It is common for volunteers to donate money, goods and time to not-for-profit organisations.
You may be asked by your not-for-profit organisation's volunteers whether their expenses or donations by them are tax deductible.
While the income tax law contains no specific deductions for voluntary work expenses, donations by volunteers to your not-for-profit organisation may be tax deductible.
Donations that are tax deductible
Tax-deductible donations are called 'gifts'. To be tax deductible, a donation must comply with relevant gift conditions, and be:
- made voluntarily
- made to a deductible gift recipient (DGR)
- in the form of money or certain types of property.
Before 1 July 2024, you can only claim a deduction for gifts and donations of $2 or more.
Donations that are not tax deductible
A donation of a service, including a volunteer’s time, is not tax deductible as no money or property is transferred to the DGR.
Payments that are not tax-deductible donations include:
- payments to school building funds as an alternative to an increase in school fees
- 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 exampleA token of acknowledgment from a DGR can be consistent with a payment being a gift.
Example: gift
Sheifa receives a lapel badge for her donation to a DGR. The lapel badge is a token of acknowledgment and not a material benefit and the donation is a gift.
End of exampleFor more information, see: