Are you a teacher? Both of Andrew's parents, both of Heidi's grandmothers and 3 of her aunts are or were teachers. It's a hard job, and we know you often work long hours both before and after you do your "day shift" of teaching at school. Marking student's work, preparing lessons, researching facts and figures that might interest students, keeping your professional development up to date, being involved in extra-curricular activities for school - whew! Thank you so much for being a teacher - your work is important, and we need more of you!
What can and can't you claim on your tax return? Are teaching aids tax deductible? What about if you mark student's work and prepare lessons in your office at home - can you claim that? Do you make work-related calls from your private mobile, for example, to talk to parents about how their child is going at school?
The Australian Taxation Office (ATO) has special rulings in relation to what teachers can and can't claim. Read on below for our summary of what the ATO says (please note, this is general information only, and everyone's situation is different. If you'd like to get professional tax advice, we recommend you come in and talk to us, or see another registered Tax Agent to discuss your particular situation).
TRAVEL EXPENSES
Work-related daily travel expenses you can claim
Generally, the cost of normal trips between your home and work is a private expense you cannot claim an income tax deduction for. However, as an employee teacher, there are certain situations where you may be able to claim deductions for travel between your home and workplace.
Transporting students or bulky equipment
You can claim the cost of using your car to travel between your home and work if you had to transport either of the following:
- students – for example, to a sporting venue
- bulky equipment you needed to use at work and for which there was no secure storage area at your workplace.
Example 1: Using your car to transport students
On Saturday afternoon, the school rugby union team plays a competition match at the sporting field on the school's grounds. As part of his coaching duties, Jeremy collects several students and transports them from their homes to the sporting field. After the match, he then returns the players and continues his journey home.
Jeremy can claim a deduction for the expenses he incurs to transport the students.
Example 2: Using your car to transport bulky equipment
Ric is employed as a drama teacher. He transports heavy props and costumes from his home to his regular place of work the day before a school theatre production. In these circumstances, Ric can claim a deduction for his travelling costs on that day.
Travelling between separate workplaces
Work-related car and travel expenses also include the cost of travel directly between two separate workplaces – for example, when you have a second job.
Example 3: Travelling between two jobs
April travels directly from the school where she is employed as a teacher, to the TAFE college where she gives night lectures. Because she travels directly from one workplace to the other, she can claim a deduction for the travel expenses she incurs to do so.
Travel to an alternative workplace
Work-related car and travel expenses also include the cost of travel:
- from your normal workplace to an alternative workplace while you are still on duty, and back to your normal workplace or directly home – see example 4
- from your home to an alternative workplace, and then to your normal workplace or directly home – see example 5 following.
Example 4: Travelling from work to an alternative workplace then home
Wayne, an employee teacher, travels from his normal school to a regional administrative centre for a meeting. After the meeting, he travels directly home. Wayne can claim a deduction for the expenses he incurs to travel between these workplaces and then home.
Example 5: Travelling from home to an alternative workplace then to work
Zareb, an employee teacher, travels from home to a marking centre to mark exams. He then travels to his normal school. Zareb can claim a deduction for the expenses he incurs to travel from home to the marking centre and then to his normal school. However, he cannot claim a deduction for the expenses he incurs to travel directly from his normal place of employment to his home.
Other travel expenses you can claim
You can claim the work-related cost of using vehicles other than cars as well as parking fees and tolls. You also claim work-related costs associated with taxis or short-term car hire .
Work-related daily travel expenses you cannot claim
Generally, the cost of normal trips between your home and work is a private expense you cannot claim a deduction for, even if:
- you do minor tasks on the way to work or home, such as picking up the mail
- you have to travel between your home and work more than once a day – for example, you drive home at the end of the school day and then return to work to attend a school speech night in the evening – see example 6
- you are on call – for example, you are on stand-by relief teaching and your employer contacts you at home to come into work – see example 7 following
- you work outside normal business hours – for example, you are
- conducting parent-teacher interviews after work hours
- at school during the school holidays preparing for the next term – see example 9.
Example 6: Travel between home and work more than once a day
Amanda finishes work at Black Stump Primary School and returns home by car at the end of the school day. At 6.00pm, she returns to school to hold parent-teacher meetings until 9.00pm. Amanda's after-hours travel between her home and the school is a private expense she cannot claim a deduction for.
Example 7: On call or relief teaching
Michael is a stand-by relief teacher who works at various schools. He is usually contacted at short notice and advised which school he must work at. The schools are located at varying distances from his home. Each day, Michael travels to a single school and returns home each night.
