• Other expenses you may be able to claim

    Phone expenses

    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 10.

    Note: If you are reimbursed for part or all of your phone expenses, you cannot claim a deduction for that portion.

    Keeping records of phone expenses

    You may be able to identify your work-related calls individually on your itemised telephone account. If you do not receive itemised accounts, you can make a reasonable estimate of your call costs based on diary records you have kept over a minimum four-week period, together with your relevant telephone accounts.

    Example 10

    Sebastian uses his mobile phone for work purposes. He is on a set plan of $49 a month and rarely exceeds the plan cap.

    Sebastian receives an itemised account from his phone provider each month by email that includes details of the individual calls he has made.

    At least once a year, Sebastian prints out his account and highlights the work-related calls he made. He makes notes on his account 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, Sebastian works out that 240 (80%) of the individual call expenses billed to him are for work and applies that percentage to his cap amount of $49 a month. The other two months that Sebastian reviews are consistent with this.

    Since Sebastian 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 80% = $415.52

    End of example

    Note: If you fill in your own tax return, you claim your work-related phone expenses at D5 Other work-related expenses.

    Computers and laptops

    You can claim a deduction for the cost of purchasing computers or laptops (if $300 or less) that you use for your work. You must apportion the amount of your claim where the computer or laptop has been used in part for private purposes or was not available for use during all of the income year.

    If the computer or laptop cost more than $300, you must depreciate the asset via the decline in value process. As a general rule, desktop computers are depreciated over a period of four years, and laptops can be depreciated over three years.

    You can claim the work-related proportion of the following:

    • the decline in value of a computer
    • any repair costs
    • the interest on money borrowed to buy the computer
    • internet access.

    You cannot claim any deduction for decline in value (depreciation) of items used in your employment if they were provided to you by your employer.

    Example 11

    Michelle purchased her computer on 5 September for $3,000 and has worked out that she uses it 40% for work purposes. Michelle looks up the effective life of depreciating assets on our website that says the effective life of a computer is four years. Michelle uses the prime cost method to work out the decline in value of her computer:

    Asset's cost

    X

    Days held
    365

    X

    100%
    Effective life

    X

    Work use percentage

    $3,000

    X

    300 (5 Sep - 30 June)
    365

    X

    100%
    4 years

    X

    40%

    So, Michelle claims $246 for the decline in value of her computer in the first year

    End of example

    Note: A depreciating asset, such as a computer, is an asset that has a limited effective life and can reasonably be expected to decline in value over the time you use it.

    If you purchase a computer that cost more than $300, you can only claim a deduction for its decline in value.

    Next step:

    Camera

    You can claim a deduction for the cost of purchasing a camera that you use for work. If the camera costs more than $300, you cannot claim a 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.

    If you use the camera partly for private purposes, the amount you can claim depends on the amount of time you use the camera for work purposes. For example, if you use the camera half for work purposes and half for private purposes, you can only claim half the decline in value.

    Example 12

    Jessica buys a camera for $400 to take photographs of client properties for advertising purposes. Jessica and her children also use the camera to take family photographs. Jessica is entitled to a deduction for the proportion of the depreciation based on the work use for the camera.

    End of example

    Next step:

    Certificate of registration

    You can claim a deduction for the cost of renewing a real estate certificate of registration held by you as an employee in respect of your employment. You cannot claim a deduction for the cost of obtaining the initial certificate of registration.

    Advertising

    You can claim a deduction for the cost of advertising for example:

    • through newspapers
    • letterbox drops
    • signage
    • bunting.

    You cannot claim a deduction for the cost of advertising if you earn your income from a fixed salary and you are not entitled to earn commission.

    Gifts

    You can claim a deduction for the cost of gifts bought for work purposes if you are a salesperson or property manager entitled to receive your income from commission or both commission and retainer. You cannot claim a deduction if you earn a fixed income and you are not entitled to earn a commission.

    Gifts you can claim include:

    • a Christmas hamper
    • a bottle of whisky
    • wine
    • gift vouchers
    • a bottle of perfume
    • flowers
    • a pen set.

    Gifts you cannot claim are tickets to:

    • the theatre
    • a live play
    • a sporting event
    • a movie
    • a holiday, including an airline ticket
    • an amusement centre.

    These gifts are in the form of entertainment and are not deductible.

    Entertainment

    You cannot claim a deduction for entertainment expenses because they are specifically disallowed under the tax law and they are also a private expense. For example, if you buy lunch for a client or business associate, the food and drink expense is ordinarily a private matter, rather than a working or business expense.

    You cannot claim a deduction for expenses incurred in attending social functions. These expenses are considered to be private and not sufficiently related to the production of income. The cost of travelling to another workplace to attend a social function is also not deductable.

    Example 13

    Rachael attends a social breakfast organised by the Real Estate Institute. These breakfasts are held every other month to encourage new salespeople in the real estate industry to meet socially with colleagues. Rachael is not entitled to a deduction for the cost of attending the breakfast.

    End of example

    Note: The 'provision of entertainment' generally means:

    • entertainment by way of food, drink, recreation
    • accommodation or travel to do with providing entertainment by way of food, drink or recreation.

    Newspapers

    You can claim a deduction for the cost of the work-related portion of those newspapers containing property sections. If there is a sufficient connection between the duties carried out by you as a real estate employee and the content of the newspapers, the portion of the cost of relevant newspapers related to work is allowable.

    Example 14

    Gerry, a real estate employee, subscribes to the daily newspaper that he shares with his family. The property section of the paper only appears in the Wednesday, Saturday and Sunday papers.

    Gerry can claim a deduction for a portion of the cost of the Wednesday, Saturday and Sunday papers.

    He cannot claim a deduction for the cost of the newspapers for the other days of the week as these are not used for income-earning activities. The expenditure on newspapers on those days is considered to be private.

    End of example

    See also:

    To obtain copies of our publications:

    Phone

    For more information, phone us on 13 28 61 from Monday to Friday, between 8.00am and 6.00pm. We can offer you a more personal service if you provide your tax file number.

    Other services

    If you do not speak English well and need help from us, phone the Translating and Interpreting Service on 13 14 50.

    If you are deaf, or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below:

    • TTY users, phone 13 36 77 and ask for the ATO number you need
    • Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
    • internet relay users, connect to the NRS on relayservice.com.auExternal Link and ask for the ATO number you need.
      Last modified: 05 Oct 2016QC 24417