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  • Tools, equipment and other assets

    If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost.

    On this page:

    If you use the tools for both work and private purposes you will need to apportion the amount you claim. If you have a computer that you use for private purposes for half of the time you can only deduct 50% of the cost.

    The type of deduction you claim depends on the cost of the asset:

    • for items that aren't part of a set and cost $300 or less, or form part of a set that together cost $300 or less, you can claim an immediate deduction for their cost
    • for items that cost more than $300, or that form part of a set that together cost more than $300, you can claim a deduction for their decline in value.

    Examples of tools, equipment or assets

    • Calculators
    • Computers and software
    • Desks, chairs and lamps
    • Filing cabinets and bookshelves
    • Hand tools, such as spanners, hammers and screwdrivers or power tools, such as grinders, sanders and hammer drills.
    • Protective items, such as hard hats, safety glasses, sunglasses, sunscreens and cosmetics containing sun protection
    • Professional libraries
    • Safety equipment
    • Technical instruments

    You can also claim the cost of repairing and insuring your tools and equipment and any interest on money you borrowed to buy these items.

    If you use items for both personal and work-related purposes you need to keep records, such as a diary to show the purpose of use of the item. So that, if requested, you can show how you apportioned the amount of personal and work-related use.

    For more information on tools, equipment and other assets see Occupation and industry specific guides.

    Cosmetics containing sun protection

    Personal items can perform more than one function, and so can have more than one use. For example, some creams and cosmetics can function both as a sun protection and as a cosmetic. Where the primary purpose of the item is for use as a cosmetic or the product is marketed as a cosmetic, it generally won't be treated as a sun protection product.

    You can only claim a deduction for the cost of a product containing sun protection if:

    • your work exposes you to the effects of the sun because you are required to perform your duties for prolonged periods outdoors
    • you wear a sunscreen while you are at work to protect you from that risk.

    If you use a sunscreen for private purposes and work purposes, you need to apportion for your private usage.

    You can't claim a deduction if:

    • your work doesn't require you to perform your duties in the sun for prolonged periods
    • you purchase a cosmetic with added sunblock protection.

    Cosmetics are designed to change a person's appearance or cleanse, perfume or protect an external part of the body. This means that they are usually a private expense and the addition of sun protection does not make them deductible.

    If your product is a sunscreen or a cosmetic

    The Department of Health, Therapeutic Goods Administration (TGA) regulates if a product is safe and effective as a sunscreen.

    Products regulated as therapeutic goods by the TGA include:

    • primary sunscreens (intended primarily for sun protection)
    • moisturisers containing sunscreen with Sun Protection Factor (SPF) greater than 15
    • sunscreens with ingredients from humans, cows, sheep, goats or mule deer organs
    • all sunscreens (with SPF 4 or more) that contain insect repellent.

    If a product is safe and effective as a sunscreen, it's given an Australian Register of Therapeutic Goods (ARTG ID) number by the TGA which is displayed on the product as an AUST L number.

    We accept any product with an ARTG ID and an AUST L number of the label as sunscreen rather than a cosmetic.

    To find out whether a product has been given an ARTG ID you can visit the TGA websiteExternal Link.

    Example – no deduction allowable deduction for products that are not a sunscreen

    Jackie is a teacher and has bought a cosmetic with added sunblock. Once a week, Jackie is required to supervise pupils at their sports afternoon outdoors. Jackie wears the cosmetic every day and she finds it suitable as sun protection but it isn't a sunscreen approved by the TGA. As Jackie uses the product primarily as a cosmetic, she will not be entitled to a deduction for the purchase of it even though she is exposed to the sun when she is performing her duties on sports afternoon.

    If the product Jackie purchased had been given an ARTG ID by the TGA, she would have to apportion the deduction she claimed for the product to account for her personal use. Her personal use would include the time Jackie does not spend in the sun performing her duties and any other time she wears the cosmetic outside school hours.

    End of example

     

    Example – no deduction allowable for products used for night duties

    Teegan is a hospitality worker and works at night at a restaurant. She bought a cosmetic with a high level sunblock to wear at all times. Although Teegan wears the cosmetic when she goes to work, her duties don't expose her to the effects of the sun and sun protection isn't required by her in the course of earning her income. Teegan isn't able to claim a deduction for the cosmetic.

    End of example

     

    Example – deduction allowed for cosmetic containing sunscreen

    Wendy works as a gardener and spends the majority of her working day outdoors. Wendy purchases a tinted moisturiser with a high level sunblock to use on her face when she is working along with a sunscreen for her arms and legs. Wendy doesn’t use these products when she isn't working. Wendy checks the TGA website and finds that both the products she uses have an ARTG ID.

    As Wendy is exposed to the sun for long periods as a result of performing her duties, the cost of the products is incurred in earning her assessable income and she is entitled to a deduction for the tinted moisturiser and sunscreen she purchases.

    End of example

    Handbags, briefcases and satchels

    You may be able to claim a deduction for a handbag, briefcase or satchel you buy to carry items for work purposes, such as laptops, tablets, work papers or diaries. The amount of the deduction will depend on the extent you use the bag for work purposes.

    You can't claim a deduction, if you use the bag predominantly for personal purposes, such as carrying your lunch and beauty and hygiene products. This is private use.

    When you use the bag for both private and income producing purposes, you may need to apportion the deduction you claim based on the amount of time you use the bag for work and for private purposes.

    Where you use the bag for work purposes and costs less than $300, you can claim the deduction immediately. Where the bag costs more than $300, you will generally work out any deduction using its effective life.

    Example – allowable deduction for a handbag

    Elizabeth buys a handbag for $150 to carry her tablet and work diary. The handbag is only used to carry the work items and she carries another bag for her personal items. She does not use the handbag that carries her tablet outside of work hours. As the bag is being used for the production of assessable income, Elizabeth can claim a deduction.

    End of example

     

    Example – no deduction is allowable for a satchel

    Arki buys a messenger satchel for $220 to carry his lunch and snacks, personal medical kit and private grooming items, as well as a mini tablet, which he uses in his income producing occupation. He also carries the satchel outside of work hours so the satchel is not predominantly used for the purposes of producing assessable income. Arki is not able to claim a deduction for the satchel.

    End of example

     

    Example – apportioned deduction for a handbag

    Theresa buys a large handbag for $280 to replace her current handbag, as she now regularly takes a small laptop type item and client paperwork to and from work. She continues to use her handbag to carry personal items and takes it with her outside of work hours. The large handbag is being used for both income producing and private purposes so the deduction would need to be apportioned between both uses.

    End of example

    Watch: Transporting bulky tools and equipment

    Media: Transporting bulky tools and equipment
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubx7d1ysExternal Link (Duration: 00:50)

    See also:

    Last modified: 18 Sep 2019QC 31938