Show download pdf controls
  • Pilots – income and work-related deductions

    If you earn your income as an employee pilot, 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.

    Find out about pilots':

    Income – salary and allowances

    Include all the income you receive as a pilot during the income year in your tax return, which includes:

    Don't include reimbursements.

    Your income statement or a payment summary will show all 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. Include any bonuses.

    Allowances

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

    While all allowances you receive from your employer are income, you can't always claim a deduction if you receive an allowance – it depends on the situation.

    If you can claim a deduction, the amount of the deduction is not usually the same amount as the allowance you receive.

    Allowance types, reasons and deductibility

    Reason for allowance

    Example of allowance type

    Deduction (Yes or No)

    Compensation for an aspect of your work that is unpleasant, special or dangerous

    Night operations allowance

    No

    These allowances don't help you pay for deductible work-related expenses

    Compensation for industry peculiarities

    Location allowance

    No

    These allowances don't help you pay for deductible work-related expenses

    An amount for certain expenses

    Telephone allowance

    Yes

    If you incur deductible expenses

    An amount for special skills

    A first aid certificate

    Yes

    If you incur deductible expenses

     

    Example: allowance is assessable income, no deduction allowed

    Archie pilots aircraft carrying freight. When Archie is required to load and unload the freight, his employer pays him a duty allowance.

    At the end of the income year, Archie's employer shows the duty allowance on his income statement. Archie must declare the duty allowance as income in his tax return.

    Archie can't claim a deduction as the allowance is for Archie undertaking additional duties. It is to help pay for any work-related expenses that Archie might incur.

    End of example

     

    Example: allowance is assessable income, deduction allowed

    Wendy pilots a narrow body passenger aircraft. When she reports for duty, she must be wearing her compulsory uniform. Although Wendy is provided with the uniform, she is responsible for laundering it. Wendy's employer pays her a laundry allowance which is shown on her income statement at the end of the income year.

    Wendy must declare the laundry allowance as income in her tax return however, she can also claim a deduction for the cost of laundering her uniform.

    End of example

    Difference between allowances and reimbursements

    An allowance doesn't include a reimbursement.

    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 the cost of work-related calls made on your personal mobile phone, it's a reimbursement.

    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
      • 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 you for expenses you incur:

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

    Find out about pilots:

      Last modified: 18 Aug 2022QC 60284