Edited version of your written advice

Authorisation Number: 1012693491733

Ruling

Subject: Gym membership

Question

Are you entitled to a deduction for the cost of gym membership?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You work in the construction industry.

The strenuous nature of your work exposes your body to the risk of muscular sprains and strains, tendon failure and body fatigue.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.

Generally fitness expenses such as the cost of a gym membership are considered to be private in nature and no deduction is allowed.

Whilst your employer's regulations may require an employee to remain in a physically fit condition, this does not mean expenditure related to keeping fit is allowable as an income tax deduction.

Taxation Rulings TR 95/13 Income tax: employee police officers - allowance, reimbursements and work-related deductions and TR 95/17 Income tax: employee work-related deductions of employees of the Australian Defence Force deal with the deductibility of gym membership fees for police officers and Australian Defence Force (ADF) members respectively.

TR 95/13 states that a deduction is not allowable for fitness expenses for police officers as it is considered to be of a private nature. The only exception is if a police officer's income earning activities involve strenuous physical activities on a regular basis. Police Academy physical training activities, members of special emergency squads, diving squads and police officers who work regularly with police dogs and train them, may be able to demonstrate that their income producing activities demand a high level of physical fitness.

TR 95/17 sets down a similar view for ADF members in that fitness expenses are not deductible. An example provided in the addendum of TR 95/17 refers to a member of the Special Air Services Regiment (SAS) who is paid to maintain a very high level of fitness being allowed to claim some fitness expenses. However, the level of fitness required of a SAS member and that of an ordinary infantryman is clearly differentiated.

Both taxation rulings adhere to the principle that unless a taxpayer's normal duties require a very high (above and beyond normal) fitness level, deductibility of expenses will be denied. Taxation Determination TD 93/114 Income tax: is a police officer, who is required to maintain an adequate level of physical fitness in order to undertake police duties, entitled to claim a deduction for fitness related expenditure? also supports this view.

A deduction is allowable for these costs if strenuous physical activity is an essential and regular element of the taxpayer's income-earning activities, such as a Police Academy physical training instructor or a member of the Special Air Services Regiment (SAS). Their costs would be incurred to maintain a level of fitness well above the general standard.

In your case, whilst your duties in the construction industry requires a certain level of fitness and strength we do not consider the level of fitness required is at a level comparable to that of a physical training instructor or an officer in special combat or emergency squads.

Accordingly, the cost of your gym membership is considered to be a private expense and not allowable.