You can claim a deduction for tools and equipment you use to perform your duties as an agricultural worker. For example, a chainsaw or fencing tools.
You can only claim a deduction for the work-related use of the item.
If the tool or equipment cost you $300 or less, you can claim an immediate deduction in the year you buy it, if:
- you use it mainly for work purposes (more than 50% of the time)
- it's not part of a set that together cost more than $300.
You can claim a deduction for the cost over the life of the item (that is, decline in value) if the tool or equipment:
- cost more than $300
- the item is part of a set that together cost more than $300.
If you bought the tool or item of equipment part way through the year, you can only claim a deduction for the decline in value for the period of the income year that you own it. To work out your deduction use the Depreciation and capital allowances tool.
You can't claim a deduction for tools and equipment that your employer or a third party supplies for use.
Example: decline in value (no immediate deduction)
Luke is a fencer and needs a new set of 16 spanners for work. He couldn't afford the full cost of $330, so he bought them all individually through the income year.
Although they only cost $22 each, Luke can't claim an immediate deduction for the spanners. This is because they are part of a set he bought in the income year that cost more than $300. Luke can claim a deduction for the decline in value of the spanner set, which in the end cost him $352.
If in the following year, Luke breaks one of the spanners and has to buy a replacement, he can claim an immediate deduction for the replacement. The replacement spanner won’t be part of a set Luke bought in that income year that cost more than $300.End of example
Example: decline in value over effective life
Tal purchases a ride on mower on 5 September for $1,500 and only uses it for work purposes.
He visits our website and looks up our ruling on the effective life of depreciating assets. The ruling says the effective life of ride on mowers is 5 years.
He works out the deduction for decline in value of his ride on mower using the prime cost method:
Asset cost × (days held ÷ 365) × (100% ÷ 5 years)
If Tal had used the ride on mower for private purposes as well, he would have to multiply the amount calculated using the formula above by the work-related use percentage.
Tal works out that he held the ride on mower for 300 days and calculates his deduction for decline in value as:
$1,500 × (300÷ 365) × (100% ÷ 5) = $247
Tal can claim a deduction of $247 for the decline in value of his ride on mower in the year that he buys it. Using the same method, he will also be able to claim $300 per year in the following 4 years and $53 in the final (sixth) year.End of example
You can claim a deduction for travel expenses you incur when your work requires you to both:
- travel for work
- sleep away from your home overnight in the course of performing your employment duties.
Expenses you can claim include your accommodation, meals and expenses which are incidental to your travel (incidentals). For example, during the mustering season when travelling for days in remote or isolated areas of Australia or carting cattle long distances between farms.
You can't claim a deduction for travel expenses where you don't incur any expenses, because:
- you slept in accommodation your employer provides
- you eat meals your employer provides
- your employer or a third party reimburses you for any costs you incur.
You also can't claim a deduction if you:
- are not required to sleep away from your home overnight in the course of performing your employment duties – for example, if you drive interstate for work and return home the same day
- you choose to sleep near your workplace rather than returning home, for example you rent accommodation near your workplace and stay there because you live a long way from where you work.
Receiving an allowance from your employer doesn’t automatically mean you can claim a deduction. In all cases you must be able to show:
- you were away overnight
- you have spent the money
- the travel directly relates to earning your employment income
- how you worked out your claim.
If you receive a travel allowance you must include it as assessable income in your tax return unless all of the following apply:
- the travel allowance is not on your income statement or payment summary
- the travel allowance doesn't exceed the Commissioner's reasonable amount
- you spent the whole allowance on deductible accommodation, meal and incidental expenses, if applicable.
The Commissioner's reasonable amount is set each year. The amount is used to determine whether an exception from keeping written evidence applies for the following expenses which are covered by a travel allowance:
You don’t need to keep written evidence such as receipts if both of the following apply:
- you receive a travel allowance from your employer for the expenses
- your deduction is less than the Commissioner’s reasonable amount.
If you claim a deduction for more than the Commissioner’s reasonable amount you need to keep receipts for all expenses, not just for the amount over the Commissioner’s reasonable amount.
Even if you're not required to keep written evidence such as receipts, you must be able to explain your claim and show you spent the amounts.
Example: remote and isolated areas travel expenses
Dani is a ringer and works on a goat farm in outback Australia. Twice a year she goes on muster in rugged gorge country to round up the goats for health checks, treatments and branding.
The muster usually takes between 5 and 7 days. While she is away, Dani sleeps in a tent as there is no accommodation available in these remote areas. Dani buys her tent and sleeping equipment herself and only uses them when on muster when she is required to sleep away from home. Dani can claim a deduction for tent and equipment.
If the tent cost more than $300, Dani can only claim a deduction for the decline in value of the asset.End of example
Example: reasonable allowance amount
Antoni travels from Adelaide to Mt Gambier for a job. He was away from home for 5 nights and his employer pays him a travel allowance of $110 per night for accommodation, meals and incidentals. The allowance isn't shown on his income statement.
The travel allowance amount paid to Antoni is less than the reasonable allowance amount and he spends all of the travel allowance on his travel expenses.
Antoni doesn't include his allowance on his tax return because:
- it's not shown on his income statement
- it's less than the reasonable allowance amount
- he spends it all to cover his travel expenses.
This means Antoni can't claim a deduction for his expenses in his tax return.End of example
For more information, see TD 2022/10 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2022-23 income year?
You can claim a deduction for union and professional association fees you pay. You can use your income statement as evidence of the amount you pay if it's shown on there.
You can claim a deduction for the costs associated with a working dog or horse, if the following criteria are met:
- you use the animal in carrying out your work duties – for example, your duties require you to herd cattle or livestock and the animal assists you in doing this
- it is a requirement of your employment that you provide your own animal
- you train the animal for their role from a young age and don't treat them like pets – for example, a cattle dog puppy is trained to herd cattle or livestock.
Costs you incur can include food, vet bills and miscellaneous items like the decline in value of a saddle.
You can't claim for the initial cost of buying the animal as this is a capital expense. However, you can claim a deduction for the decline in value of the working animal.
You can't claim a deduction if your employer provides the animal, pays for the animal's expenses or reimburses you for the expenses.
For more agricultural worker expenses, see: