Tax for individuals: what can I claim as an employee?

As an employee, tax time can generate significant cash flow if you understand the system and know what to claim.

In this article, we provide an overview of the deductions to be mindful of, including some out-of-the-box and industry-specific items.

Allowable deductions for individuals

Employees can claim deductions for expenses which directly relate to earning income. The Australian Taxation Office (ATO) accepts deductions if:

• You spent the money yourself and were not reimbursed
• The expense was related to your job
• You have a record to prove you made the expense (exceptions apply). These may include receipts, bank statements and diary entries.

For expenses made for work and private purposes, you can only claim a deduction for the work-related portion.

Standard allowable deductions for individuals include:

• Vehicle and travel expenses (must be directly connected with your work, and do not generally include normal trips between home and work)
• Clothing, laundry and dry-cleaning expenses (must relate to buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms)
• Gifts and donations
• Home office expenses
• Self-education expenses
• Tools and other equipment.

RELATED: Tax For Small Business: What Can I Claim?

Additional and unusual claims for individuals

As a rule of thumb, if you need to spend money to earn income, and the expense is not of a private nature, you can usually claim the expense.

For example, truck drivers can claim the cost of a portable fridge and athletes can claim fees to negotiate new contracts.

Industry-specific tax deductions

There are many industry-specific deductions that you should also consider.

For example, hairdressers can claim a deduction for hair-cutting and hair-styling tools, but not for general hair care products or cosmetics as they are deemed private expenses.

Lawyers can claim a deduction for Supreme Court library fees, while journalists can claim the work-related portion of their pay TV access.

Find a trusted accountant to do your individual tax return

Paying a professional to help with your tax return is a clever investment – and, best of all, it’s tax deductible!

LDB’s team of accountants can provide expert guidance about what you can and cannot claim as part of your tax return.

To find out more, phone LDB on (03) 9875 2900 or complete the contact form below to find out how we can assist you with your tax return.