Tax Deductions for Security Guards

TAX TIP– The ATO considers the following expenses are NOT deductible:

• Conventional clothing – “Plain Clothes” security guards cannot claim the costs of conventional clothing used in their work.
• Club membership – A deduction is not allowable for club membership fees.

Allowable Deductions Specific to Security Guards

• Ammunition – Security Guards may be issued with ammunition in the normal course of duty. They may also attend official testing courses or train during their own time to improve firearm proficiency. Still, only sufficient practice rounds are issued to enable them to maintain their validation for operational purposes. The cost of additional ammunition purchased by Security Guards for work-related training purposes is an allowable deduction.

• Bulletproof jacket/vest or body armor –  A deduction is allowable for the cost of lightweight bulletproof jackets/vests or soft body armors bought for work, as they are considered to be protective equipment.

• Conventional clothing (undercover Security Guards) – A deduction may be allowable for the cost of additional clothing bought by Security Guards who are required to perform undercover work. For a deduction to be allowable, the Security Guard will have to establish a sufficient nexus between his or her income-earning activities and the expenses incurred (Taxation Ruling TR 94/22).

• First aid course – A deduction is allowable if it is necessary for a Security Guard as a designated first aid person to undertake first aid training. If the employer’s cost is met by the employer or is reimbursed to the Security Guard, no deduction is allowable.

• Fitness Expenses – Although generally not allowable, fitness expenses will be allowable where a Security Guard’s income-earning activities involve strenuous physical activities regularly. For example, members of special emergency squads, a diving squad, and Security Guards who regularly work with Security guard dogs and train them may be able to demonstrate that their income-producing activities demand a high level of physical fitness.

• Guns and related equipment –  These items are normally supplied and replaced by the employer. A deduction is allowable for the cost of additional and/or more sophisticated equipment used for income-earning purposes.

• Licenses and certificates – A deduction is allowable for the cost of renewing licenses and certificates held by a Security Guard in respect of his or her employment. A deduction is not allowable for the cost of obtaining the initial license or certificate.

• Security Guard dogs –  A deduction is allowable for expenses incurred in maintaining and training Security Guard dogs.

When Can Security Guards Claim Car Expenses?

Our experience with Security Guards is they often, if not always, use their private car for work. In many cases, those work-related car expenses are an allowable deduction.

Transport or car expenses include public transport fares and the running costs associated with motor vehicles, motorcycles, bicycles, etc., for work-related travel. Following is a brief checklist of car expenses specifically for Security Guards – see 4 ways of Claiming Car Expenses for the different methods of claiming car expenses.

• Travel between home and work – A deduction is generally not allowable for the cost of travel between home and the normal workplace as it is generally considered to be a private expense. This principle is not altered by the performance of incidental tasks en route.

• Travel between home and work – transporting bulky equipment – A deduction is allowable if the transport expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. A deduction is not allowable if the equipment is transported to and from work by the Security Guards as a matter of convenience. A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace – see this post for more details Travel Between Home and Work with Bulky Tools and Equipment.

• Travel from the site security gate to the parking area –  A tax deduction is NOT allowable for this travel as the ATO considers it part of your normal travel from home to work. An exception to this will apply if you transport bulky tools and or equipment as discussed above.

• Travel between home and work where home is a base of operations and work is commenced at home. A deduction is allowable for transport expenses if they can be attributed to traveling on work, as distinct from traveling to work, i.e., where the Security Guards home is used as a base of operations. His or her work has commenced before leaving home.

• Travel between home and shifting places of work. A deduction is allowable for the transport expenses incurred in traveling between home and shifting places of work, where the Security Guards are required by the nature of the job itself to do the job in more than one place. The mere fact that a Security Guards may choose to do part of the job in a place separate from that where the job is located is not enough.

• Travel between two separate workplaces if there are two separate employers involved – A deduction is allowable for the cost of traveling directly between two places of employment.

• Travel from the normal workplace to an alternate workplace while still on duty and back to the normal workplace or directly home. A deduction is allowable for the cost of travel from the normal workplace to other workplaces. A deduction is also allowable for the cost of travel from the alternate workplace back to the normal workplace or directly home. This travel is undertaken in the course of gaining assessable income and is an allowable deduction.

• Travel from home to an alternate workplace for work-related purposes and then to the normal workplace or directly home. A deduction is allowable for the cost of travel from home to an alternate workplace and then on to the normal workplace or directly home.

• Travel between two places of employment or between a place of employment and a place of business – A deduction is allowable for the cost of travel directly between two places of employment or a place of employment and a place of business, provided that the travel is undertaken to carry out income-earning activities.

• Travel in connection with self-education – See Self-education.

What Car Expenses Can Security Guards Claim?

• The cost of using your own car for work, including travel to attend meetings, attend training courses, pick up supplies, and driving between or around job sites (to claim for care costs, it is usually best to keep a diary record of the number of kilometers you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year)  – see Claiming Work-Related Car Expenses.

