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Income and allowances

Income and allowance amounts you need to include in your tax return and amounts you don’t include.

Last updated 9 June 2023

Amounts you do and don't include

You must include all the income you receive during the income year as a flight crew, flight attendant and airline employee in your tax return, this includes:

  • salary and wages, including cash or bonus payments
  • allowances
  • compensation and insurance payments – for example, payments made under an income protection insurance policy to replace salary and wages.

Don't include as income any reimbursements you receive.

Allowances

You must include all allowances your employer reports on your income statement or payment summary as income in your tax return.

An allowance is where your employer pays you an amount as an estimate of costs you might incur:

  • to help you pay for a work expense – for example, meal allowance when you travel for work
  • as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, flying allowance
  • as an amount for having special duties, skills or qualifications – for example, first aid qualifications.

Your employer may not include some allowances on your income statement. Find out about declaring income and claiming deductions for Allowances not on your income statement.

Allowances not on your income statement

If you receive an allowance from your employer, it does not automatically mean you can claim a deduction.

Your employer may not include some allowances on your income statement, you will find these amounts on your payslip. You don't need to declare these allowances as income in your tax return, unless you're claiming a deduction. Examples include travel allowances and overtime meal allowances.

If you spend the allowance amount on work expenses, you:

  • don't include it as income in your tax return
  • can't claim any deductions for the work expenses the allowance covers.

If you're not claiming a deduction, you don't need to keep any records of the amounts you spend.

If you spend your allowance on a deductible work-related expense, to claim a deduction you:

  • include the allowance as income in your tax return
  • include a claim for the work expenses you incur in your tax return
  • must have records of your expenses.

If you can claim a deduction, the amount of the deduction is not usually the same amount as the allowance you receive.

Allowances and claiming a deduction

The following table sets out allowances you may receive and when you can claim a deduction.

Allowance types, reason for the allowance and if you can claim a deduction

Reason for allowance

Example of allowance type

Deduction (Yes or No)

Compensation for an aspect of your work that is unpleasant, special or dangerous or for industry peculiarities

Foreign language allowance

Flying allowance

No

These allowances don't help you pay for deductible work-related expenses

An amount for certain expenses

Meal allowance when you travel for work

Yes

If you incur deductible expenses

An amount for special skills

A first aid certificate

Yes

If you incur deductible expenses

 

Example: allowance is assessable income, no deduction allowable

Marie is an employee flight attendant. Marie's employer has appointed her an in-flight trainer. This role requires her to provide in-flight training to trainee cabin crew members.

Marie's employer pays her a training allowance for each week she performs this role. At the end of the income year, Marie's employer shows the total amount of the training allowance on her income statement.

Marie must include the training allowance as income in her tax return.

Marie can't claim a deduction because she doesn't incur any expenses. The allowance compensates her for taking on an additional role. It is not to help pay for any work-related expenses Marie might incur.

End of example

 

Example: allowance is assessable income, deduction allowable

Ben is a flight attendant on international flights. When Ben is rostered on to a shift that requires him to take his major rest break away from home, his employer pays him an allowance for meals. Ben uses the allowance to buy meals during the period he is travelling away from home for work. At the end of the income year, Ben's employer shows the meal allowance on his income statement.

Ben must include the allowance as income in his tax return.

Ben can claim a deduction for the cost of the meals he buys while he is travelling for work.

End of example

Reimbursements

If your employer pays you the exact amount for expenses you incur (either before or after you incur them), the payment is a reimbursement.

A reimbursement isn't considered to be an allowance.

If your employer reimburses you for expenses you incur you:

  • you don't include the reimbursement as income in your tax return
  • can't claim a deduction for the expenses.

Find out about flight crew:

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