• Deductions

    When completing your tax return, you are entitled to claim deductions for some expenses that are directly related to earning your income – for example, from your work as an employee (work-related expenses) or your investment or business income.

    Remember

    When you sign your tax return, you are declaring that everything you have told us is true and you can support your claims

    You are responsible for providing proof of your expenses, even if you use a registered tax agent.

    Evidence to support your claims

    If your total claims for deductions from your income as an employee add up to more than $300, you must keep written evidence, such as receipts. Your written evidence must show you have incurred the full amount of your claim, not just the amount over the first $300.

    If the total amount you are claiming is $300 or less, you do not need to keep receipts but you must be able to show how you worked out your claims.

    Note: Generally, you need to keep your written evidence for five years from the due date for lodging your tax return – if you lodge your tax return after the due date, the five years start from this later date.

    Work-related expenses

    You can claim tax deductions for work-related expenses if all of the following apply:

    • you incurred the expense in doing your job
    • the expense is not private (personal) or capital in nature
    • you can show you incurred the expense by producing receipts or other written evidence.

    Expenses that are capital in nature include those that provide a lasting benefit, such as the cost of weight-training equipment. If you incurred an expense that was capital in nature, you may be able to claim a deduction for the decline in value (depreciation) of the item that you purchased.

    Note: If you are claiming a deduction for an expense you incurred for something you used partly for work and partly for private purposes (such as mobile phone costs or travel) you can only claim that portion of the expense that relates to your work use.

    Training and research material

    You may be able to claim the costs of training and research material if this is an essential part of your official training plan. Only claim the portion of the expense that relates to your work use. Seek advice about your personal circumstances.

    Professional association fees

    You can claim a deduction for membership fees for your relevant players' association.

    Player manager fees

    Existing playing contracts

    All of the following costs are allowable deductions under existing playing contracts:

    • settling disputes, including the cost of representation
    • changing or renegotiating the conditions of a contract, if the existing agreement allows for this
    • renewing or extending a fixed-term agreement, if the existing agreement allows for this.

    New playing contracts

    Depending on the nature of the playing contract and competition rules, fees paid to a manager to negotiate a new playing contract may be an allowable deduction under certain circumstances.

    You should seek advice about your personal circumstances.

    Travel expenses

    Generally, the cost of normal trips between home and work is a private expense that you cannot claim – however, as a professional footballer, you may be able to claim deductions for travel to and from home for training, matches and other football activities where any of the following applies:

    • there is a practical necessity of travelling by car – such as when you need to transport bulky sporting gear
    • the car travel is required to enable you to comply with particular terms in your contract
    • your home is considered your base of operations.

    In these circumstances, you may be able to claim:

    • work-related car expenses
    • actual expenses – such as petrol, oil and repair costs, if you either
      • use a car that is owned or leased by someone else
      • use a motorcycle
       
    • public transport, including taxi fares
    • bridge and road tolls
    • parking fees, but not fines
    • short-term car hire.

    Note: If your equipment is transported to and from work for convenience, these transport costs are considered private and a deduction is not allowed.

    How to claim your car expenses

    If you are entitled to claim a deduction for your work-related car expenses, there are some changes to work-related car expense deductions from 1 July 2015. Below is a breakdown of the methods which applied from and before 1 July 2015.

    From 1 July 2015 – two methods

    The government has simplified the car expense deductions for 2015–16 and future income years. From 1 July 2015, the one-third of actual expenses method and 12% of original value method have been abolished.

    The two methods available from 1 July 2015 are:

    • cents per kilometre method
    • logbook method
    • Note: You can claim a deduction for the decline in value (depreciation) of your car up to the value of the car limit if you use the logbook method.

    Before 1 July 2015 – four methods

    There are four methods you may be able to use to work out the amount that you can claim.

    The four methods are the:

    • cents per kilometre method
    • logbook method
    • 12% of original value method
    • one-third of actual expenses method.

    Cents per kilometre method

    The cents per kilometre method is the method most commonly used. The most you can claim using this method is 5,000 work kilometres per car, even if you have travelled more – for example, if you travelled 5,085 work kilometres, you cannot claim for the extra 85 kilometres.

    When working out your deduction using the cents per kilometre method, you do not need receipts or other written evidence. However, you must be able to show how you worked out your estimate of work kilometres by, for example:

    • using a diary of work-related travel
    • basing your estimate on a regular pattern of travel.

    You must have the necessary evidence for the method you choose.

    See also:

    Overnight travel expenses

    You can claim a deduction for travel expenses if your club requires you to travel away from your usual residence for one or more nights – for example, to play an interstate or overseas game. These expenses may include:

    • meals, accommodation and incidental expenses
    • car, air, bus, train, tram, ferry and taxi fares
    • bridge and road tolls
    • car parking
    • car-hire fees
    • visa application fees, but not passports.

    Note; Generally, if your travel did not involve an overnight stay, you cannot claim for meals even if you received a travel allowance.

    Upgrade costs for accommodation and travel are tax deductible, where the club has paid the basic cost and you have opted for an upgrade at your own expense.

    You cannot claim costs if your expenses are paid for by your club or someone else, or if you are reimbursed.

    If you are claiming travel expenses and you receive a travel allowance, you must include the allowance as assessable income in your tax return.

    Travel insurance is considered to be a private expense because travel insurance invariably covers items that are generally private in nature and cannot be claimed as a deduction.

    See also:

    • TD 2015/14 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2015–16 income year?
    • TD 2016/13 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2016–17 income year?

    Luggage

    You may be able to claim a deduction for luggage if it is used for work-related purposes – for example, to transport gear used to play an interstate game.

    Generally, if the cost of the item is $300 or less, then you may claim the full cost of the item at the end of the income year.

