Details on claiming factory worker expenses.
You can’t claim a deduction for transport expenses (taxi, ride-share, public transport or car hire) between home and work, these are private expenses.
You can claim a deduction for transport costs if you travel in the course of performing your work. For example, taking a taxi from your regular workplace to another work location.
You can't claim a deduction if your employer reimburses you for these expenses.
You can claim a deduction for tools and equipment if you use them to perform your duties as a factory worker, such as an air compressor, drill or hammer as well as tool insurance.
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 a deduction for the full amount in the year you buy it, if:
- you use it mainly for work purposes
- 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
- 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 also claim a deduction for the cost of repairs to tools and equipment that you use for work purposes.
You can’t claim a deduction for tools and equipment that are supplied by your employer or a third party.
Example: decline in value of tools
Stanley is a wood processing factory worker who owns an electric saw. He uses the saw at work during the week and at home on weekends for his home renovations. He buys the electric saw for $650 on 1 October 2021.
Stanley can claim a deduction for the decline in value of the electric saw. However, he can only claim a portion of the decline in value that relates to his work use of the electric saw. Stanley can also only claim for the period of the income year that he owns the saw.
Stanley checks the effective life and finds it is 5 years and decides to use the prime cost method. As Stanley uses the saw 5 days per week for work and 2 days for private purposes, he calculates his work-related use as 5 days ÷ 7 days.
Stanley calculates his deduction as:
Asset's cost × [days held ÷ 365] × [100% ÷ Asset's effective life]
$650 × [273 days ÷ 365 days] × [100% ÷ 5 years] = $347.25
Stanley claims a deduction of $347.25 for the decline in value of his electric saw in his income tax return.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 the travel (incidentals). For example, when you travel interstate to attend a work-related conference, seminar or training course.
You can't claim a deduction for travel expenses where you don’t incur any expenses, because you either:
- 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 fly interstate and return home the same day, or you choose to sleep near your workplace rather than returning home.
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 work 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 shown 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 have 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 are not required to keep written evidence such as receipts, you must be able to explain your claim and show you spent the amounts. For example, show your work diary, that you received and correctly declared your travel allowance and bank statements.
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.
For more factory worker expenses, see: