• Income

    Salary or wages

    Provide the following:

    • your employer’s name and address
    • the name and contact phone number of your manager (at the above employer)
    • copies of your original payment summary issued by your employer.

    If you did not receive an original payment summary, provide as many of the following additional items as possible:

    • copies of your original bank statements showing the deposits of payments from your employer
    • copies of your original payslips you received showing your income and tax withheld
    • copies of any other original documents or information that may help us verify the employment information on your tax return – for example, a statutory declaration.

    If you are unable to provide all of the above documents, or if you are an associate of your payer, we may need to seek further information from you.

    Australian Government allowances and payments

    Provide documents to show all of the taxable Australian Government allowances and payments you received and any overpayments you have repaid for the income year.

    Australian Government pensions and allowances

    Provide documents to show all of the taxable Australian Government pensions and payments you received and any overpayments you have repaid for the income year.

    Attributed personal services income

    Provide the following:

    • the name and contact phone number of the person who paid you
    • copies of your original payment summary – business and personal services income showing the amount of personal services income attributed to you and the total amount of tax paid or withheld
    • details of any other personal services income attributed to you for the personal services you provided.

    If you cannot provide any of the above, provide the following:

    • copies of original bank statements showing the deposits of payments from the person who paid you
    • copies of any other original documents or information that may help us verify the information on your tax return.

    Gross interest

    For any interest claimed or credit received from any source in Australia including:

    • accounts and term deposits held with financial institutions
    • interest from children's accounts you opened or operated with funds that belonged to you or funds that you used as if they belonged to you.

    Interest does not include any interest credited to a first home saver account.

    What you need to provide:

    • If the interest income shown in our letter is not correct or does not belong to you personally, you should provide information and documents to support your position, including copies of the statements.
    • If the interest has been declared in an associated return – for example, a partnership, trust, company or superannuation fund – give us the details. You should also ask the bank to record that TFN against the account(s). This will help us to match the interest to the correct tax return in future years.

    Dividends

    • you must declare dividends and distributions that were paid or credited to you by Australian companies you have shares in. These include dividends applied under a dividend reinvestment plan
    • dividends that were dealt with on your behalf
    • bonus shares that qualify as dividends.

    The following may also be included as dividends:

    • earnings you received, or were credited with, on a non-share equity interest
    • amounts you received from, or were credited by, a private company as a shareholder or an associate of a shareholder in the form of payments, loans or debts forgiven (these are generally unfranked dividends)
    • amounts you received from, or were credited by, the trustee of a trust estate in the form of payments, loans or debts forgiven where a private company in which you were a shareholder, or an associate of a shareholder, had an unpaid present entitlement (or was going to have such an entitlement by a certain time) from the trust (these are generally unfranked dividends).

    Do not include dividends paid under a demerger unless the company advised you to include them.

    What you need to provide:

    • If the dividend income listed in the letter is not correct or does not belong to you personally you should provide information or documentation to support your position, including copies of the statements.
    • If the income has been declared in an associated tax return – for example, a partnership, trust, company or superannuation fund – advise us of the TFN and dividends shown on that tax return. Ask the company to record that TFN on their register. This will assist us to match the dividends to the correct tax return in future years.

    Deductions

    Work-related car expenses

    12% of original value method – For 2015 and earlier years only

    If you claimed a deduction for car expenses using the ‘12% of original value’ method, provide the following:

    • a record of how you worked out your car either    
      • travelled more than 5,000 business kilometres in the income year
      • would have travelled more than 5,000 business kilometres had you used it for the whole year, if you used the car for only part of the year
    • copies of the purchase or lease documents for your car
    • copies of the car registration certificate or papers
    • details of the business travel you undertook during the income year – for example, you should advise the    
      • purpose of the travel undertaken
      • frequency of any work-related travel
      • number of kilometres travelled for work purposes in a typical working week
    • if your claim is based upon travel you undertook for your employer, a letter from your employer (with a contact name and phone number) confirming you are required to use your car in the course of carrying out your employment duties.

    Cents per kilometre method

    If you claimed a deduction for car expenses using the ‘cents per kilometre’ method, provide the following:

    • a record of how you worked out your business kilometres per car, per income year
    • copies of the purchase or lease documents for your car
    • copies of the car registration certificate or papers
    • details of the business travel you undertook during the income year – for example, you should advise the    
      • purpose of the travel undertaken
      • frequency of any work-related travel
      • number of kilometres travelled for work-related purposes
    • if your claim is based upon travel you undertook for your employer, a letter from your employer (with a contact name and phone number) confirming you are required to use your car in the course of carrying out your employment duties.

    Common issues

    The following are common issues encountered with cents per kilometre claims:

    • Claiming 5,000km without being able to show how you had travelled 5,000km.
    • Claiming more than 5,000km for a single vehicle in a single year.
    • Claiming for a car that you do not own.

    Work-related car expenses – logbook method

    If you claimed a deduction for car expenses using the ‘logbook’ method, provide the following:

    • details of how your claim was calculated (that is, a description of each item included in the claim and the amount claimed for each item)
    • copies of the purchase or lease documents for your car
    • the calculation for the decline in value (depreciation)
    • copies of the car registration certificate or papers for the period you are claiming car expenses
    • copies of your logbook and odometer records. The logbook must contain    
      • when the logbook period begins and ends
      • the car’s odometer readings at the start and end of the logbook period
      • the total number of kilometres the car travelled during the logbook period
      • the number of kilometres travelled for each journey recorded in the logbook (if you made two or more journeys in a row on the same day, you can record them as a single journey). You'll need to record the    
        • start and finishing times of the journey
        • odometer readings at the start and end of the journey
        • business kilometres travelled
        • reason for the journey.
      • the business-use percentage for the logbook period
      • the odometer readings at the start and end of each income year you use the logbook method.
    • copies of original receipts for all car expenses claimed    
      • except for fuel and oil receipts if you have used odometer records to estimate your fuel and oil expenses
      • including all fuel and oil receipts if you have not used odometer records to estimate your fuel and oil expenses.
    • if your claim is based upon travel you undertook for your employer, a letter from your employer (with a contact name and phone number) confirming you are required to use your car in the course of carrying out your employment duties.

    Common issues

    The following are common issues encountered with log book claims:

    • A log book has not been kept, or has not been kept correctly. You must have a log book to use the log book method, even if your business use was 100%, or your business use was a fixed pattern.
    • Your usage of the vehicle has changed significantly since the log book was kept. As a general rule, a change in the business or private usage of the vehicle that results in the distance the car travels per week changing by more than 10% is considered a significant change.
    • The number of cars you used for work changed, or you used multiple vehicles for work and did not keep concurrent log books.
    • The opening and closing odometer readings for the period during the financial year the car was used for work have not been kept.
    • The use of the car, both private and for work, during the 12 week log book period is not representative of the use of the car throughout the year. A log book may have to be kept for longer than 12 weeks if there is no regular pattern of use of the car.

    One-third of actual expenses method – For 2015 and earlier years only

    If you claimed a deduction for car expenses using the ‘one-third of actual expenses’ method, provide the following:

    • a record of how you worked out that your car    
      • travelled more than 5,000 business kilometres in the income year
      • would have travelled more than 5,000 business kilometres had you used it for the whole year, if you used the car for only part of the year.
    • details of how your claim was calculated (that is, a description of each item included in the claim and the amount claimed for each item)
    • copies of the purchase or lease documents for your car
    • copies of the car registration certificate or papers for the period you are claiming car expenses
    • details of the business travel you undertook during the income year – for example, you should advise the    
      • purpose of the travel undertaken
      • frequency of any work-related travel
      • number of kilometres travelled for work purposes in a typical working week.
    • copies of original receipts for all car expenses claimed    
      • except for fuel and oil if you have used odometer records to estimate your fuel and oil expenses
      • including all fuel and oil receipts if you have not used odometer records to estimate your fuel and oil expenses.
    • if your claim is based upon travel you undertook for your employer, a letter from your employer (with a contact name and phone number) confirming you are required to use your car in the course of carrying out your employment duties.

