Amounts you do and don't include
You must include all the income you receive during the income year as a factory worker 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.
Your income statement or payment summary will show all your salary, wages and allowances for the income year.
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, tools and equipment
- as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, handling hazardous materials
- 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 have receive.
Allowances and claiming a deduction
The following table sets out allowances you may receive and when you can claim a deduction.
|
Reason for allowance |
Example of allowance type |
Deductible (Yes or No) |
|---|---|---|
|
Compensation for an aspect of your work that is unpleasant, special or dangerous or for industry peculiarities |
Artificial fertilizers and chemicals allowance Cleaner, greaser or oiler allowance |
No These allowances don't help you pay for deductible work-related expenses |
|
An amount for certain expenses |
Motor vehicle allowance |
Yes If you incur deductible expenses |
|
An amount for special skills |
A first aid certificate |
Yes If you incur deductible expenses |
Example: allowance assessable, no deduction
Mario is an employee factory worker. Mario's employer snap freezes fresh fruit and vegetables and packages them. Mario's role requires him to work in a particular section of the factory that must be kept at below 0 degrees Celsius.
Mario's employer pays him a cold places allowance of 66c per hour. The allowance is shown on his income statement at the end of the income year.
Mario must include the cold places allowance as income in his tax return.
The allowance compensates Mario for an aspect of his work that is special. It is not to help him pay for deductible work-related expenses.
Mario can't claim a deduction because he hasn't incurred any expenses.
End of example
Example: allowance assessable, deduction allowed
Doris is an employee factory worker. On 5 occasions during the income year, Doris is asked to work overtime. Under the terms of the industrial award, Doris's employer pays her an overtime meal allowance of $15.24 each time she works overtime.
On her overtime meal break Doris buys and eats a meal at the cafeteria onsite. Doris usually spends $20 on her meal.
At the end of the income year, Doris's employer shows the total overtime meal allowance paid to Doris on her income statement ($15.24 × 5 = $76.20).
Doris must include the total amount of the allowance ($76.20) as income in her tax return.
Doris can claim a deduction of $100 ($20 × 5 = $100) for overtime meals in her tax return.
End of exampleReimbursements
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 them.
Example: reimbursement for protective eyewear
Beth is an employee at a factory manufacturing items that require certain chemicals. Beth needs to wear protective eyewear to protect her eyes from the risk of damage that may occur if the chemicals splash into her eyes. Beth has the option of wearing the protective eyewear her employer provides or she can buy protective eyewear that meets specific requirements and request a reimbursement.
The protective eyewear Beth's employer provided doesn't fit her face so she buys a pair that fit her better for $50. Beth's employer reimburses her $50 for the protective eyewear.
Beth doesn't need to include the reimbursement from her employer as income in her tax return.
Beth can't claim a deduction for the cost of protective eyewear.
End of exampleFind out about factory workers':