Factory workers – income and work-related deductions
If you earn your income as a factory worker, 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 factory workers':
Income – salary and allowance
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, you aren't always entitled to a deduction if you receive an allowance – it depends on the situation.
If you are entitled to a deduction, the amount of the deduction is not usually the same amount as the allowance you have received.
Allowance types, reasons and deductibility
Reason for allowance
|
Example of allowance type
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Deductible (Yes or No)
|
Compensation for an aspect of your work that is unpleasant, special or dangerous
|
Artificial fertilizers and chemicals allowance
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No
These allowances don't help you pay for deductible work-related expenses
|
Compensation for industry peculiarities
|
Cleaner, greaser or oiler allowance
|
No
These allowances don't help you pay for deductible work-related expenses
|
An amount for certain expenses
|
Motor vehicle allowance
|
Yes
If you incur deductible expenses
|
An amount for special skills
|
A first aid certificate
|
Yes
If you incur deductible expenses
|
Example: allowance assessable, no deduction
Mario is an employee factory worker. Mario's employer snap freezes fresh fruit and vegetables and packages them. Mario's role requires him to work in a particular section of the factory that must be kept at below 0 degrees Celsius.
Mario's employer pays him a cold places allowance of 66 cents per hour. The allowance is shown on his income statement at the end of the income year.
Mario must include the cold places allowance as income in his tax return.
The allowance compensates Mario for an aspect of his work that is special. It is not to help him pay for deductible work-related expenses.
Mario can't claim a deduction because he hasn't incurred any expenses.
End of example
Example: allowance assessable, deduction allowed
Doris is an employee factory worker. On 5 occasions during the income year, Doris is asked to work overtime. Under the terms of the industrial award, Doris's employer pays her an overtime meal allowance of $15.24 each time she works overtime.
On her overtime meal break Doris buys and eats a meal at the cafeteria onsite. Doris usually spends $20 on her meal.
At the end of the income year, Doris's employer shows the total overtime meal allowance paid to Doris on her income statement ($15.24 × 5 = $76.20).
Doris must include the total amount of the allowance ($76.20) as income in her tax return.
Doris can claim a deduction of $100 ($20 × 5) for overtime meals in her tax return.
End of exampleDifference between allowances and reimbursements
An allowance does not 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 shown 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, you:
- don't include the reimbursement as income in your tax return
- can't claim a deduction for them.
Example: reimbursement for protective eyewear
Beth is an employee at a factory manufacturing items that require certain chemicals. Beth needs to wear protective eyewear to protect her eyes from the risk of damage that may occur if the chemicals splash into her eyes. Beth has the option of wearing the protective eyewear her employer provides or she can buy protective eyewear that meets specific requirements and request a reimbursement.
The protective eyewear Beth's employer provided doesn't fit her face so she buys a pair that fit her better for $50. Beth's employer reimburses her $50 for the protective eyewear.
Beth doesn't need to include the reimbursement from her employer as income in her tax return.
Beth can't claim a deduction for the cost of protective eyewear.
End of exampleFind out about factory workers':