Car expenses
You can't claim a car expenses deduction for normal trips between your home and regular place of work. These are private expenses, even if you:
- live a long way from your usual or regular workplace
- have to work outside normal business hours (for example, weekend or early morning shifts).
In limited circumstances, you can claim the cost of trips between home and work, where you carry bulky tools or equipment for work or where you had shifting places of employment.
To be able to claim a deduction for the cost of trips between home and work while carrying bulky tools or equipment, all of the following conditions must be met:
- the tools or equipment are essential to perform your employment duties
- the tools or equipment are bulky, meaning that
- because of the size and weight, they are awkward to transport
- they can only be transported conveniently using a motor vehicle
- there is no secure storage for such items at the workplace.
It will not be sufficient if you transport the tools or equipment merely as a matter of choice. For example, if your employer provides secure storage, your decision to transport items home will be a matter of choice.
You are considered to have shifting places of work where you have no fixed place of work and you continually travel from one work site to another before returning home.
You can also claim a deduction for the cost of using a car you own, lease or hire (under a hire-purchase agreement) when you drive:
- directly between separate jobs on the same day – for example, travelling from your first job as a recruitment consultant to your second job as a motivational speaker
- to and from an alternative workplace for the same employer on the same day – for example, travelling from your office to a client's workplace for an onsite meeting
- from home directly to an alternative workplace – for example, travelling from home to meet a client at their business premises which is not your regular work location.
You can't claim car expenses for a car you use under a salary sacrifice or novated lease arrangement. This is because it's usually your employer leasing the car from the financing company and making it available for your use. You can however claim additional work-related expenses you incur that are associated with your work use of the car such as parking and tolls.
To claim a deduction, you must keep records of your car use. You can choose between the logbook method or the cents per kilometre method to work out your deduction.
If you use the logbook method, you need to keep a valid logbook to help you work out the percentage of work-related use along with written evidence of your car expenses.
If you use the cents per kilometre method, you need to be able to show how you work out your work-related kilometres. You must be able to show that the kilometres travelled were work-related.
If you claim your work-related car expenses using one of the above methods, you can’t claim any further deductions in the same tax return for the same car. For example, petrol, servicing, and insurance costs.
To claim a deduction in your tax return, include the amount of your claim at Work-related car expenses. The Work-related car expenses calculator can help you work out the amount you can claim as a deduction.
You can’t use the cents per kilometre or logbook methods to work out your claim for a:
- motorcycle
- vehicle with a carrying capacity of one tonne or more (such as a ute)
- vehicle that can transport 9 passengers or more (such as a minibus).
For these vehicles, you can claim the actual expenses you incur for your work-related travel. This includes costs such as fuel, oil, insurance, and loan interest along with the decline in value of the vehicle. You must keep receipts for all your expenses and records to show your work-related use of the vehicle. Although you aren't required to keep a logbook, it is the easiest way to calculate your work-related use of the vehicle.
To claim a deduction for actual expenses you incur for a vehicle not defined as a car, include the amount at Work-related travel expenses.
Example: alternative workplace that isn't a regular workplace
Lachlan is an employer relationship manager, who travels from his normal workplace to a conference centre to attend a seminar on interviewing essentials.
After the conference he travels directly back to his normal workplace and then home.
Lachlan can claim the cost of each journey between his workplace and the conference centre as a deduction as the trips are for work purposes.
End of example
Example: travelling from home to an alternative workplace
Kirsten is a recruitment consultant who looks after a large number of clients. Kirsten dedicates two mornings a week to complete on site client meetings at their respective offices. She travels from her home directly to a client's office to complete her meeting before travelling to her normal workplace.
Kirsten can claim a deduction for the travel between:
- her home and a client's office
- one client's office and another
- a client's office and her normal workplace.
Child care
You can't claim a deduction for the cost of child care (including school holidays and before and after school care) when you're working. It's a private expense, and the expenses have no direct connection to earning your income.
Clothing and uniform expenses (including footwear)
With a few exceptions, clothing can't be deducted as a work-related expense.
You can't claim conventional clothing (including footwear) as a work-related expense, even if your employer requires you to wear it and you only wear these items of clothing at work.
'Conventional clothing' is everyday clothing worn by people regardless of their occupation – for example, business attire worn by recruitment consultants.
