Recruitment consultants – income and work-related deductions
If you earn your income as a recruitment consultant, 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 recruitment consultants:
Income – salary and allowances
Include all the income you receive as a recruitment consultant during the income year in your tax return, this includes:
Don't include reimbursements.
Your income statement or payment summary will show all your salary, wages and allowances (including commissions) 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
|
Health and safety representative allowance
|
No
These allowances don't help you pay for deductible work-related expenses
|
Compensation for industry peculiarities
|
Shift loading allowance
|
No
These allowances don't help you pay for deductible work-related expenses
|
An amount for certain expenses
|
Vehicle 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 allowable
Mark is a recruitment consultant and is the health and safety representative for his office. Mark's employer pays him an allowance for each week during the year that he holds that position.
At the end of the income year, the allowance is on his income statement.
Mark must include the amount of the allowance in his tax return, but he can't claim a deduction for any expenses against the allowance. The allowance compensates Mark for his special additional duties. It's not to cover any expenses he might incur.
End of example
Example: allowance is assessable income, deduction allowable
Bronwyn is a recruitment consultant. During the income year, Bronwyn uses her own vehicle to travel:
- from her home of the office to offsite venues to attend work-related conferences and seminars
- to drop off documents and attend meetings with clients.
Bronwyn's employer pays her 50 cents per kilometre when she uses her car for work purposes. At the end of the year, her income statement shows she was paid an allowance of $1,280 for using her car for work (2,560 kms × 50 cents).
Bronwyn must include the car allowance as income in her tax return.
Bronwyn can claim a deduction for the cost of using her car for work purposes. She can't claim the amount of the allowance she receives. Bronwyn must calculate the amount of the deduction using the records she keeps whenever she uses her own car for work purposes.
In the past year Bronwyn has kept a record of the work trips she did using her own car, but she doesn't keep a logbook. Her records show she travelled 320 kms for work purposes.
As Bronwyn has not kept a logbook, she uses the cents per kilometre method to claim a deduction. The cents per kilometre method rate for the income year is 72 cents per kilometre. Bronwyn claims a deduction of $1,843.
End of exampleDifference 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 petrol you use if you use your car for work, 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
- 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 you for expenses you incur:
- don't include the reimbursement as income in your tax return
- you can't claim a deduction for the expenses.
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