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Income and allowances

Last updated 7 June 2023

Income and allowance amounts you need to include in your tax return and amounts you don’t include.

Amounts you do and don't include

You must include all the income you receive as a bus driver during the income year in your tax return, regardless of when you earn it, including:

  • salary and wages, including cash or bonus payments
  • allowances
  • compensation and insurance payments – for example, payments made under an income protection insurance policy to replace salary and wages.

Don't include as income any reimbursements you receive.

Your income statement or a payment summary will show your salary, wages and allowances for the income year.

Allowances

You must include all allowances your employer reports on your income statement or payment summary as income in your tax return.

An allowance is where your employer pays you an amount as an estimate of costs you might incur:

  • to help you pay for a work expense – for example, tools and equipment
  • as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, driving in the rain
  • as an amount for having special duties, skills or qualifications – for example, first aid qualifications.

Your employer may not include some allowances on your income statement. Find out about declaring income and claiming deductions for Allowances not on your income statement.

Allowances not on your income statement

If you receive an allowance from your employer, it does not automatically mean you can claim a deduction.

Your employer may not include some allowances on your income statement, you will find these amounts on your payslip. You don't need to declare these allowances as income in your tax return, unless you're claiming a deduction. Examples include travel allowances and overtime meal allowances.

If you spend the allowance amount on work expenses, you:

  • don't include it as income in your tax return
  • can't claim any deductions for the work expenses the allowance covers.

If you're not claiming a deduction, you don't need to keep any records of the amounts you spend.

If you spend your allowance on a deductible work-related expense, to claim a deduction you:

  • include the allowance as income in your tax return
  • include a claim for the work expenses you incur in your tax return
  • must have records of your expenses.

If you can claim a deduction, the amount of the deduction is not usually the same amount as the allowance you have receive.

Allowances and claiming a deduction

The following table sets out allowances you may receive and when you can claim a deduction.

Allowance types, reason for the allowance and if you can claim a deduction

Reason for allowance

Example of allowance type

Deduction (Yes or No)

Compensation for an aspect of your work that is unpleasant, special or dangerous or for industry peculiarities

Work in the rain allowance

Articulated bus allowance

No

These allowances don't help you pay for deductible work-related expenses

An amount for certain expenses

Overtime meal allowance

Yes

If you incur deductible expenses

An amount for special skills

A first aid certificate

Yes

If you incur deductible expenses

 

Example: allowance assessable, no deduction

Joel is a local bus driver. Joel drives an articulated bus on the third of his 5 shifts each week.

Joel's employer pays him $14.08 for each of the shifts he drives the articulated bus. At the end of the income year, Joel's employer shows the total allowance of $2,027 on his income statement.

Joel must include the allowance of $2,027 as income in his tax return.

Joel can't claim a deduction because he doesn't incur any deductible expenses. The allowance compensates him for a special aspect of his job, not to cover work-related expenses.

End of example

 

Example: allowance assessable, deduction allowed

Sanjay is an employee bus driver. His employer requires Sanjay to wear a compulsory uniform, which consists of a shirt and pants with his employer's logo on them, when he is on duty. The uniform is not provided by Sanjay's employer, but they pay him a uniform allowance of $500.

During the income year, Sanjay buys 5 shirts and 5 pairs of pants at a cost of $350.

Sanjay must declare the allowance of $500 as income in his tax return.

Sanjay can claim a deduction of $350 as a deduction for the uniform items he buys.

End of example

Reimbursements

If your employer pays you the exact amount for expenses you incur (either before or after you incur them), the payment is a reimbursement.

A reimbursement isn't considered to be an allowance.

If your employer reimburses you for expenses you incur:

  • you don't include the reimbursement as income in your tax return
  • you can't claim a deduction for the expenses.

Find out about bus drivers:

QC61150