Even though Michael travels from home to the particular school in response to a phone call, his travel is still a private expense which he cannot claim a deduction for.
Example 8: Working outside normal business hours
Kyoko goes to work the week before the school term starts to prepare for her year 12 geography class. Although Kyoko has travelled to work during her holidays, the travel expense she incurs is a private expense she cannot claim a deduction for.
Motor vehicle provided by your employer or any other person
You cannot claim a deduction for car expenses if your employer or any other person provides a car for you and you do not pay for any of the running costs.
You cannot claim a deduction for any expenses you incur for the direct operation of a car that your employer provides and that you or your relatives use privately at any time, even if the expenses are work related – such expenses form part of the valuation of the car for fringe benefits tax purposes.
You cannot claim a deduction for the cost of travelling to another workplace for a social function.
You cannot claim a deduction for any fines you receive, such as speeding or parking infringements.
How to claim your work-related daily travel expenses
How you work out your claims and what records you need to keep will depend on whether the motor vehicle you use is considered to be a car and whether you own or lease it.
Claiming car expenses
If the motor vehicle you drive is a car, and you are entitled to claim a deduction for your work-related car expenses, there are two methods you can choose from to work out the amount you can claim.
The two methods are:
- cents per kilometre
- logbook.
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.
Cents per kilometre method
You can use this method to claim up to a maximum of 5,000 work kilometres, even if you have travelled more than 5,000 work kilometres. For example, if you have 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, but we may ask you how you worked out your estimate of work kilometres. For example, by:
- using a diary of work-related travel
- basing your costs on a regular pattern of travel.
Example 9
Rachel travels five kilometres each day while carrying out work-related activities. She worked Monday to Friday for 48 weeks during the income year. It would be reasonable for Rachel to calculate her work kilometres in the following way:
5 km x 5 days x 48 weeks
= 1,200 work kilometres for the income year.
Example 10
Henry works as a substitute teacher. From his diary notes of appointments during the income year, he calculates that he has travelled 4,825 kilometres for work-related activities. Although he does not have an established pattern of travel, his diary notes form a reasonable basis for his calculation.
HOME OFFICE EXPENSES
What you can claim
Running expenses
If you perform some of your work from your home office, you may be able to claim a deduction for the costs you incur in running your home office, even if the room is not set aside solely for work-related purposes.
You may be able to claim:
- the decline in value (depreciation) of home office equipment such as computers and telecommunications equipment – if your equipment costs less than $300, you can claim a full deduction for the work-related portion
- work-related phone calls, including from mobiles for calls to students regularly while you are away from your workplace – for example, you call parents of your students to discuss behavioural issues
- work-related internet access charges
- the cost of heating, cooling and lighting your home office that is over the amount you would ordinarily have to pay if you did not work from home
- the costs of repairs to your home office furniture and fittings.
Example 11: Computer used for private and personal use
Rita uses her computer and personal internet account at home to access her work emails to grade her year 12 students' English assignments. Rita uses her computer and the internet 40% for work purposes, and 60% for private purposes.
This means Rita can claim 40% of the depreciation of her computer, and 40% of her internet costs.
A depreciating asset, such as a computer, is an asset that has a limited effective life and can reasonably be expected to decline in value over the time you use it.
If you purchase an item that cost more than $300, you can only claim a deduction for its decline in value.
What you cannot claim
Occupancy expenses
Occupancy expenses include rent or mortgage interest, council rates and house insurance premiums. You can only claim occupancy expenses where your home office is considered to be a place of business. If your only income is paid to you as an employee, you are generally not able to claim a deduction for your occupancy expenses.
Keeping records of your home office running expenses
The records you must keep may include:
- receipts or other written evidence of your expenses, including receipts for depreciating assets you have purchased – for example, your computer
- diary entries you make to record your small expenses ($10 or less) totalling no more than $200, or expenses you cannot obtain any kind of evidence for, regardless of the amount – for example, stationery
- itemised phone accounts you can identify work-related calls on – see example 15. If you don't receive itemised accounts, you can make a reasonable estimate of your call costs based on diary records you have kept over a four-week period, together with your relevant telephone accounts.
- a diary you have created to work out how much you used your equipment, home office and phone for work-related purposes over a representative four-week period.
Working out your claim
To claim a deduction for the electricity and gas you use and the decline in value of your office furniture, you can claim either of the following:
- a deduction for your actual expenses
- a deduction you work out at a rate of 45 cents per hour.
To use the 45 cents per hour method of claiming, keep a diary to record the amount of time you use your home office for work purposes. The diary must show a representative period of at least four weeks to establish a pattern of use for the whole year.
