From 1 July 2021, you can claim a deduction for the cost of a COVID-19 test if:
- the test is to determine if you can attend or remain at work
- the test is either a
- polymerase chain reaction (PCR) test through a private clinic
- test listed in the Australian Register of Therapeutic Goods, including rapid antigen test (RAT) kits
- you pay for the test yourself (that is, your employer doesn't give you a test or reimburse you for the cost)
- you keep a record to prove that you incurred the cost (usually a receipt).
The deduction is available to employees, sole traders and contractors.
You can only claim a deduction for a COVID-19 test that was used by you to determine whether you may attend or remain at work. For example, if you buy a multipack of COVID-19 tests and some of these tests are used for private purposes (such as by other family or household members or for leisure activities), you must only claim a deduction for the portion of the expense you used for a work-related purpose.
We will accept claims for a deduction for the COVID-19 tests in the income year you paid for the tests if the purpose of buying the tests was solely for a work-related purpose and this intention has not changed for any unused tests remaining at the end of an income year. This is to make it easier for you to comply with your tax obligations.
You can't claim the cost of a COVID-19 test where any of the following apply:
- you use the test for private purposes – for example, to test your children before they attend school or day care
- you are reimbursed for the expense by your employer or another person
- you received a free COVID-19 test
- you work from home and don't attend another place to either gain or produce your assessable income, or to carry on a business for that purpose.
You also can’t claim a deduction for the travel or parking expenses you incur to buy your COVID-19 test. This isn't part of the cost of the test.
Example: COVID-19 tests you can claim
Mary is a casual employee at a local café. In April 2022 she buys a box of 5 qualifying COVID-19 tests, that she only uses before starting a shift if she has any COVID-19 symptoms or has been in contact with a person who has COVID-19. Her employer doesn't reimburse her for the cost of the COVID-19 tests.
As Mary uses all 5 tests to check her COVID-19 status before starting a shift, she can claim a deduction for the total cost of the box of 5 COVID-19 tests.End of example
Example: personal and work-related use and deductibility
Vinh buys a box of 2 COVID-19 tests at the local pharmacy for $20. He uses one test to confirm he doesn't have COVID-19 before attending a local sporting event. A week later he realises that he has been exposed to COVID-19 and uses the other test to check his COVID-19 status before attending his place of work.
As Vinh uses only one of the tests to determine whether he can attend work, he can only claim a deduction of 50% ($10) of the purchase price he paid for the pack of 2 tests.End of example
You need to keep records of COVID-19 tests to show that you paid for the test and it was for a work-related purpose. This may include a receipt or invoice, and evidence such as:
- correspondence from your employer stipulating the requirement to test
- your employer's COVID-19 safety plan or policy
- relevant state health advice or requirements
- diary notes made by you that you used a test to determine whether you could attend or remain at work.
If you don't have a record of your expenses before the law changed on 31 March 2022, we will accept reasonable evidence of your expenses. This may include:
- bank and credit card statements
- a diary or other documents, including receipts, that shows a pattern of buying COVID-19 tests after the law change that could reasonably have applied from 1 July 2021.
Once you calculate your deduction, if you're an employee enter the amount at Other work-related expenses in your tax return. Include in the description 'COVID-19 tests'.
If you are a sole trader or contractor, enter the amount at All other expenses in your Business and professional items schedule.Deductions if you pay for a COVID-19 test for a work-related purpose.