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  • Common expenses T–W

    Details on common building and construction employees' expenses for:

    Tools and equipment

    You can claim a deduction for tools and equipment you use to perform your duties as a building and construction employee. For example, a chisel set or power tools such as angle grinders, circular saws.

    You can only claim a deduction for the work-related use of the item.

    If a tool or equipment cost you $300 or less, you can for the full amount in the year you buy it, if:

    • you use it for mainly work purposes
    • it's not part of a set that together cost more than $300.

    You can claim a deduction for the cost over the life of the item (that is, decline in value), if the tool or equipment:

    • cost more than $300
    • is part of a set that together cost more than $300.

    If you bought the tool or item of equipment part way through the year, you can only claim a deduction for the decline in value for the period of the income year that you own it.

    You can also claim a deduction for the cost of repairs to tools and equipment that you use for work purposes.

    You can't claim a deduction for tools and equipment that are supplied by your employer or third party supplies for use.

    Example: tool allowance

    Jan receives a tool allowance of $500, and her tool expenses are $300, to claim a deduction she would:

    • include the whole amount of the allowance as income on her tax return
    • claim a deduction of $300 for the expenses she incurred for the tools.
    End of example

     

    Example: depreciating (no immediate deduction)

    Anna needed a new set of 16 spanners for work. She couldn't afford the $352 cost for the complete set, so she bought them all individually throughout the 2021 income year.

    Although they only cost $22 each, Anna can't claim an immediate deduction for the spanners. This is because they are part of a set, she bought in the 2021 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'll be able to claim an immediate deduction for the replacement because it won’t be part of a set she bought in that year that cost more than $300.

    End of example

     

    Example: effective life

    Tal purchased an electric tool set on 5 September for $1,500 and only uses it for work-related purposes.

    He visits the ATO website and looks up the ruling on the effective life of depreciating assets. The ruling says the effective life of electric hand tools is five years.

    He has held the tool set for 300 days and his work use percentage is 100%.

    He works out the deduction for the decline in value of his tool set using the prime cost method in this way:

    (Asset cost × (days held ÷ 365) × (work use percentage ÷ 5 years)

    $1,500 × (300÷ 365) × (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, he will also be able to claim $300 per year in the following four years and $54 in the final (sixth) year.

    End of example

    See also:

    Travel expenses

    You can claim a deduction for expenses you incur when your work requires you to both:

    • travel for work
    • sleep away from your home overnight in the course of performing your employment duties.

    Expenses you can claim include your accommodation, meals and expenses which are incidental to the travel. For example, when you travel interstate to attend a work-related conference, seminar or training course.

    You can't claim a deduction for travel expenses where you don’t incur any expenses, because you either:

    • sleep in accommodation your employer provides
    • you eat meals your employer provides
    • your employer or a third party reimburses you for any costs you incur.

    Receiving an allowance from your employer doesn't automatically mean you can claim a deduction. In all cases, you must be able to show you:

    • you were away overnight
    • you spent the money
    • the travel directly relates to earning your employment income
    • how you work out your claim.

    If you receive a travel allowance you must include it as assessable income in your tax return unless all of the following apply:

    • the allowance is not on your income statement or payment summary
    • the travel allowance doesn't exceed the Commissioner's reasonable amount
    • you spent the whole amount on deductible accommodation, meal and incidental expenses, if applicable.

    The Commissioner's reasonable amount is set each year. The amount is only used to determine whether an exception from keeping written evidence applies for the following expenses which are coved by a travel allowance:

    • accommodation
    • meal
    • incidentals.

    You don't need to keep written evidence such as receipts if both of the following apply:

    • you received a travel allowance from your employer for the expenses
    • your deduction is less than the Commissioner's reasonable amount.

    If your deduction is for more than the Commissioner's reasonable amount you need to keep written evidence for all your travel expenses, not just the amount over the reasonable amount

    Even if you're not required to keep written evidence such as receipts, you must be able to explain your claim and show you spent the amounts.

    Example: living away from home allowance

    Joe is an employee project manager. He lives in the city with his family and applies for a job to work on a large construction project near a country town for 12 months. He is paid a living-away-from-home allowance by the construction company to meet his accommodation and meal costs while he is working in the country town.

    The allowance isn't income and isn't shown on Joe's income statement. He can't claim a deduction for his accommodation and meal costs while living away for work.

    End of example

     

    Example: reasonable allowance amount

    Antoni travels from Adelaide to Mt Gambier for a job and is away from home for five nights. His employer pays him a travel allowance of $110 per night to cover his accommodation, meals and incidentals. The allowance isn't shown on his income statement.

    The travel allowance Antoni receives is less than the Commissioner's reasonable allowance amount and he spends all of the travel allowance on his travel expenses.

    Antoni chooses not to include his allowance on his tax return because:

    • it's less than the reasonable allowance amount
    • it isn't shown on his income statement
    • he spends it all to cover his travel expenses.

    This means Antoni can't claim a deduction for his expenses on his tax return.

    End of example

     

    Example: claim for less than reasonable allowance amount

    Derek works for a national company. His employer provides him with a travel allowance that covers the costs of his accommodation when he travels interstate for work. Derek doesn't receive an allowance for his meals or incidental expenses.

    The amount Derek claims as a deduction for accommodation costs he incurs, is less than the reasonable allowance amount. This means he can only claim the amount he spent on accommodation. He doesn't have to keep records of his accommodation expenses.

    He does however have to keep records and other written evidence to support any deductions he claims for meals and incidental expenses.

    End of example

    See also:

    Union and professional association fees

    You can claim a deduction for union and professional association fees you pay. If the amount you pay is shown on your income statement. You can use your income statement as evidence of the amount you pay.

    See also:

    For more building and construction employee expenses, see:

    Find out more about building and construction employees':

      Last modified: 10 Feb 2021QC 24373