• Expenses incurred by volunteers

    The income tax law contains no specific deductions for voluntary work expenses. As voluntary work is usually unpaid, payments to volunteers are generally not assessable income. For this reason, most expenses incurred in voluntary work are not tax deductible.

    A volunteer may be entitled to claim expenses incurred in gaining or producing assessable income, except where the expenses are of a capital, private or domestic nature. For example, expenditure on items such as travel, uniforms or safety equipment could be deductible. Expenses incurred for private and income-producing purposes must be apportioned, with only the income-producing portion of the expense being tax deductible.

    Example: Expenses apportioned

    John operates a commercial fishing trawler and uses navigational charts in his business. He also volunteers as an unpaid training officer at the volunteer coastguard. John purchases two identical sets of navigational charts – one for his business, the other as a training aid in coastguard courses. John will need to apportion the expense and can claim the part incurred in gaining or producing assessable income – in this case, half the total cost.

    End of example

    Donations

    It is common for volunteers to donate money, goods and time to not-for-profit organisations. To be tax deductible, a gift must comply with relevant gift conditions, and be:

    • made voluntarily
    • made to a deductible gift recipient (DGR)
    • in the form of money ($2 or more) or certain types of property.

    Donors can claim deductions for most, but not all, gifts they make to DGRs.

    For example, a gift of a service, including a volunteer’s time, is not deductible as no money or property is transferred to the DGR.

    Payments that are not gifts include those to school building funds as an alternative to an increase in school fees and purchases of raffle or art union tickets, chocolates and pens.

    Example: Not a gift

    Chamith buys a clock at a charity auction for $200. This is not a gift even if Chamith has paid a lot more than the value of the clock.

    End of example

    Individuals may be entitled to a tax deduction for contributions made at fundraising events, including dinners and charity auctions.

    A token of acknowledgement from a gift recipient can be consistent with a payment being a gift.

    Example: Gift

    Sheifa receives a lapel badge for her donation to a DGR. This is not a material benefit and the donation is a gift.

    End of example

    To find out if a particular organisation is a DGR:

    See also:

    Gifts and fundraising

    Last modified: 20 Jul 2015QC 46358