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  • Car expenses

    You can claim the cost of using your car for work-related travel you incur in the course of performing your job as an employee if you travel:

    • directly between two separate workplaces because you have two different employers – for example, you have a second job
    • for work-related purposes from your normal workplace to an alternative workplace that is not a regular workplace and back to your normal workplace or directly home – for example, if you travel from client to client
    • between home and work, only if  
      • your home is considered a base of employment and you either commence work at home and travel directly to another base of employment to continue working, or travel from another base of employment to home to continue working
      • you travel from your home to an alternative workplace that is not a regular workplace for work activities and then to your normal workplace or directly home
      • you have to carry bulky tools or equipment that you use for work and there is no secure area for storing your tools or equipment at work.
       

    You can't claim a deduction for the cost of normal trips between home and work, even if:

    • you did minor tasks – for example, picking up the mail on the way to work or home
    • there was no public transport near where you worked so you used a car.

    You can work out your travel expenses deductions using the Work-related car expenses calculator.

    See also:

    Claiming car expenses

    If you are entitled to claim a deduction for your work-related car expenses you incur in the course of performing your job as an employee, there are two methods you can use to work out the amount you can claim.

    The two methods are the:

    The Work-related car expenses calculator helps calculate the amount you can claim as a deduction for car expenses.

    Cents per kilometre method

    When working out deductions using the cents per kilometre method:

    • you can claim only up to the first 5,000 business kilometres you travel
    • you do not need receipts or other written evidence but we may ask you to show how you worked out your estimate of business kilometres – for example  
      • by using a diary of work-related travel
      • by basing your costs on a regular pattern of travel.
       

    Logbook method

    To work out your deduction using the logbook method, you must keep all of the following:

    • a logbook – to work out the percentage of your car use that was for work purposes. Your logbook must cover a period of 12 continuous weeks and is valid for five years
    • odometer records – record you opening and closing odometer readings for each you use the logbook method
    • receipts and other written evidence for all car expenses – you can use your odometer readings to estimate your fuel and oil costs instead of keeping receipts.

    See also:

    Clothing expenses

    You can claim a deduction for the cost of buying, hiring, mending or cleaning certain clothing that is unique and distinctive to your job and you use solely for earning income, including costumes and lingerie.

    You can't claim a deduction for items such as dresses, skirts, blouses, trousers, shirts and shoes for everyday use.

    If your claim for laundry expenses is more than $150 and your total claim for work-related expenses exceeds $300, you need written evidence for the total claim. You can claim the cost of dry-cleaning work clothes if you have kept written evidence to substantiate your claim. You do not need written evidence if your total claim for work-related expenses is $300 or less.

    Clothing expenses you can't claim

    You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it – for example, standard jeans, shirts and trousers.

    See also:

    Equipment expenses

    You can claim the cost of replacing or repairing equipment (such as fetish equipment), adult novelties (such as vibrators), and other items you use in your work.

    You can claim an immediate deduction for equipment you purchase and use for work costing $300 or less.

    You can't claim an immediate deduction if:

    • the equipment is part of a set that you buy in the same income year and the total cost of the set is more than $300 (the set rule), or
    • the equipment is one of a number of identical or substantially identical items you buy in an income year and the total cost of these items is more than $300 (the multiples rule).

    Capital allowances

    If the cost of purchasing tools or equipment is more than $300, you must depreciate the asset using the decline in value rules.

    You can claim a deduction for depreciating assets you purchase and use for work. The deduction you can claim is worked out on the effective life of the equipment and the decline in value of equipment over the time it is used for work. If you also use the equipment for private purposes, you can't claim a deduction for that part of the decline in value.

    You can't claim a deduction if the equipment is supplied by your employer or any other person.

    See also:

    Low-value pool

    You also have the option to pool equipment costing less than $1,000 and equipment written down to less than $1,000 under the diminishing value method. You work out a deduction for the decline in value of equipment in this low-value pool by a single calculation using set rates.

    See also:

    Home office expenses

    The Home office expenses calculator helps calculate the amount you can claim as a deduction for home office expenses.

    Private study

    You can claim a deduction for the additional running expenses of an office or a study at home that you use for income-producing activities. Running expenses include:

    • decline in value of home office equipment
    • the costs of repairs to your home office furniture and fittings
    • heating and cooling
    • lighting
    • cleaning expenses.

    You can't claim occupancy expenses, for example, rent, rates, mortgage interest and house insurance premiums, unless you are carrying on a business. If your only income is paid to you as an employee, you are not considered to be carrying on a business.

    Diary records noting the time the home office was used for work are acceptable evidence of a connection between the use of a home office and your work. You will need to keep diary records during a representative four-week period.

    Place of business

    You can claim a deduction for part of the running and occupancy expenses of your home if you use an area of your home as a place of business.

    If you own your home and use an area as a place of business, you can also claim a deduction for part of your rates, mortgage interest and other expenses.

    The following factors can help you decide whether the area of your home you use has the character of a 'place of business'. The area needs to be:

    • clearly identifiable as a place of business
    • not readily suitable or adaptable for use for private or domestic purposes in association with the home generally
    • used exclusively or almost exclusively for carrying on a business
    • used regularly for visits of clients or customers.

    If you rent your home, you can also claim a portion of your rent as a business expense. You can also claim a portion of your electricity and water.

    There may also be capital gains tax implications if you sell your home and it has been used as a place of business.

    See also:

    Separate premises

    If you maintain separate premises you use solely for work, you can claim a deduction for all the expenses you incur in maintaining those premises. You can also claim a deduction for casual rental of work premises, such as 'room only' or hourly rental costs.

    See also:

    Phone expenses

    If you operate your business from home and you maintain only one telephone (mobile or landline), you can claim part of your telephone rental and the cost of your business phone calls.

    If you use your phone:

    • solely for business (this would usually be a second phone) you can claim a deduction for its cost
    • for both business and private calls, you can claim a deduction for business calls and part of the rental costs.

    Use the following formula to work out the percentage of phone rental expenses you can claim.

    Number of business calls you made and received multiplied by 100. Then divide this amount by the number of total calls made and received.

    You can identify business calls from an itemised phone account. If you do not have an itemised account, you can keep a record for a representative four-week period to work out a pattern of business calls for the entire year (provided you have a regular pattern of use during the year).

    You can't claim:

    • installation or connection costs
    • expenses incurred for the early cancellation of a mobile phone contract
    • the cost of an unlisted telephone number.

    See also:

    Other expenses

    • Advertising – you can claim a deduction for the total cost of advertising your business in the adult industry.
    • Consumables – you can claim a deduction for consumable items you use solely for earning income, including condoms, lubricants, gels, oils and tissues.
    • Cosmetics and hair care – you can claim a deduction for stage make-up and products you use for removing stage make-up. Some brands of make-up sold in department stores are considered stage make-up, and some stage make-up stores sell make-up that is not grease-paint based. In both of these cases, you can claim the costs of this make-up. You can't claim a deduction for the cost of general hairdressing and make-up or beauty treatments.
    • Dance lessons – you can claim a tax deduction for the cost of classes you take to maintain your existing dance skills, or to learn new dance skills.

    Other expenses you can't claim

    • Fitness – you can't claim a tax deduction for the cost of maintaining your general fitness and body shape.
      Last modified: 22 Jun 2018QC 18626