You can't claim a deduction for the cost of buying or maintaining watches or timepieces, even if you require one as part of your job. This is a private expense.
However, you can claim a deduction if your watch has special characteristics that you use for a work-related purpose. For example, a nurse can claim the cost of their fob watch.
Example: specialty watch deductible
Alastair is a nurse. When he started working in a hospital, he bought a nurses' fob watch for $150 that he only wears during work hours. Alastair can't wear a normal wristwatch for hygiene reasons.
Alastair can claim a deduction for the expense.End of example
As with ordinary watches, a smart watch (that connects to a phone or other device to provide notifications, apps and GPS, for example) is a private expense and not deductible under ordinary circumstances.
However, if you require some of the smart watch's functions as an essential part of your employment activities you can claim a deduction for the expenses related to your work-related use of the smart watch.
To show your work-related use of the watch, you need to keep a diary or similar record of your use of the device for a representative period.
Example: smart watch not deductible
Dan is a personal trainer who mainly trains his clients one-on-one. As part of his role, he tracks his clients' progress, including reps and weights used. Dan's employer provides him with a device and a program for recording these details.
The device provided by Dan's employer doesn't allow him to check his messages while he is working so he buys a smart watch. He receives both private and work-related messages through the smart watch.
Dan can't claim a deduction for the smart watch because his employer has provided him with the necessary tools to do his work. The ability to check messages during work with his smart watch is not part of his employment duties.End of example
If you are entitled to claim a deduction for a watch or smart watch:
- you can claim for the cost of buying and maintaining the watch, including repairs, batteries and watchbands
- if the watch cost more than $300, you claim a deduction for its decline in value over its effective life
- you can only claim a deduction for the amount you use the item at work – if you also wear it for private purposes you must apportion your claim.
Example: specialty watch apportioned for private use
Bianca works on the police diving squad. She buys a diving watch that she uses every day for work. She also uses the watch when she goes diving recreationally.
As the watch cost more than $300, she can claim a deduction for the decline in value of the watch. However, Bianca would need to apportion the decline in value amount between her work and private use, and claim only the portion that relates to her work.End of example