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  • Train drivers – income and work-related deductions

    If you earn your income as a train driver, 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.

    When we say:

    • 'local driver', we mean a driver who usually travels within a city or town and sleeps at home after completing their work. For example, metropolitan passenger drivers.
    • 'short-haul driver', we mean a driver who usually travels between cities and towns but returns home to sleep after completing their work. For example, passenger or freight drivers who drive intrastate or interstate who aren't required to have a mandatory long rest break during their shift.
    • 'long-haul driver', we mean a driver who sleeps away from home, as a long rest break is mandatory as part of their work. For example, passenger or freight drivers who drive intrastate or interstate who are required to have a mandatory long rest break during their shift.

    Find out about train drivers':

    Income – salary and allowances

    Include all the income you receive as a train driver during the income year in your tax return, this 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

    Dirty work allowance

    No

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

    Compensation for industry peculiarities

    On-call allowance

    No

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

    An amount for certain expenses

    Overtime meal allowance

    Yes

    If you incur deductible expenses

    An amount for special skills

    A first aid certificate

    Yes

    If you incur deductible expenses

     

    Example: allowance assessable, no deduction

    Mario is an employee train driver. His employer requires him to relocate to another depot. Mario's employer pays him an allowance to cover the cost of finding accommodation at the new location and moving his household items. The relocation allowance is shown on Mario's income statement.

    Mario must include the allowance as income in his tax return.

    Although the allowance is paid to help Mario pay for his relocation expenses, he can't a deduction for the expenses he incurs. This is because he doesn't incur the relocation expenses in earning his income and they are private.

    End of example

     

    Example: allowance assessable, deduction allowed

    Jasmine is a long-haul train driver. Jasmine requires certain hand tools on each of her shifts, so her employer pays her a tool allowance each week.

    At the end of the income year, Jasmine's employer shows the total tool allowance ($350) on her income summary.

    During the income year, Jasmine buys a new hammer for $49 and spanner set for $125. She only used the tools for work.

    Jasmine must show the allowance of $350 as income on her tax return.

    Jasmine can claim a deduction for the cost of the tools she buys and uses for work ($174).

    End of example

    Difference between allowances and reimbursements

    An allowance does not 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 them.

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      Last modified: 24 May 2022QC 59080