You can claim a deduction for the cost of work-related phone calls you make, including calls from mobile phones. You can also claim a deduction for your phone rental if you can show you were on call or you had to call your employer or clients regularly while you were away from your workplace. If you also used your phone for private purposes, you can only claim that portion of your phone rental costs and calls that relate to your work-related use of the phone (see Example 16).
Note: If you are reimbursed for part or all of your phone expenses, or provided with a pre-paid SIM card by your employer, you can only claim a deduction for the work-related portion you have not been reimbursed for.
Keeping records of phone expenses
You may be able to identify your work-related calls individually on your itemised telephone bill. If you do not receive itemised bills, for instance you use a pre-paid SIM, you can make a reasonable estimate of your call costs based on diary records you have kept over a four-week period, together with your relevant telephone bills.
Daniel uses his mobile phone for work purposes. He is on a set plan of $49 a month and rarely exceeds the plan cap.
Daniel receives an itemised bill from his phone provider each month by email, which includes details of the individual calls he has made.
At least once a year, Daniel prints out his bill and highlights the work-related calls he made. He makes notes on his bill for the first month about who he is calling for work – for example, his manager and his clients.
Out of the 300 calls he has made in a four-week period, Daniel works out that 30 (10%) of the calls are for work and applies that percentage to his cap amount of $49 a month. The other two months that Daniel reviews are consistent with this.
Since Daniel was only at work for 46 weeks of the year (10.6 months), he calculates his work-related mobile phone expense deduction as follows:
10.6 months x $49 x 10% = $52
End of example
Union and professional association fees
You can claim a deduction for these fees. If the amount you paid is shown on your payment summary, you can use it to prove your claim. You can claim a deduction for a levy paid in certain circumstances – for example, to protect the interests of members and their jobs.
You cannot claim a deduction for levies or other amounts you paid to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off.
You can claim an immediate deduction for personal protective equipment you use on the job that costs $300 or less. This includes equipment such as:
- safety helmets
- ear muffs
- face masks
- safety glasses
- breathing masks.
You cannot claim an immediate deduction for protective equipment costing more than $300 that you use for more than a year. You can claim a deduction for its decline in value (depreciation).
Note: A deduction is not allowable for the cost of prescription glasses or contact lenses, as the expense relates to a personal medical condition.
Sunglasses, sunhats and sunscreens
You can claim a deduction for these items if the nature of your work requires you to work in the sun for all or part of the day and you use these items to protect yourself from the sun while at work.
Tools and equipment
You can claim an immediate deduction for the full purchase price of each tool or piece of equipment that:
- you use for your work as an employee
- costs you $300 or less
- was not one of a number of identical or substantially identical tools you started to hold in the income year that cost more than $300
- was not part of a set of tools that you started to hold in the income year that cost more than $300 (see example 17).
If the tool or piece of equipment costs more than $300, you cannot claim an immediate deduction for the full purchase price. However, you can claim a deduction for its decline in value (depreciation). Your claim for depreciation applies to the whole amount, not just the amount over $300.
Anna needed a new set of 16 high-quality spanners for work. She could not afford the $330 cost, so she bought them all individually during the 2016 year.
Although they only cost $22 each, Anna cannot claim an immediate deduction for the spanners because they are part of a set that she bought in the 2016 income year that cost more than $300. Anna can claim a deduction for the decline in value of the set, which in the end cost $352.
If in a following year, Anna breaks one of the spanners and has to buy a replacement, she will be able to claim an immediate deduction for the replacement because it won’t be part of a set that she bought in that year that cost more than $300.
End of example
If you use the tool or piece of equipment partly for private purposes, the amount you can claim depends on the amount of time you use the tool or equipment for work purposes. For example, if you own a power tool which you use half for work purposes and half for private purposes, you can only claim half the decline in value.
You can also claim the work-related cost of repairing and insuring your tools and equipment, and any interest charges you incur on money you borrowed to purchase these items.
Note: If you are a new apprentice and you received government funded tools through your employer, you cannot claim a deduction for the costs or decline in value of those tools.
- For the effective life of depreciating assets, see Taxation Ruling TR 2015/2 Income tax: effective life of depreciating assets (applicable from 1 July 2015).
Tal purchased a tool set on 5 September for $1,500. Tal only uses the tools for work purposes.
Tal visits our website and looks up our ruling on the effective life of depreciating assets. The ruling says the effective life of loose tools is five years.
Tal works out the deduction for the decline in value of his tool set using the prime cost method in this way:
Asset cost x days held/365 x work use percentage/5
He has held the tools for 300 days and his work use percentage is 100%.
$1,500 x 300/365 x 100/5 = $246
Tal can therefore claim $246 for the decline in value of his tool set in the first year. Using the same method, Tal will also be able to claim $300 per year in the following four years and $54 in the final (sixth) year.
End of example
Keeping records of your tool and equipment expenses
The records you must keep may include:
- receipts or other written evidence of your expenses, including receipts for depreciating assets you have purchased
- diary entries you make to record
- your small expenses ($10 or less) totalling no more than $200
- expenses you cannot obtain any kind of evidence for, regardless of the amount.