    Work-related travel expenses

    If you claimed work-related travel expenses that you incurred that are directly related to your work as an employee, provide a list of the expenses claimed as well as copies of original receipts or other evidence substantiating each of the items claimed – for example:

    • public transport fares, including air travel and taxi fares
    • bridge and road tolls, parking fees and short-term car hire
    • meals, accommodation and incidental expenses you incurred while away overnight for work that are not covered by a bona fide travel allowance provided by your employer
    • expenses for motorcycles and vehicles with a carrying capacity of one tonne or more or nine or more passengers such as utility trucks and panel vans
    • actual expenses (such as petrol, oil and repair costs) you incurred to travel in a car owned or leased by someone else.

    You should provide an explanation of how each expense was made in the course of earning your assessable income and cross-reference your receipts and other evidence with the list of expenses.

    The following information relates to meals, accommodation and incidental expenses you incur while away overnight for work if you received a bona fide travel allowance from your employer.

    You cannot claim overnight travel expenses based only on the numbers of days you slept away from home multiplied by the:

    • Commissioner's reasonable amounts, or
    • the daily allowance rate paid by your employer.

    You must be able to show the travel expenses were actually incurred.

    Claiming in excess of the Commissioner's reasonable rate

    If the amount you are claiming for travel expenses is in excess of the Commissioner's reasonable rate, provide ALL of the following:

    • the amount of any travel allowance declared at item 2 of your tax return – if the allowance was not shown on your payment summary, explain how you calculated the amount
    • a list of the expenses claimed showing the nature of the expenses and the amounts claimed
    • an explanation of how the travel expenses are work-related
    • copies of original receipts or other documents substantiating each expense, cross-referenced to the relevant item on the list
    • a travel diary for domestic and overseas trips of six nights or more.

    The following are common issues encountered with travel expense claims not more than the Commissioner’s reasonable amounts:

    • Claiming when you did not receive a bona fide travel allowance, and you do not have written evidence to support your claims.
    • Claiming based on the Commissioner’s reasonable amounts multiplied by the number of nights away, when the expenses incurred were less than this.
    • Claiming a deduction for travel when you received a travel allowance that has not been shown on your payment summary.

    The following are common issues encountered with travel expense claims that exceed the Commissioner’s reasonable amounts:

    • Not keeping a travel diary for domestic or overseas travel of six nights or more.
    • Claiming when you do not have written evidence to substantiate your expenses. 

    See also:

    • TD 2015/14 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 201516 income year?

    Claiming not more than the Commissioner's reasonable rate

    If your claim is not more than the Commissioner’s reasonable rate, provide ALL of the following:

    • details of your employment and how the travel expenses are work-related
    • a letter or other information from your employer (such as a job description) showing that you needed to travel in the course of performing your work
    • details of any allowances or reimbursements received (include the workplace/enterprise bargaining agreement name, how the allowances or reimbursements were calculated and details of the expenses they are paid to cover)

    Note – If your allowances included an award transport payment (ATP), please provide all details of the ATP including the 29 October 1986 rate (your employer should know these details)

    • how you calculated your claim
    • information to show you made the travel expenses claimed – this could include hotel booking confirmations, credit card or bank statements showing accommodation or meal expenses, menus from places you ate at and the cost of those meals, or other evidence
    • written evidence for overseas accommodation expenses regardless of the length of the trip
    • a travel diary for overseas trips of six nights or more.

    The following information relates to expenses for motorcycles and vehicles with a carrying capacity of one tonne or more or nine or more passengers such as utility trucks and panel vans.

    Please provide ALL of the following:

    • receipts for your actual expenses (including fuel and oil costs) – bank statements and credit card transaction receipts are not sufficient evidence for fuel and oil purchases, you need to keep your actual receipts
    • a diary to record how much of your expenses are for work purposes (if you use your vehicle for both work and private purposes)
    • the purchase or lease documents for your vehicle
    • the vehicle registration certificate/papers
    • a letter from your employer (with a contact name and telephone number), confirming how you use the vehicle in the course of carrying out your employment duties.

    If you borrow a car that is owned or leased by someone else, you may be able to claim costs incurred if you use the car for your work as an employee. These expenses include petrol, oil and repair costs.

    The following information relates to actual expenses for a car that is owned or leased by someone else.

    Please provide ALL of the following:

    • receipts for your actual expenses (including fuel and oil costs) – bank statements and credit card transaction receipts are not sufficient evidence for fuel and oil purchases, you need to keep your actual receipts
    • a letter from your employer (with a contact name and telephone number), confirming you are required to use your vehicle in the course of carrying out your employment duties.

    Work-related clothing, laundry and dry-cleaning expenses

    If you claimed the cost of a work uniform that is distinctive (such as one that has your employer's logo permanently attached to it). It must be either:

    • a non-compulsory uniform that your employer has registered with AusIndustry (check with your employer if you are not sure), or
    • a compulsory uniform that can be a set of clothing or a single item that identifies you as an employee of an organisation. There must be a strictly enforced policy making it compulsory to wear that clothing at work. Items may include shoes, stockings, socks and jumpers where they are an essential part of a distinctive compulsory uniform and the colour, style and type are specified in your employer's policy.

    You can also claim the cost of:

    • occupation-specific clothing which allows people to easily recognise that occupation (such as the checked pants a chef wears when working) and which are not for everyday use
    • protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include fire-resistant clothing, sun protection clothing, safety-coloured vests, non-slip nurse's shoes, steel-capped boots, gloves, overalls, aprons, and heavy duty shirts and trousers (but not jeans). You can claim the cost of protective equipment, such as hard hats and safety glasses at Other work-related expenses.

    You can claim the cost of renting, repairing and cleaning any of the above work-related clothing.

    Claims for laundry expenses that do not exceed $150 can be based on a cost of $1 per load if you wash only your work clothes and 50 cents per load if you wash other clothes together with your work clothes.

    In order to make a claim for laundry in this manner, the clothing being laundered must be a uniform, occupation specific clothing or protective clothing.

    You cannot claim the cost of purchasing or cleaning plain clothes, such as black trousers, white shirts, suits and stockings, even if your employer requires you to wear them.

    Provide the following:

    • a list of all items included in your claim
    • an explanation as to how each item on the list was an expense incurred
    • in the course of earning your assessable income
    • a letter from your employer confirming that  
      • the clothing was part of a compulsory work uniform, or
      • the clothing was part of a non-compulsory work uniform registered with AusIndustry, or
      • you were required to wear protective clothing
    • written evidence for all of your expenses, cross-referenced to the relevant item on the list, except for a laundry claim that does not exceed $150
    • if your laundry claim does not exceed $150 and you do not have written evidence, provide details of how you calculated your claim.

    Work-related self-education expenses

    Self-education expenses related to your work as an employee is available if you work and study at the same time and can satisfy any of these conditions:

    • you are upgrading your qualifications for your current employment
    • you are improving specific skills or knowledge used in your current employment
    • you are employed as a trainee and you are undertaking a course that forms part of that traineeship
    • you can show that at the time you were working and studying, your course led, or was likely to lead, to an increase in income from your current employment.

    You cannot claim a deduction for work-related self-education expenses for a course that:

    • relates only in a general way to your current employment or profession, or
    • will enable you to get new employment.

    You cannot claim a tax deduction for the following expenses:

    • self-education expenses such as tuition fees paid to an education provider by you or the Australian Government under HECS-HELP
    • the cost of accommodation and meals associated with day-to-day living expenses
    • repayments you make (whether compulsory or voluntary) on debts you may have under the following loan schemes  
      • HECS-HELP
      • FEE-HELP
      • VET-FEE-HELP
      • OS-HELP
      • SSL
      • SFSS.

    See also:

    TR98/9 Income tax: deductibility of self-education expenses made by an employee or a person in business sets out the circumstances when self-education expenses can be allowable as a tax deduction.