    If the item costs more than $300, then refer to Tools, equipment and other assets for more information.

    You will have to apportion the expenses if you also use the items for private purposes.

    Next step:

    Work-related clothing

    You may be able to claim a deduction if you buy, repair, or clean your work-related clothing.

    Work-related clothing may include:

    • compulsory or corporate clothing, where there is a strictly enforced policy making it compulsory for you to wear that clothing – for example, a suit or jersey that identifies you as a player of a particular club or organisation
    • compulsory clothing includes
      • shirts with club emblems or embellishments
      • standard matching shorts or tracksuits
      • hats or caps with club emblems
      • jerseys and jumpers with club emblems
      • suits with club emblems.
       
    • protective clothing to protect you from the risk of illness or injury, caused by your work or work environment – these items may include headgear, mouthguards, sun-protection clothing and so-called sports skins.

    You cannot claim a deduction for the cost of purchasing, cleaning or repairing general exercise clothing which is considered to be part of 'conventional clothing' – this includes tracksuits, shorts, tank tops, running shoes, sweat socks, armbands, headbands, t-shirts and similar items.

    Note: To claim a deduction for the cost of uniforms, complete the work-related clothing, laundry and dry-cleaning expenses label on your tax return.

    See also:

    Information technology

    You can claim the work-related proportion of internet-access charges and the decline in value of your computer, laptop, notebook or similar device, where you use these in the course of carrying out your work-related activities.

    If something is used for personal and work-related purposes, keep a diary of your use for four weeks and use that to estimate the proportion that was work related.

    Example: diary records for use of computer

    Simon's internet-use diary showed 40% of his internet time was for work-related activities, and 60% was for private use. As his ISP charge for the year was $1,200, he can claim:

    $1,200 x 40% = $480 as work-related internet use.

    End of example

    Generally, if the cost of an asset is $300 or less, then you may claim the full cost of the item at the end of the income year. If the item costs more than $300, refer to Tools, equipment and other assets for more information.

    Next step:

    Phone expenses

    You can claim a deduction for the cost of work-related phone calls you make, including calls from mobile phones.

    Work-related phone calls may be identified from an itemised account. If an itemised account is not provided by the phone company, records (such as diary entries) covering a representative four-week period will be accepted as establishing a pattern of your phone use for the entire year.

    Note; You are not able to claim deductions for any private calls made.

    Sunglasses and sunscreens

    As the nature of your work requires you to be in the sun, you can claim a deduction for the cost of sunglasses, hats and sunscreen lotions that are used to protect yourself at work.

    You will have to apportion the expenses if you also use the items for private purposes.

    Note: You cannot claim a deduction for the cost of general grooming items, such as:

    • cosmetics
    • shaving products
    • deodorant
    • general hair products
    • general skincare products
    • hairdressing.

    Health and fitness

    Deductions for the cost of fitness are allowable because maintaining a very high level of fitness and physical activity is an essential element to you gaining income. Expenses that you may be able to claim include:

    • gym fees
    • gym and training equipment that cost $300 or less.

    Generally, if the cost of an asset is $300 or less, then you may claim the full cost of the item at the end of the income year. If the item costs more than $300, then refer to Tools, equipment and other assets for more information.

    The following expenses are not allowable health and fitness deductions:

    • The cost of a program that is specifically designed to manage weight.
    • The cost of normal food substitutes or the costs of foods for special dietary purposes.
    • The cost of vitamins, minerals, or sports supplements used pre- or post-game, such as protein shakes.

    Next step:

    Medical expenses

    Medical expenses cannot be claimed as deductions – however, you may be eligible to claim a tax offset, depending on your circumstances.

    See also:

    Legal expenses, fines and penalties

    Fines and penalties for on-field conduct and legal expenses, including those relating to a tribunal decision, are generally tax deductible to the player where they result from the performance as a player and as part of a football game.

    However, fines, penalties and legal expenses for off-field breaches of conduct are not tax deductible.

    A deduction is not allowable for fines or other amounts payable for an offence against an Australian or foreign law.

    Income protection insurance premiums

    A deduction is allowable for the cost of income protection, sickness and accident insurance premiums.

    Note: Payments made to you under an income protection, sickness or accident insurance policy will be assessable income where the premiums were deductible and the payments replace income.

    Self-education expenses

    To claim a deduction for self-education expenses, you must have met one of the following conditions when you incurred the expense:

    • the course maintained or improved a skill or specific knowledge required for your then current work activities
    • you could show that the course was leading to, or was likely to lead to, increased income from your then-current work activities.

    You cannot claim a deduction for self-education for a course that either:

    • relates only in a general way to your current employment or profession
    • will enable you to get new employment.

    See also:

    Other deductions

    Cost of managing your tax affairs

    You are able to claim a deduction for the cost of managing your tax affairs, including:

    • the preparation and lodgment of your tax return and activity statements
    • travel to obtain tax advice from a recognised tax adviser
    • appeals made to the Administrative Appeals Tribunal or courts about your tax affairs
    • lodging your tax return through a registered tax agent
    • obtaining tax advice from a recognised tax adviser
    • dealing with us about your tax affairs
    • purchasing software to allow the completion and lodgment of your tax return – however, you must apportion the cost of the software if you also used it for other purposes.

    Gifts and donations

    You can claim a deduction for:

    • voluntary gifts of $2 or more made to an approved organisation
    • a net contribution of more than $150 to an approved organisation for a fund-raising event
    • contributions of $2 or more to
      • a registered political party
      • an independent candidate in an election for parliament
      • an individual who was an independent member of parliament or, in limited circumstances, was previously an independent member.
       

    See also:

      Last modified: 06 Oct 2016QC 36159