Details on claiming common real estate employee expenses.
You can claim a deduction for tools and equipment if you use them to perform your duties as a real estate employee.
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 your employer or a third party supplies for use.
Example: claiming proportion of decline in value
Jessica buys a camera for $400 to take photographs of client properties for advertising purposes. Jessica also uses the camera to take family photographs.
Jessica can claim a deduction for the proportion of the decline in value based on her work use of the camera.End of example
You can claim a deduction for travel expenses you incur when your work requires you to:
- 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 haven’t incurred 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 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 received 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.
You can claim a deduction for wages you pay someone to provide you with services and assistance directly relating to your employment activities if you only earn commission income.
You will need to demonstrate that the arrangement is not a private arrangement and that hiring the person allows you to earn additional income from your employment activities.
Example: deduction for wages
Claire is a real estate salesperson and works on a commission-only basis. Claire hires Jake on a casual basis as an administration support person. Jake works for 8 hours on a Saturday and 4 hours on a Wednesday and Claire pays him the rate per hour for casuals listed in the relevant Award.
The 2 days that Jake works, are the days when Claire holds her open houses. Jake assists Claire on these days by taking all the potential buyers' details and showing buyers around the property if Claire is already showing other potential buyers around.
Due to Claire having more time to spend with serious buyers and being able to send Jake onto the next open home if she is held up with a potential buyer, Claire has increased her sales and her commission since hiring him.
Claire can claim a deduction for the wages she pays to Jake each week because there is a clear connection with the income she earns from her employment activities.End of example
Example: no deduction for wages
Pawel is employed as a real estate salesperson and he only receives commission income. He pays his son $100 a week to answer the home phone when he is not around.
Pawel does not expect his son to be at home at certain times and if he doesn't answer the phone, it will divert to Pawel's mobile. Pawel rarely gives his home phone number out to clients.
Pawel can't claim a deduction for the amount he pays his son as there is no connection between the expense and his employment activities.End of example
If you are paying wages to a relative, a deduction is only available to the extent it is no more than a reasonable payment for the service performed. A reasonable payment is the amount the employee would be expected to pay to an unrelated person who had similar skills and experience in the same role.
Example: overpayment of wages
Verity is an employee real estate agent who works on a commission-only basis. She pays her son $50 an hour to deliver advertising leaflets in the region in which she operates. The market rate for such a service is only $21 per hour.
Verity can't claim a deduction of $50 per hour for the wages she pays to her son. Verity can only claim a deduction of $21 per hour as wage expenses.End of example
You may be able to claim a deduction for working from home expenses you incur as an employee. These can be additional running expenses such as electricity, the decline in value of equipment or furniture, phone and internet expenses. You must:
- use one of the methods set out by us to calculate your deduction
- keep records required for the method chosen.
There are some expenses you can't claim a deduction for as an employee. Employees who work at home can't claim costs:
- for coffee, tea, milk and other general household items your employer may provide you at work
- for your children and their education including
- setting them up for online learning
- teaching them at home
- buying equipment such as iPads and desks
- if your employer pays for or reimburses you for the expense
- for the decline in value of items provided by your employer – for example, a laptop or a phone.
Generally as an employee, you can’t claim occupancy expenses (rent, rates, mortgage interest and house insurance premiums), unless your home is your 'place of business'.
You can’t claim a deduction if your employer paid for your home office to be set up or they reimbursed you for the expense.
Use the Home office expenses calculator to help you work out the amount you can claim as a deduction for work from home expenses.
Example: working from home expenses
Rob is an employee salesperson who prepares property advertisements in the lounge room while other family members are watching television. Rob can't claim a deduction for the cost of lighting and heating/cooling the room because he doesn't incur any additional cost as a result of working in the lounge room. The expenses are private and domestic.
However, if Rob uses the room at a time when others are not present, or uses a separate room, he can claim a deduction for additional running expenses associated with his work activities. This applies even if the room is not set aside solely as a home office.
The amount that Rob can claim as a deduction is the difference between what was actually paid for heating, cooling and lighting, and what would have been paid if he hadn't worked from home.End of example
For more information, see:
- PS LA 2001/6 Verification approaches for home office and electronic device expenses
- TR 93/30 Income tax: deductions for home office expenses
- PCG 2023/1 Claiming a deduction for additional running expenses incurred while working from home - ATO compliance approach
For more real estate employee expenses, see:
- Real estate employee expenses A–F
- Real estate employee expenses G–O
- Real estate employee expenses P–S
Find out about real estate employees':