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  • Apprentices and trainees - income and work-related deductions

    If you earn your income as an apprentice or trainee, this guide will help you work out what:

    • income and allowances to report
    • you can and can't claim as a work-related deduction
    • records you need to keep.

    We consider you to be an apprentice or trainee when you are employed to work under the supervision of a more experienced worker to learn a vocation or trade. Typically, you earn money as soon as you start work as an apprentice or trainee. The amount may increase as you learn new skills, complete qualifications, or take on more responsibility. As an apprentice or trainee, you will always be an employee for tax and super purposes.

    Find out about apprentice or trainees'

    Income – salary and allowances

    Include all the income you receive during the income year in your tax return, this includes:

    Don't include reimbursements.

    Your income statement or a payment summary will show your salary, wages and allowances for the income year.

    Salary and wages

    You must include your salary and wages as income in your tax return. You also include as income any bonuses and cash payments you receive, such as tips.

    Allowances

    Include all allowances shown on your income statement or payment summary as income in your tax return.

    You may receive an allowance to:

    • compensate you for an aspect of your work
    • help you to pay for certain expenses such as meals when you travel for work.

    If your employer pays you:

    • an amount based on an estimate of what you might spend, such as paying cents per kilometre if you use your car for work, then it's an allowance
    • for the actual amount of the expense (either before or after you incur the expense), such as paying for tools or equipment you require to carry out your duties, it's a reimbursement.

    Allowances on your income statement or payment summary

    You may receive allowances:

    • for work that may be unpleasant, special or dangerous, such as working at heights
    • in recognition of holding special skills, such as a first-aid certificate
    • to compensate for industry peculiarities.

    These payments don't cover you for expenses you might incur. Include these allowances as income.

    If you receive an allowance from your employer, you can't always claim a deduction – it depends on the situation.

    Allowances not on your income statement or payment summary

    Your employer may not include some allowances on your income statement or payment summary. This can apply to travel allowances and overtime meal allowances paid under an industrial law, award or agreement. You can see these allowances on your payslips.

    If the allowance isn't on your income statement or payment summary, and you:

    • spent the whole amount on deductible expenses, you  
      • don't include it as income in your tax return
      • can't claim any deductions for these expenses
       
    • spent more than your allowance, you  
      • include the allowance as income in your tax return
      • can claim a deduction for your expense, if you're eligible.
       

    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. We don't consider a reimbursement to be an allowance.

    If your employer reimburses for expenses you incur:

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

    Find out about apprentice or trainee deductions'

      Last modified: 03 Feb 2022QC 67770