If you receive a laptop at no cost through a government initiative, you cannot claim a deduction for the cost of the laptop because you have not incurred the expense.
Example 12: Cents per hour method
Rita uses a diary to record the time she uses her home office for work purposes. Based on her diary entries, Rita works out she spends an average of three hours each week night working in her home office. She works for 38 weeks each year.
Rita chooses to use the fixed rate of 45 cents per hour to work out the amount she can claim for her home office expenses.
She calculates her home office running expense deduction as follows:
38 weeks x 15 hours x 0.45 cents = $256.50
Rita works out the depreciation of her computer separately.
Example 13: Calculating depreciation of a computer
Rita purchased her computer on 5 September for $3,000 and has worked out that she uses it 40% for work purposes. She looks up the effective life of depreciating assets on our website, which says the effective life of a computer is four years. Rita uses the prime cost method to work out the decline in value of her computer:
Asset cost = $3,000
Days held = 300 (5 Sep to 30 Jun)
Effective life = 4 years
Work-use percentage = 40%
In the first year, Rita calculates the depreciation of her computer as:
$3,000 x (300 days/366 days) x (100%/4 years) x 40%
= $246
Example 14: Calculating phone expenses
Rita uses her mobile phone for work purposes. She is on a set mobile phone plan of $49 a month and rarely exceeds the plan cap.
Rita receives an itemised account from her phone provider each month by email, which includes details of the individual calls she has made.
At least once a year, and sometimes two or three times, Rita prints out her account and highlights the work-related calls she has made. She makes notes on her account for the first month about who she is calling for work – her employer, parents, and so on.
She works out that 15% of the individual call expenses are for work, and applies that to her cap amount of $49 a month. The other two months Rita reviews are consistent with this.
Since Rita was only at work for 38 weeks of the year, she calculates her work-related mobile phone expense deduction as follows:
8.8 months x $49 x 0.15 = $65
Place of business
You can claim a deduction for part of the running and occupancy expenses of your home if you use an area of your home as a place of business.
There may also be capital gains tax implications if you sell your home and it has been used as a place of business.
CLOTHING EXPENSES
You may be able to claim a deduction if you have any uniform, occupation-specific clothing, protective clothing, laundry or dry-cleaning expenses that relate to your work as an employee.
You can claim a deduction for the cost of buying, hiring, repairing and cleaning certain work-related uniforms or protective clothing.
You cannot claim a deduction for the cost of purchasing or cleaning a plain uniform or conventional clothing worn at work, even if your employer tells you to wear them, because it is a private expense. This includes expenditure on:
- sports clothes – for example, tracksuits, T-shirts, aerobics clothing, swimming costumes, shorts, socks and running or aerobic shoes – even if you are a physical education teacher
- clothing that you have to wear for medical reasons – for example, support stockings
- conventional clothing that is damaged at work
- everyday footwear – for example, dress, casual or running shoes.
You cannot automatically claim a deduction just because you received a clothing, uniform, laundry or dry-cleaning allowance from your employer.
You cannot claim costs met by the school, or costs that are reimbursed.
Compulsory uniforms
A compulsory uniform is a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
You may be able to claim a deduction for shoes, socks and stockings if they are an essential part of a distinctive compulsory uniform and the characteristics of which (colour, style, type) are specified in your employer’s uniform policy. Wearing of the uniform must be consistently enforced. If your employer requires you to wear a distinctive uniform but does not consistently enforce the wearing of the uniform, the design of the uniform must be registered before you can claim a deduction.
Single items of compulsory clothing
You may be able to claim for a single item of distinctive clothing, such as a jumper or tie, if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.
Non-compulsory uniforms or corporate wardrobe
If your employer requires or encourages you to wear a distinctive uniform or corporate wardrobe but does not consistently enforce the wearing of it, you can claim a deduction for the cost of the clothing only if the design of the clothing is registered. If you wear a non-compulsory uniform or corporate wardrobe, you cannot claim for stockings, socks or shoes, because these items cannot be registered as part of a non-compulsory uniform. Your employer can tell you if your non-compulsory uniform or corporate wardrobe is registered.
Protective clothing
You can claim a deduction for the cost of buying, hiring, replacing or maintaining protective clothing. Protective clothing is clothing that you wear to protect yourself from the risk of illness or injury posed by your income-earning activities or the environment in which you are required to carry them out. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.
Laundry and dry-cleaning
You can claim a deduction for the cost of laundering and dry-cleaning work clothes that are eligible according to the relevant category described on this page (compulsory uniforms, single items of compulsory clothing, non-compulsory uniforms or corporate wardrobe, and protective clothing). For example, you can claim a deduction for cleaning a uniform that your employer provides and that you must wear at work.
