Taxi, ride-share, public transport and car hire
You can claim a deduction for transport costs if you travel in the course of performing your work. For example, taking a taxi to the depot or the station because you have reached your maximum driving hours, or your employer requires you to travel from the depot to another location to start your work.
You can’t claim a deduction for travel expenses between home and work because these are private expenses.
You can't claim a deduction if your employer reimburses you for these expenses.
Tools and equipment
You can claim a deduction for tools and equipment you use to perform your duties as a train driver. For example, protective equipment such as ear plugs.
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 it 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 items such as lunch boxes, travel mugs, coolers or similar items that you use to take food and drink to work, or to use at work. This will be the case even if you are travelling overnight for work. These expenses are private.
You also can’t claim a deduction for tools and equipment that your employer or a third party supplies for use.
Example: deduction for tools essential to work
On 1 July, Alison a train driver buys a set of spanners for $100.
She uses these tools at work during the week and at home on weekends to work on her car.
As the set of spanners cost less than $300, Alison can claim an immediate deduction based on her work-related usage in the year she buys them. She uses them 5 out of 7 days at work. A reasonable basis for calculating the deduction is:
5 ÷ 7 × $100 = $71
If the set of spanners cost $400, Alison can't claim an immediate deduction for the total cost of the spanners. She can claim a deduction for their decline in value over the effective life of the tools.
Alison looks up the ATO website on the effective life of depreciating assets. It states the effective life for hand tools is 10 years.
She works out the deduction for the decline in value of her spanner set using the prime cost method:
Asset's cost × (days held ÷ 365) × (100% ÷ asset's effective life) × work use percentage
She has held the spanner set for 365 days and her work use percentage is 71%, that is:
$400 × (366 ÷ 365) × (100% ÷ 10) × 0.71 = $28.48
Alison can claim a deduction of $28 per year as deductible decline in value of her spanner set for 10 years.
End of example
Example: private expenses not deductible
Olivia is a train driver. She buys a travel mug to drink out of while she is driving as the movement of the train can cause spills.
Olivia can't claim a deduction for her travel mug. It is a private expense. This would be the case even if Olivia used the travel mug on a shift where she was required to travel for work and sleep away from home overnight.
End of exampleTravel expenses
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 to attend a work, health and safety 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/take your mandatory long rest break in the course of performing your employment duties, for example if you drive a train interstate and return home the same day or without taking your mandatory long rest break
- 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 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:
- accommodation
- meals
- incidentals.
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.
However, you must keep written records for all your overseas accommodation expenses.
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.
Example: away from home overnight, no allowance
Joe is a long-haul train driver. He works shifts that require him to take a long mandatory rest break while travelling for work. He travels to a station where he hands the train over to another driver and takes his break at the company-paid accommodation.
Joe buys himself dinner at a restaurant nearby and breakfast at the local bakery. After his rest break, Joe takes over a train from another driver and drives back to his home depot. Joe doesn't receive a travel allowance for the travel.
Joe can't claim a deduction for the accommodation as his employer provides it and he incurs no cost.
Joe can claim the cost of his meals because he incurs the cost as a result of having to sleep away from home when travelling for work. As he didn't receive a travel allowance, he needs to get and keep receipts for the meal expenses he incurred.
End of example
Example: travel allowance not on income statement
Juan is a long-haul train driver. He travels away from home for 4 nights. His employer pays him a travel allowance of $50 to cover his food and drink for each night that Juan was away (a total of $200 for the journey). Accommodation is provided by Juan's employer at the depots he stops at for his mandatory long rest breaks. The allowance is less than the reasonable amount and is not shown on his income statement.
Juan spent the whole $200 on food and drink while travelling away from home for work. Juan is not required to include the amount as income in his tax return as:
- his allowance is not shown on his income statement
- his allowance doesn't exceed the reasonable amount set
- he spent the whole amount on deductible expenses
- he did not spend more than the reasonable amount.
Juan can’t claim any deductions for the amounts he spent on food and drink.
Juan can't claim a deduction for accommodation because he stays in employer provided accommodation.
End of exampleFor more information, see TD 2023/3 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2023–24 income year?
Union and professional association fees
You can claim a deduction for union and professional association fees you pay. You can use your income statement or payment summary as evidence of the amount you pay if it's shown on there.
Watches and smart watches
You can't claim a deduction for the cost of buying or maintaining watches or smart watches, even if they are required as part of your uniform. This includes chronograph watches as they are a private expense.
However, you can claim a deduction if your watch has special characteristics that you use for a work-related purpose. For example, a nurse's fob watch.
If the watch cost more than $300, you can claim a deduction for its decline in value over the effective life.
You can claim a deduction for the cost of repairs, batteries and watchbands for special watches. You only claim a deduction for the amount you use the item at work if you also wear it for private purposes.
Similar to ordinary watches, a smart watch (that connects to a phone or other device to provide notifications, apps and GPS, for example) is a private expense and not deductible under ordinary circumstances.
However, if you require some of the smart watch's functions as an essential part of your employment activities, you may be able to apportion the expense between your private and work use. In order to show your work-related use of the watch, you will need to keep a diary or similar record of your use of the watch for a representative period.
Example: smart watch not deductible
Birrani is a local train driver and drives trains across the Sydney rail network to a strict time schedule.
Birrani buys a watch which he uses to check that his train is running on time.
Even though Birrani uses his watch while working, he can't claim a deduction for buying and maintaining the watch as the expenses are private in nature.
End of exampleFor more train driver expenses: