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  • Mining site employees – income and work-related deductions

    If you earn your income as a mining site employee, this guide will help you work out what:

    • income and allowances to report
    • you can and can't claim as a work-related deduction
    • records you need to keep.

    Find out about mining site employees:

    Income – salary and allowances

    Include all the income you receive during the income year in your tax return, this includes:

    Don't include reimbursements.

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

    Salary and wages

    You must include your salary and wages as income in your tax return. Include any bonuses.

    Allowances

    Include all allowances shown on your income statement or payment summary as income in your tax return.

    While all allowances you receive from your employer are income (apart from a living-away-from-home allowance which is a fringe benefit), you can't always claim a deduction if you receive an allowance – it depends on the situation.

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

    Allowance types, reasons and deductibility

    Reason for allowance

    Example of allowance type

    Deduction (Yes or No)

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

    Industry allowance

    No

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

    Compensation for industry peculiarities

    Underground allowance

    No

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

    An amount for certain expenses

    Tool allowance

    Yes

    If you incur deductible expenses

    An amount for special skills

    A first aid certificate

    Yes

    If you incur deductible expenses

     

    Example: allowance is assessable income, no deduction allowable

    Joe is a leading hand on a mine site. For each week he is a leading hand, his employer pays him an allowance. At the end of the income year, the allowance is shown on Joe's income statement.

    Joe must declare the leading hand allowance as income in his tax return.

    Joe can't claim a deduction because he doesn't incur any deductible expenses. The allowance compensates him for his special duties. It is not to help pay for any work-related expenses that Joe may incur.

    End of example

     

    Example: allowance is assessable income, no deduction allowable

    Wei-Li is an electrician on a mine site. Wei-Li's employer doesn't supply her with the tools she requires to carry out her duties. Instead, they pay her a weekly allowance of $16 which is shown on her income statement at the end of the income year.

    During the income year, Wei-Li buys some hand tools which she uses only for carrying out her employment duties. The hand tools cost of $243.

    Wei-Li must declare the total allowance of $832 ($16 × 52 weeks) as income in her tax return.

    Wei-Li can claim a deduction of $243 for the hand tools in her tax return.

    End of example

    Difference between allowances and reimbursements

    An allowance doesn't include a reimbursement.

    If your employer pays you:

    • an amount based on an estimate of what you might spend, such as paying cents per kilometre if you use your car for work, then it's an allowance
    • for the actual amount of the expense (either before or after you incur the expense), such as paying for the petrol you use if you use your car for work, it's a reimbursement

    Allowances not on your income statement or payment summary

    Your employer may not include some allowances on your income statement or payment summary. This can apply to travel allowances and overtime meal allowances paid under an industrial law, award or agreement. You can see these allowances on your payslips.

    If the allowance isn't on your income statement or payment summary, and you:

    • spent the whole amount on deductible expenses, you  
      • don't include it as income in your tax return
      • can't claim any deductions for these expenses
    • spent more than your allowance, you  
      • include the allowance as income in your tax return
      • can claim a deduction for your expense, if you're eligible.

    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. We don't consider a reimbursement to be an allowance.

    If your employer reimburses you for expenses you incur:

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

    Find out about mining site employees:

      Last modified: 09 Jun 2022QC 19678