You can claim laundry expenses for washing, drying or ironing such work clothes, including laundromat expenses. If your claim for laundry expenses is $150 or less, you do not need written evidence – you may use a reasonable basis to work out your claim.
If you claim a deduction for laundry expenses that is more than $150, and your total claim for work-related expenses (other than car, meal allowance, award transport allowance and travel allowance expenses) exceeds $300, you need written evidence for the total claim. You can claim the cost of dry-cleaning work clothes if you have kept written evidence to substantiate your claim. You do not need written evidence if your total claim for work-related expenses is $300 or less.
SELF-EDUCATION EXPENSES
You may be able to claim a deduction if you have any self-education expenses relating to your work as an employee.
Self-education expenses are expenses related to a prescribed course of education provided by a school, college, university or other place of education. The course must be undertaken to gain a formal qualification for use in carrying on a profession, business or trade or in the course of employment. You can claim a deduction for the cost of self-education if there is a direct connection between your self-education and your work activities at the time the expense was incurred.
Self-education expenses are not deductible if your study is designed to get you:
- a job
- a new job
- income from a new income-earning activity.
For example, if you have a Diploma of Education and you are studying for a Bachelor of Education degree, you can claim a deduction for the education expenses you incur. The degree is likely to lead to an increase in your income from teaching.
Self-education expenses can include textbooks, stationery, student union fees, course fees, certain travel expenses and the decline in value of equipment, to the extent they are used for self-education purposes .
You cannot claim costs met by your employer or costs that are reimbursed.
In certain circumstances you may have to reduce your deduction for self-education expenses by $250. However, you may have other types of expenses (some of which are not deductible) that can be offset against the $250 before you have to reduce the amount you can claim.
OTHER EXPENSES
Capital allowances
You can claim a deduction, called a capital allowance, for the decline in value of equipment used for work. If the equipment is also used for private purposes, you cannot claim a deduction for that part of the decline in value.
You cannot claim a deduction if the equipment is supplied by your employer or any other person.
Equipment for which you may be able to claim a capital allowance includes:
- calculators and electronic organisers
- computers and computer software
- answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment
- a professional library
- dedicated stopwatches (but not ordinary wristwatches).
Generally, the amount of your deduction depends on the effective life of the equipment.
Equipment costing $300 or less
If you purchased equipment costing $300 or less and you use it mainly for work, you can claim an immediate deduction for the work-related portion of the cost.
You cannot claim an immediate deduction if:
- the equipment is part of a set that you buy in the same income year and the total cost of the set is more than $300 (the set rule), or
- the equipment is one of a number of identical or substantially identical items you buy in an income year and the total cost of the items is more than $300 (the multiples rule).
Low-value pool
There is also an option to pool equipment costing less than $1,000 and equipment written down to less than $1,000 under the diminishing value method. A deduction for the decline in value of equipment in such a low-value pool is worked out by a single calculation using set rates.
Child care
You cannot claim a deduction for child care expenses. These are private expenses, even if you need to pay for child care to go to work.
Drivers licence
You cannot claim a deduction for the cost of getting or renewing your drivers licence because it is a private expense.
Excursions, school trips and camps
You can claim a deduction for the costs you incur when you take students on excursions, educational and sporting trips and camps if these trips have an educational benefit and are related to the curriculum or extracurricular activities of the school. For example, a science teacher accompanying a group of biology students on a camp to a national park to study the ecology of the rainforest can claim a deduction for entrance fees and travel costs.
Fares
You can claim a deduction for the cost of using public transport for work travel – for example, from your school to a conference venue.
Fines
You cannot claim a deduction for fines imposed under a law of the Commonwealth, a state, a territory, a foreign country or by a court – for example, a fine you received if you were caught speeding when driving between jobs.
First aid courses
You can claim a deduction for the cost of first aid training courses if you, as a designated first aid person, are required to undertake first aid training to assist in emergency work situations.
Fitness expenses
You cannot claim a deduction for the cost of fitness expenses – these are private expenses, even for a physical education teacher.
Glasses and contact lenses
You cannot claim a deduction for the cost of buying prescription glasses or contact lenses because it is a private expense relating to a personal medical condition. You may claim the cost of protective sunglasses if you are required to work outdoors and, as a result, are exposed to risk of eye damage from sunlight.
Grooming including hairdressing, cosmetics, hair and skin care products
You cannot claim a deduction for these items because they are private expenses.
Hiring equipment
You can claim the costs of hiring equipment used for work. However, if the equipment is also used for private purposes, you cannot claim a deduction for that part of the hire cost.
Interest costs
You can claim the cost of interest on money borrowed to purchase work-related equipment. However, if the equipment was also used for private purposes, you cannot claim a deduction for that part of the interest.
Meals
You cannot claim a deduction for the cost of meals eaten during a normal working day because it is a private expense, even if you receive an allowance to cover the meal expense.
You may be able to claim a deduction for overtime meal expenses you incurred if you received an overtime meal allowance from your employer which was paid under an industrial law, award or agreement.
You can only claim for overtime meal expenses incurred on those occasions when you worked overtime and you received an overtime meal allowance for that overtime.
If you have received an award overtime meal allowance not shown on a payment summary, you may choose not to include the allowance as income on your tax return and not claim a deduction, as long as the allowance does not exceed the Commissioner’s (of Taxation) reasonable allowance amounts and you have fully expended it.
An amount for overtime meals that has been folded in as part of your normal salary and wage income is not considered to be an overtime meal allowance.
Newspapers
You cannot claim a deduction for the cost of newspapers because it is a private expense.
Removal and relocation
You cannot claim a deduction for the cost involved in taking up a transfer in an existing employment or taking up new employment with a different employer.
Seminars, conferences and training courses
You can claim a deduction for the cost of attending seminars, conferences and training courses that are sufficiently connected to your work activities.
Social functions
You cannot claim a deduction for the cost of attending staff dinners or other social functions.
Student expenses
You cannot claim a deduction for the cost of:
- items you supplied to students for their own individual needs
- gifts you purchased for students
- meeting students’ personal expenses – for example, paying for lunch.
These costs are considered to be private expenses.
Sunglasses, sunhats and sunscreens
You can claim a deduction for the cost of sunglasses, sunhats and sunscreen lotions if the nature of your work requires you to work in the sun for all or part of the day and you use these items to protect yourself from the sun while at work – for example, if you are a school sporting coach for track and field events, in addition to your teaching duties.
Teaching aids
You can claim a deduction for the cost of teaching aids used for work.
Technical or professional publications
You can claim a deduction for the cost of journals, periodicals and magazines that have a content specifically related to your employment as a teacher.
Telephone calls, telephone rental and connection costs
You can claim a deduction for the cost of work-related telephone calls.
You can claim a deduction for your telephone rental if you can show that you are on call or are regularly required to telephone your employer while you are away from your workplace. If you also use your telephone for private purposes, you must apportion the cost of telephone rental between work-related and private use.
You cannot claim a deduction for the cost of connecting a telephone, mobile phone, pager or any other telecommunications equipment because it is a capital expense.
You cannot claim a deduction for the cost of an unlisted telephone number (silent number) because it is a private expense.
Repairs
You can claim a deduction for the cost of repairing tools and equipment for work. However, if the tools or equipment were also used for private purposes, you cannot claim a deduction for that part of the repair cost.
Union and professional association fees
You can claim a deduction for these fees. If the amount you paid is shown on your payment summary, you can use it to prove your claim. You can claim a deduction for a levy paid in certain circumstances – for example, to protect the interests of members and their jobs.
You cannot claim a deduction for:
- joining fees
- levies or other amounts you paid to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off.
Watches, including dedicated stopwatches
For information about claiming deductions for the decline in value of dedicated stopwatches used for work, see “capital allowances” above.
You can claim the costs of repairing a dedicated stopwatch, but not an ordinary wristwatch, even if it is waterproof.
GENERAL EXPENSES
There are some tax deductions that all employees can claim on their personal tax returns:
- The amount of any donations to registered charities (as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items)
- The cost of bank fees charged on any investment accounts
- The cost of income protection or sickness and accident insurance premiums (this type of insurance covers you if you hurt yourself (including when you are not at work) or become sick and you are unable to work. It will pay you your normal wage until you are fit to return to work – if you don’t have this insurance you should see a financial adviser or ask us and we will refer you to someone who can organise it for you. It is definitely worthwhile)
- Your tax agent fees (the amount you pay to your accountant to prepare your tax return each year)
- The cost of travelling to see your tax agent (you can claim the cost of travelling to see your accountant to have your tax return prepared. You should keep a record of the number of kilometres you travel and any other incidental costs such as parking, meals, accommodation etc)
We suggest that you keep receipts for all purchases that are work related, even if they are not listed above. That way, when we prepare your tax return, we can decide whether you are allowed to claim a tax deduction for them or not.