• The cost of parking, tolls, taxis, and public transport if you are required to travel to attend seminars, meetings, and training courses not held at your usual place of work (if you need to stay away overnight, you can also claim for the cost of all meals and your accommodation)

• The cost of bridge and road tolls paid while driving between your depot and your client’s depot (but NOT while driving to and from work)

• You can claim the cost of using your own car to travel to and from work, BUT only if you are required to carry bulky tools and equipment for your work AND there is no secure area to leave these items on-site overnight.
  

How Can Security Guards Claim Car Expenses

The following is a checklist of the 2 different methods of claiming motor vehicle or car expenses:

• Set rate per Km
• logbook method

Meals and Overnight Travel Away From Home

It is not common for Security Guards to travel away from home. If you do, the following is a summary with links on what can be claimed as a tax deduction:

• Overnight Travel Away From Home – the cost of buying overtime meals when you work overtime, provided your employer has paid you an allowance. Providing the deduction for overtime meals does not exceed the ATO’s reasonable allowance. Substantiation is not required – for the current rate, see Claiming Overtime Meal Allowance.

• Overtime Meal Allowances – the cost of buying overtime meals when you work overtime, provided you have been paid an allowance by your employer per meal without having to keep any receipts, provided you can show how you have calculated the amount you spent – the ATO determines a yearly “reasonable” amount you can claim without substantiation – see the following post for the rate applicable to the current financial year – Claiming Overtime Meal Allowance.

Work Clothing  

A deduction is allowable for the cost of buying, renting, or replacing clothing, uniforms, and footwear (‘clothing’) if:

• the clothing is protective in nature
• the clothing is occupation-specific and not conventional in nature

• the clothing is a compulsory uniform and satisfies the requirements of Taxation Ruling IT 2641 – for example, corporate wardrobe

• expenditure on shoes, socks, and stockings is considered of a private nature. Even when these items are worn at the employer’s request, their cost will only be deductible in limited circumstances. To qualify for the deduction, the items must first form an integral part of a distinctive and compulsory uniform, the employer’s components in its expressed uniform policy or guidelines. In addition, the employer’s uniform policy or guidelines should stipulate the characteristics of the shoes, socks, and stockings that qualify them as a distinctive part of the compulsory uniform, e.g., color, style, type, etc. The uniform wearing must also be strictly and consistently enforced, with breaches of the uniform policy giving rise to disciplinary action. In strict compulsory uniform regimes, expenditure on shoes, socks, and stockings is likely to be regarded as work-related rather than private in nature. The clothing is a non-compulsory uniform or wardrobe that has been entered on the Register of Approved Occupational Clothing of the TCFDA. Taxpayers can obtain details of registered corporate wardrobes either from your employer or from the Department of Industry directly on 03 9268 7944. NOTE, there is no longer a public register available on the web. See our post on Non-compulsory Corporate Uniform for additional information.

• A deduction is allowable for the cost of cleaning, laundry, and maintaining clothing that falls into one or more of the categories of deductible clothing above.

• The cost of buying other personal protection equipment (PPE) that is not supplied by your employer (including overalls, gloves, goggles, masks, steel-capped boots, high visibility vests, and winter outdoor jackets)

Training

• The cost of work-related short training courses (for example, first aid, OH&S, truck and heavy equipment driving, vehicle maintenance) that a University or TAFE does not run. You can claim for the cost of any course fees, books, stationery, Internet connection, telephone calls, tools or equipment, and traveling to and from the course. You can also claim any accommodation and meal expenses you have to pay if you are required to stay away overnight for your course – see Tax Deduction for Self Education.

• The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE directly relates to your current work. If you are studying, you can also claim the cost of books, stationery, equipment, and travel required for your course .

Work Tools and Equipment  

• The cost of buying and repairing equipment you use at work (including tools, CB radio, portable refrigerator, sleeping bag, electronic organizers, laptop computers, and mobile phones)
• The cost of any repairs to your employer’s vehicle, maintenance, spillage, or cleaning (provided your employer does not reimburse you for these costs)

• The cost of any materials or supplies that you buy for use at work (for example, safety gear, first aid equipment, backpack, or belt bag)

See this post for details on Tax deductions, Employer Reimbursements, and Allowances.

Other Work Expenses 

• The cost of annual memberships or union fees (for example, Transport Workers Union fees)

• The cost of renewing machinery or other licenses and tickets that are required for your work, but not including your normal driver’s license

• The cost of work-related books, magazines, and journals

• The cost of work-related mobile or home telephone calls and rental (you should keep a diary record of the number of phone calls you make for work for one month, and then we can use that to estimate your usage for the whole year)

• The cost of work-related internet connection fees (you can only claim the proportion of your monthly fees that relate to work use, which could include emailing, research relating to your job, and research for your training courses)

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 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 organize 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 traveling to see your tax agent (you can claim the cost of traveling to see your accountant have your tax return prepared. You should record the number of kilometers 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.