Edited version of private advice

Authorisation Number: 1051579385031

Date of advice: 10 September 2019

Ruling

Subject: Self-education expenses and reimbursements

Question 1

Are you able to claim work-related self-education expenses that exceed the employer reimbursement?

Answer

Yes

Question 2

Are you required to report your reimbursement from your employer in the 2018/19 income year?

Answer

No

Question 3

Are you required to report your reimbursement from your employer in the 2019/20 income year?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2019

Year ending 30 June 2020

The scheme commences on:

1 July 2018

Relevant facts and circumstances

You are employed full-time as an engineer by Company A.

You have been employed by Company A since 2017 income year.

You have been employed in this role since 2018 income year.

Your role requires a four year engineering Degree qualification or higher.

You hold a Bachelor of Engineering.

You are studying a Master of Advanced Engineering degree through a university.

You are studying part-time.

You have applied the knowledge you have learnt in your study to your current role.

This degree increases your technical authority level. This does not change the nature of the work you do.

You intend to claim course fees, car expenses for travel (cents per km), and parking charges at university.

Course fees are approximately $X per unit.

Your employer supports your study by providing reimbursement and grants you study leave.

You receive reimbursement of $Y per unit from your employer.

You are reimbursed by the employer when you results are received, which is in the following financial year.

Your employer pays fringe benefits tax (FBT) on the reimbursement.

You received a one-off bursary payment of $Z per full-time year from the university towards your fees.

Your fees are deferred under FEE-HELP.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Self-education expenses

Yes. Your self-education expenses which exceed the reimbursement and bursary payments are deductible, as it is accepted the study meets the requirements detailed in Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business. Further information about self-education expenses can be found by searching 'QC 31970' on ato.gov.au

Reimbursement

Reimbursements are payments made to a worker for actual expenses already incurred, and the employer is generally subject to fringe benefits tax (FBT). Your employer pays FBT on the reimbursement, therefore the amount is not assessable income to you as the employee. You cannot claim a deduction for expenses covered by the reimbursement.