    Provide the following:

    • a list of all items included in your claim showing    
      • full details of the course you undertook
      • the name of the institution where it was undertaken
      • the date you began your course
      • whether you were a full-time or part-time student
      • the nature of each expense and the amount claimed
    • an explanation as to how the course directly relates to your employment at the time you were undertaking the course – you may need to provide a letter from your employer confirming their requirement for you to attend the course
    • copies of original receipts or other documents to support each item included on the list.

    Other work-related expenses

    Provide the following:

    • a list of all items included in your claim – a separate list should be provided for each expense type included in your claim – for example, phone, mobile phone, books and journals, home office, union fees, computer expenses or stationery
    • if you are claiming internet or phone expenses you will need to provide evidence of the total cost for the year (statements or bills), advise your work-related use percentage and how you calculated this amount (for example, if you use a diary, provide a copy to us)
    • copies of original receipts or documents substantiating each item included in each list; this evidence should be separated into the same groupings as the lists, and should be cross-referenced to the relevant list
    • if you are claiming expenses for depreciable items (for example, computers and laptops) you will need to provide a copy of the purchase invoice and advise the method of depreciation you want to use, or have used for the same asset in the previous year (that is, prime cost or diminishing value method); this evidence should be separated into the same groupings as the lists, and should be cross-referenced to the relevant list
    • an explanation of how each item included in each list was an expense incurred in the course of earning your assessable income.

    Low-value pool deduction

    The following cannot be included in a low-value pool:

    • assets you have previously claimed deductions for using the prime cost method
    • assets that cost $300 or less for which you can claim an immediate deduction
    • assets for which you deduct amounts under the simplified depreciation rules for small business entities
    • horticultural plants
    • a portable electronic device (such as a mobile phone, personal digital assistant or laptop computer), computer software, protective clothing, a briefcase or a tool of trade, which is primarily for use in your employment, if your employer provided it, paid for it or reimbursed you for any of its cost, and the benefit was exempt from fringe benefits tax.

    Provide the following

    For your employment:

    • an explanation of how the assets in your pool are used to earn your income
    • a letter or other information from your employer (such as a job description) supporting your claims.

    For each year being audited, provide the following information:

    • A list of the low-cost or low-value asset(s) included in your claim for low-value pool deduction.
    • Details of how your claim was calculated, including your worksheet used to calculate your claim.
    • Documents showing the purchase price of the asset(s).

    Interest deductions

    Provide the following:

    • a list of all interest expenses that you have claimed, showing    
      • the amount of the expense
      • date of the expense
      • who it was paid to
      • the date any loans were obtained
      • the amount of funds borrowed
      • the nature of the investments
      • the income you received from these investments during the income year.
    • documents to support the expenses you have claimed – for example, copies of bank statements, loan agreements.

    If no income has been received during the income year or is less than the expense claimed, also provide:

    • the reason no income or a smaller amount of income was received
    • whether you expect to receive a return on the investment and, if so, when and the amounts you expect to receive
    • whether income has been received in a previous year and, if so, when the amounts were received.

    Dividend deductions

    Provide the following:

    • a list of all dividend expenses you have claimed, showing    
      • the amount of the expense
      • date of the expense
      • who it was paid to
      • the date any loans were obtained
      • the amount of funds borrowed
      • the nature of the investments, including whether they are public or private
      • the income you received from these investments during the income year.
    • documents to support the expenses you have claimed – for example, copies of bank statements, management fee and investment advice invoices.

    If no income has been received during the income year, also provide:

    • the reason no income was received
    • whether you expect to receive a return on the investment and, if so, when and what amounts you expect to receive
    • whether income has been received in a previous year and, if so, when and what amounts were received.

    Gifts or donations

    Provide a copy of receipts or any other documents you have to support this claim showing the:

    • names of the recipients of each gift or donation – including the recipient’s Australian business number (ABN)
    • date that each gift or donation was made
    • nature and amount of each gift or donation.

    Cost of managing tax affairs

    Provide copies of invoices or statements showing the expenses incurred. This information should show:

    • the amount of the expense
    • the date of the expense
    • who it was paid to
    • the nature of the expense.
      Last modified: 15 Jul 2016QC 24929