You can claim a deduction for costs you incur to buy, hire, repair or replace clothing, uniforms and footwear you wear at work if it's in one of the following categories:
- protective – clothing with protective features and functions that you wear to protect you from specific risks of injury or illness at work. For example, steel-capped boots, fire-resistant clothing, or boiler suits that protect conventional clothing. Conventional clothes you wear at work are not regarded as protective clothing if they lack protective qualities designed for the risks of your work. This includes jeans, drill shirts, shorts, trousers, socks, closed shoes.
- occupation-specific – clothing that distinctly identifies you as a person with a particular profession, trade or occupation. For example, a judge's robes or a chef's chequered pants. Items traditionally worn in a profession are not occupation-specific where the clothing is worn by multiple professions.
- a compulsory uniform – that your employer strictly and consistently enforces you wear by workplace agreement or policy and distinctly identifies either
- you as an employee working for a particular employer
- the products or services your employer provides.
- a non-compulsory uniform - that your employer registers on the Register of Approved Occupational Clothing and you wear the uniform at work.
You can't claim a deduction if your employer buys, repairs or replaces your clothing.
Example: conventional clothes worn with a uniform
William's employer requires him to buy and wear a navy-blue polo shirt with his employer's logo embroidered on it while at work. The employee guidelines further include a requirement that all employees wear black pants and closed in black shoes, but don't stipulate any other qualities of those items.
William can claim a deduction for buying the polo shirt with the logo as it is a compulsory uniform.
He can't claim the cost of buying the black pants or shoes as they are conventional. Even though his employer requires him to wear a specific colour, they are not distinctive enough to make them part of his uniform and are conventional clothes.
End of example
Example: purchase of conventional clothing
Rhia is a key account manager. Her employer requires dress standards that she must comply with and wear office appropriate attire while at work.
Rhia buys several blouses, skirts and dresses from a clothing store that sells corporate attire.
Rhia can't claim the cost to buy these items as they are conventional clothing and private in nature. Even though she only wears these items to work and her employer tells her to wear them doesn't make them deductible.
End of exampleDrivers licence
You can't claim a deduction for the cost to get or renew your drivers licence, even if you must have it as a condition of employment. This is a private expense.
Entertainment and social functions
You can't claim a deduction for the cost of any entertainment, fundraising or social functions. This applies even if they are compulsory, non-compulsory or you discuss work matters at the event.
Entertainment and social functions include the cost of:
- work breakfasts, lunches or dinners
- attendance at sporting events
- gala or social nights
- concerts or dances
- cocktail parties
- other similar types of functions or events.
These are private expenses because these events do not have a direct connection to your income-producing activities. You also can’t claim the cost of travelling to and from functions.
Example: buying meals for clients
Paul is a recruitment consultant and regularly buys lunch for his clients when holding business meetings. His employer provides him with a company credit card to cover these types of costs, however on occasion he forgets and uses his own personal credit card.
Paul doesn't request reimbursement from his employer and instead intends to claim these amounts as a work-related deduction in his income tax return.
Paul can't claim a deduction for these expenses as they are for entertainment (food and drink) and are private in nature. Even though Paul was discussing work related matters it doesn't make them deductible. Paul will need to seek reimbursement from his employer.
End of example
Example: cost of attending work functions not deductible
Vanessa is a client attraction manager and during the income year she attends a number of functions such as lunches, cocktail parties and dinners where she engages with potential new clients. Vanessa is always trying to attract new candidates to match them with appropriate positions within her client's companies.
Even though Vanessa conducts work-related discussions at these events, she can't claim a deduction for the cost of attending these functions. The expense is for entertainment (food and drinks).
End of example
Example: networking event not deductible
Trevor attends a recruitment consultant meet and greet breakfast. The event is held each quarter and costs $35 to attend which his employer pays for.
Trevor must pay for parking and any additional costs he incurs in attending the event. The purpose of the event is to encourage recruitment consultants to meet socially and network with their colleagues.
Trevor can't claim a deduction for his parking or other amounts he spends to attend the breakfast. The expenses are private. as it is an entertainment expense. He also can't claim a deduction for the amount his employer pays ($35) for him to attend.
If Trevor was entitled to a deduction, he couldn’t claim the $35 cost to attend as his employer pays that expense directly.
End of exampleFines and penalties
You can't claim a deduction for any fines or penalties you get when you travel to work or during work. Fines may include parking and speeding fines or penalties. For example, if you receive a parking fine for parking illegally when attending a meeting with a client, you can't claim a deduction for it.
For more recruitment consultant expenses, see:
- Recruitment consultant expenses G–O
- Recruitment consultant expenses P–S
- Recruitment consultant expenses T–W