equipment), but they must be directly connected to how you earn your income (for example, many State governments mandated at various points last year that hospitality workers were required to wear masks while working). If your place of employment did not provide this PPE to you, and you had to purchase it yourself, it may be claimable.

Rapid Antigen Tests (RATs) however, must be purchased for a work-related purpose. There have been plans to specifically allow deductions for Covid-19 tests such as RATs by the Government to be claimed on individual tax returns.

This legislation is scheduled to be introduced on 1st July to specifically address this, but a COVID-19 RAT test can still be claimable if it is for a work-related purpose. This is the critical point to understand. It is a claimable deduction in this instance because it has been purchased for a work-related reason, or to be able to attend your place of work.

When claiming a deduction, it is important that you keep accurate records (such as receipts) to provide evidence of your purchase, and that these purchases weren’t reimbursed by your employer. If they were reimbursed, you will not be able to claim it back.

If you were working from home during 2021, you may be able to claim back some of the expenses related to this. One of the ways that you may be able to do so is through the ‘shortcut method’. This method allows you to claim 80 cents per hour for each hour worked from home (from 01 March 2020 to 30 June 2022). Importantly though, this includes everything – you don’t need to make other claims for work from home items such as phone, internet, stationery or furniture/equipment depreciation separately.

Depending on your circumstances, choosing the wrong method means you could cheat yourself out of big dollars on your tax return. Discuss your situation with your trusted tax agent so that you can understand what exactly is required from you in the lead up to tax return time.

Common GST Mistakes That You Might Be Making In Your IAS
Tax | 03 7th, 2022|

GST is an area that commonly has mistakes made in it – mistakes that can be costly and require additional measures to correct it if they aren’t caught in time.

Many small business owners continue to make errors when claiming GST credits in their GST returns or Business Activity Statements.

A vast majority of these errors are easily avoidable and often relate to the over-claiming of GST credits. Here are the top ten common GST mistakes that can be made (and what you might be encountering yourself).

  • Residential rental property: Incorrectly claiming GST credits on expenses relating to residential rental properties where the entity is registered for GST.
  •  Bank fees: Generally, annual fees, monthly fees and loan establishment fees are input-taxed, and therefore, there is no GST to claim. However, GST is charged on credit card merchants’ fees and can be claimed.
  • Private expenses: GST is not claimable on private expenses such as personal loans, director fees and drawings etc.
  •  Interest: Interest paid on loan or chattel mortgage repayments or credit card payments does not incur GST, and cannot be claimed.
  • The total cost of a business insurance policy: Insurance policies usually include stamp duty (which is GST-free), however, the rest of the policy is subject to GST. A GST credit cannot be claimed on the stamp duty portion of the policy as no GST is paid.
  • Government fees: GST is not charged on government fees i.e. council rates, land tax, ASIC filing fees, motor vehicle registration and water rates, and therefore, GST credits cannot be claimed.
  • GST-free purchases: Incorrectly claiming GST credits on purchases without GST, such as basic food items, exports and certain health services is a common mistake. Remember not all suppliers are registered for GST, so check the tax invoice before claiming a credit.
  • Entertainment expenses: Claiming the entire GST credits on entertainment expenses where the business has elected to use the 50/50 split method for fringe benefits tax is incorrect. Only 50 per cent of the GST credits can be claimed.
  • Wages and superannuation payments: Both wages and super do not attract GST and cannot be claimed. Wages are not an expense to be included in G11; they are to be reported in W1 in your BAS. Superannuation is not included in BAS.
  • Sole traders and partnerships: When claiming expenses that are used for both private and business use, you must apportion the expenditure to exclude private usage.

If you find that a mistake was made on a previous activity statement, the ATO says you are able to:

  • correct the error on a later activity statement if the mistake fits the definition of a “GST error” and certain conditions are met;
  • lodge an amendment – the time limit for amending GST credits is 4 years starting from the day after the taxpayer was required to lodge the activity statement for the relevant period, or
  • contact the ATO for advice.

If you find this process is too time-consuming or too difficult to complete yourself, the best way to ensure that you remain compliant and avoid making these mistakes is to contact a registered BAS agent for assistance.

End Of FBT Year Is Approaching – Do You Know What Benefits You’re Giving Your Employees?
Tax | 02 14th, 2022|

As a part of your employees’ employment contracts, do they receive benefits such as a car space, gym membership or even a car to drive?

These are what’s known as fringe benefits, which is a ‘payment’ to an employee that takes a different form to salary or wages. This incurs a specific kind of tax separate from income tax known as fringe benefits tax, which is based on the taxable value of the fringe benefits provided. FBT applies even if the benefit is provided by a third party under an arrangement with the employer.

Knowing what is and what isn’t deemed as a fringe benefit will assist you in working out what you might provide to your employees as a benefit for working with you.

Examples Of Items That Are Fringe Benefits

  • Allowing an employee to use a work car for private purposes
  • Giving an employee a discounted loan
  • Paying an employee’s gym membership
  • Providing entertainment by way of free tickets to concerts
  • Reimbursing an expense incurred by an employee, such as school fees
  • Giving benefits under a salary sacrifice arrangement with an employee.

Examples Of Items That Are Not Fringe Benefits

The following are not fringe benefits:

  • Salary and wages
  • Shares purchased under approved employee share acquisition schemes
  • Employer contributions to complying super funds
  • Employment termination payments (including, for example, the gift or sale at a discount of a company car to an employee on termination)
  • Payment of amounts deemed to be dividends under Division 7A
  • Benefits provided to volunteers and contractors
  • Exempt benefits such as certain benefits provided by religious institutions to their religious practitioners.

Employees don’t have to worry about paying the tax on these items, but it is an area of concern that employers need to be careful of. Employers must self-assess their FBT liability for the FBT year (which ends 31 March) and lodge an FBT return.

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. However, there are ways in which you may be able to reduce your liability when it comes to FBT.

These methods include:

  • providing benefits that are income tax-deductible
    • If your employee is given a benefit that they could otherwise have claimed themselves.
  • using employee contributions
    • If your employees contribute to the cost of the FBT themselves through cash payment to the provider of the benefit, the taxable value of the fringe benefit can be reduced by that amount
  • by providing a cash bonus
    • If you provide your employee with a cash bonus instead of a benefit you won’t have to pay FBT, and the employee will pay income tax on the amount.
  • providing benefits that are exempt from FBT.

FBT exemptions can sometimes be changed by the Australian Taxation Office (ATO), which can affect your FBT liability.

One such change was the FBT Retraining & Reskilling Exemption. Under this change, if you are an employer who is providing to their employees who are redundant (or soon to be made redundant) a benefit that encompasses training or education.

The exemption can be applied to retraining and reskilling benefits provided on or after 2 October 2020. This exemption is not to be included in your 2022 FBT return or in your employee’s reportable fringe benefits amount. If you have already lodged your 2021 FBT return though and paid any FBT owing, you can amend your 2021 FTB return to reduce the FBT paid for retraining and reskilling that is exempt.

It’s advisable to consult with a tax agent (such as us) if you need to amend an FBT return (as we are equipped with the tools and skills to negotiate what can be a tricky area filled with complexities and traps). Now’s the best time to speak with us about your FBT liability, what you might need to include in your return and more. Start a conversation with us today.

Business Activity Statements – How To Take The Sting Out Of The Quarterly Payment
Tax | 01 24th, 2022|

Been hearing a lot about business activity statements, and feeling more than a little pressure?

Kicking off the new year for your business shouldn’t be shrouded in the darkness that can be a looming BAS. But how can you be certain that your business is prepared?

To start with, demystifying the BAS might alleviate some of that anxiety and pressure your business may have been facing. Essentially, a business activity statement (BAS) is a government form that all businesses must lodge to the Australian Tax Office (ATO). All businesses registered for GST need to lodge a business activity statement (BAS). This can be done with the assistance of a registered tax agent or BAS agent.

A BAS is a summary of all the business taxes you have paid or will pay to the government during a specific period of time. You may lodge your BAS monthly, quarterly or annually (depending on the size of your business you may not have the annual or quarterly option) or may do so through your tax/BAS agent.

When lodging your BAS, you need to include these payments within it:

  • Goods and services tax (GST)
  • Pay as you go (PAYG) income tax instalment
  • Pay as you go (PAYG) tax withheld
  • Fringe benefits tax (FBT) instalment
  • Luxury car tax (LCT)
  • Wine equalisation tax (WET)
  • Fuel tax credits

A BAS is issued by the ATO either monthly or quarterly. A form needs to be lodged with the ATO and payment made to the ATO by the due dates as follows:

  • For monthly BAS: within 21 days of the end of the month on the form
  • For quarterly BAS:
    • Quarter July – September: Due 28 October
    • Quarter October – December: Due 28 February
    • Quarter January – March: Due 28 April
    • Quarter April – June: Due 28 July

(as registered tax agents we are given an extension to most of these deadlines)

You may instead be eligible to submit an Instalment Activity Statement (IAS). In the IAS, the ATO tells you every quarter what your GST instalment amount is and where applicable your PAYG instalment amount is.  Essentially, the IAS is a form that is similar to the BAS, but simpler in that you do not have to be concerned about GST and some other nominated taxes.

Businesses that are not registered for GST and individuals who are required to pay PAYG instalments or PAYG withholding (such as self-funded retirees) use this form to pay PAYG.

IAS provides a little more flexibility in the arrangement as the instalments are advised by the ATO on what you need to pay to cover your liabilities.

You may be able to vary those amounts if you feel that the advised instalments are too much or not enough to cover your liabilities. You may also be able to pay the amount in one lump sum at the end of the year. Before changing the amount due, or the timing of the payment, it’s best to consult with us (or your registered BAS agent) for additional advice to suit your circumstances.

Preparing For Your BAS

Your IAS and BAS can be used to assist in monitoring your business finances. Though you only need to lodge these every quarter, waiting until the due date to get all of the information you require for the statements may cause you to miss out on critical observations (such as how much you may actually owe the ATO).

Daily tracking of your income and expenses can assist in calculating your GST and other liabilities on your BAS, and allows you to ensure that there won’t be any nasty surprises waiting for you.

Here are some tips on how you can prepare for your BAS or IAS this quarter

  • Get everything up to date (such as your accounting software), and ensure that all of your bank feeds are imported, allocated and reconciled.
  • If you are completing the BAS yourself, ensure that the reports from your accounting software are printed off every week – this should give you an estimate of what you would have to pay if your BAS was due right away.
  • Check that your bank account for your business has enough money in it to cover your BAS payment.
  • Create a profit and loss statement after printing your BAS reports to show you how much money has been made in the week (or month) to date
Can Christmas Parties Be Tax-Deductible?
Tax | 12 6th, 2021|

While your business may not necessarily be planning an extravagant bash after the events of this year, a Christmas party may be on the menu for your hard-working employees.

Planning out your Christmas party in a COVID-safe manner with a little knowledge of the tax deductions you might be able to claim back can make the giving a little sweeter this year.

The Venue

You can take advantage of the $300 (including GST) minor benefit and exemption rule to hold a Christmas function for your current employees and their spouses. To do so, the party would need to be held on the premises of the business, and during a business day. If your costs are below $300 per person, FBT will not be incurred but you will not be able to claim tax deductions or GST credits.

However, if you provide benefits to your employees over $300, it will incur fringe benefits tax (FBT). This means if the Christmas party that you hold is priced at over $300 per person (for the cost of food and drink consumed by employees and spouses) at your in-house party, you will incur and need to pay FBT on the expenses of your employee’s spouse or family members only.

If the party is being held at a restaurant or venue, you will not need to pay FBT if the costs remain under $300 as it is considered a minor benefit. If the costs rise to over $300, you will need to pay FBT for your employees, their spouses and their family.

Transportation

You may also choose to provide your employees with transportation to the Christmas party. Taxis provided to an employee will attract FBT unless the travel is to or from the employee’s place of work. If the party is held off-premises and you pay for your employee to travel by taxi to the venue and to their home after the event, only the first trip is FBT exempt.

The second trip may be exempt under the minor benefits exemption if you adopt its meal entertainment on an actual basis.

You can also provide other types of transportation to the venue, such as buses. These costs will form a part of the total meal entertainment expenditure and will be subject to FBT. If the threshold is not breached, then it may fall under the minor benefits exemption.

What About Meal Entertainment?

If your Christmas party does not include recreation, you may choose the value of food, drink, associated accommodation or travel as ‘meal entertainment’. This allows staff to pay less tax by claiming meals and drinks consumed in a restaurant/cafe or provided at a social gathering.

The taxable value of the meal entertainment can be made using a 50:50 method, 12-week method or actual method.

  • 50:50 method – a 50:50 split where the taxable value is 50% of your total expenditure when providing entertainment to your employees, associates or clients during an FBT year.
  • 12-week method – involves tracking the taxable value of each individual fringe benefit, and is based on the percentage of meals and entertainment provided to employees as registered in a log for a 12-week representative period.
  • Actual method – best used when the exact number of attendees at the majority of meals and entertainment provided or the total value of all meals and entertainment during the FBT year based on actual expenditure.

Want to know more about how you can make this merry time of the year more tax-friendly to your business? Consult with us about how we can make your Christmas parties and employee benefits work for your tax.

What Happens To My Tax If I Have More Than One Job?
Tax | 11 18th, 2021|

Are you in the process of getting a second job to supplement your income? Or have you already received one, and are now simply confused about what you are being taxed on?

Gaining employment in a second position or job means that you may have a higher amount of tax withheld from your pay. Though this might sound daunting, it is simply because you are already claiming the tax-free threshold from another paying job.

The tax-free threshold in Australia is $18,200. If you are claiming your tax-free threshold, you are not paying tax on the first $18,200 earned in each income year. The tax-free threshold is equivalent to earning:

  • $350 a week
  • $700 a fortnight
  • $1,517 a month

Withholding tax at a higher rate means that you are less likely to have a tax debt at the end of the income year

You may be receiving pay from two or more payers at the same time if you:

  • have two or more jobs
  • have a regular part-time job and receive a taxable pension or government allowance.

In these instances, your new employer will give you a Tax file number declaration to complete. Centrelink is also a payer who will give you this form if you apply for their payments.

When you fill in this form, you can choose whether to claim the tax-free threshold from your employer. However, if you are:

  • Still earning income from your first employer, you should not claim the tax-free threshold for your second job
  • No longer earning any income (including from paid leave), then you are entitled to claim the tax-free threshold from your second job and have a lower rate of tax withheld
  • Starting to receive income from both employers, you can request that one employer withholds at a higher rate to avoid a tax debt at the end of the year.

If you are in the position of having two jobs, it is recommended to claim the tax-free threshold from the payer who usually pays the highest salary or wage. Your other payers then withhold tax from your income at a higher rate, which is known as the no tax-free threshold rate. This is likely to reduce incurring a tax debt at the end of the financial year.

Sometimes the total tax withheld from all sources may be more or less than the amount you need to meet your end of year tax liability. These tax withheld amounts are credited to you when you lodge your income tax return. If too much tax is withheld, it may result in a tax refund. However, if not enough tax was withheld, the difference may need to be paid to the Australian Taxation Office (ATO) so that you have paid enough tax for your income.

Confused, concerned or a little perplexed about what having a second job could mean for your tax obligations? Want to know more about what happens if the tax withheld isn’t enough? You can speak with a registered tax agent like us about your tax liability in the event of a second job.

Rent Concessions, Property & Commercial Enterprises – What Do You Need To Know Tax-Wise?
Tax | 11 1st, 2021|

Over the last 12 months, there have been many notable schemes promoted by state and federal governments to assist businesses and individuals with much-needed tax relief. Numerous relief schemes have been put into place to assist those with rent relief for their businesses.

Rent is a major business expense. It is one that many businesses across the country have often had to face in one way or another.

To address the issues that many businesses faced with lockdowns and cashflow issues as a result, some businesses were eligible to apply for rent concessions as a result of the impact of COVID-19, which could be as either a waiver or as a deferral.

Waiver

In the event that a waiver is the available rent concession, the tenant no longer needs to pay the amount of rent that has been waived.

Deferral

The tenant is still required to pay the amount of rent deferred, but the amount can be paid at a later stage (in the event that the ruling of the rent concession is as a deferral on payment).

Tenants who receive rent concessions from their landlords and landlords who give rent concessions to commercial tenants need to be aware of the difference between payments that are waived and deferred. Getting the two wrong can be costly, as rent payments are often a significant impact on the cash flow of a business. Missing payment due to a misunderstanding of the rental concession type you may have been afforded could be detrimental.

Property and tax is a tricky subject that goes beyond these rent relief measures and concessions. As the schemes start to dial back, it’s important to remember that tax and your dealings with property is an ongoing conversation you may need to revisit and reacquaint yourself with.

If you own, lease or rent a property that is used for business purposes (whether commercial, such as a shop or an office, or even your own home) you need to be aware of the tax implications and obligations that you will have to fulfil.

If you are in possession of a property that is used in such a manner, you:

  • must include any rental income in your tax return
  • can claim deductions for some property expenses
  • will be liable for capital gains tax on any capital gain if you sell the property
  • may have GST obligations and entitlements.

In your dealings with property, you will also likely have additional tax obligations, including those relating to one-off transactions (such as the buying, selling, leasing or developing of property).

This could result in the Australian Taxation deciding that those one-off transactions should deem you as conducting an enterprise. If the turnover from these activities is more than the GST registration turnover threshold (what you are allowed to bring in before reaching a limit), you may be required to register for GST.

Ensure that your tax obligations and consequences are met by consulting with us. We are equipped with the knowledge to assist you. You can also enquire about potential tax concessions surrounding rent and property with us, as there may be more available to you and your business than you might think.

Retail Workers & Tax – Here’s What You Need To Know
Tax | 10 4th, 2021|

In spite of the many challenges that have faced many industries across the country during COVID-19’s persistence and ongoing effects, the retail industry through their continued, adapted operations has continued to progress.

As a result, retail workers across many stores may find that the taxable income from their work may have been affected by the changed situation. This may be a result of additional income, less income, or stagnation of their taxable income as a result of stand-downs, business closures or a forced pause in their operations.

No matter the situation though, retail workers will still need to ensure that all of their taxable income has been accurately reported and lodged in their tax returns.

If you are a retail worker earning your income or have earned your income in the industry over the course of the previous year, you will need to know:

  • What income and allowances you may need to report
  • What can and cannot be claimed as a work-related deduction
  • What the records are that you may need to keep track of

This information may be applicable to income earned in the 2020-21 financial year, or to income earned over the next year.

Income and Allowances That You May Need To Report

On the 30th of June, you should have received an income statement or payment salary that shows what you have earned as a retail worker throughout the year. This should include your salary, wages or allowances for that income year.

You should include all of the income that you received during the year in your tax return, regardless of when you earn it.  This may include:

  • Any salary or wages that you may have earned as income.
  • Any bonuses that may have been earned during the year.
  • Any allowances that you may have received to compensate for an aspect of your work or to help to pay for certain expenses when you have travelled for work.

Allowances can also be if an employer pays you based on an estimated amount of what you might spend (e.g. paying cents per kilometre if you use your car for work). It may also be for the actual amount spent on the expense before or after the expense is incurred.

You may receive allowances

  • For work that may be unpleasant, special or dangerous
  • In recognition of holding special skills, such as a first-aid certificate or
  • To compensate for industry peculiarities, such as work on public holidays.

Your employer may not include some allowances on your income statement or payment summary but may include them on your payslips. These can include travel allowances or overtime meal allowances (as paid per industrial law, award or agreement).

If that allowance isn’t on your income statement or payment summary and you spend the entire amount on deductible expenses, it should not be included in the tax return as income or claimed as a deduction. If you spent more than what was your allowance, you include the allowance as income in your tax return and can claim a deduction for your expense.

If your employer pays for the expenses that you occur exactly, that payment is considered a reimbursement. This is not included or considered to be an allowance, and as such, cannot be included as income in your tax return or claimed for a deduction.

Deductions That You May Be Able To Claim

If you are a retail worker looking for claimable deductions that may specifically apply to your profession, you need to:

  • Have spent the money, and were not reimbursed for the work-related expense
  • Have proof that the expense directly relates to earning your income
  • Have a record that proves the expense was incurred (a receipt is usually acceptable).

You can only claim a deduction for the work-related portion of an expense. You can’t claim a deduction for any part of an expense that is not directly related to earning your income or that is private.

Some of the deductions that may be eligible as deductions for retail workers include:

    • Car expenses – if you drive between separate jobs on the same day, or drive to and from an alternate workplace for the same employee on the same day.
    • Clothing expenses – the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job, or protective clothing that your employer requires you to wear.
  • Meal expenses – the cost of overtime meals on the occasions where you worked overtime and took an overtime meal break and your employer paid you an overtime meal allowance.
  • Self-education expenses – if your course relates directly to your current job.
  • Seminars and conferences
  • Technical or professional publications
  • Union and professional association fees
  • Phone and internet usage if your employer needs you to use your personal devices for work.

Record-Keeping Tips

Always keep proof of any expenses that you may have incurred for which you want to claim deductions. This is usually a receipt but can be another form of written evidence (such as an invoice). Those records must show what you purchased, when, where, and how much you spent. They must be in English

There are a few exceptions to the rule. These include small expense receipts, hard to get receipts, overtime meal expense receipts and travel and meal expense receipts. These have special rules and conditions that you need to follow if attempting to claim on these.

If you would like further assistance or information on how you can handle your tax return as a retail worker for this current financial year or for last year’s return, you can speak with us. We can assist you in the process, and make sure that your tax return is lodged correctly.

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