Tax Deductions For Teachers

If you work as a teacher, here is a checklist of tax deductions you may claim on your personal tax return.

Teaching Aids

A deduction is allowable for the cost of teaching aids to the extent they are used for work-related purposes.

See this post for details of claiming a tax deduction for Teaching Aids.

Car Expenses from Home to Work

The cost of travel between home and your place of employment is usually considered private and not deductible.

However, there are several cases and circumstances where travel between home and employment is an allowable deduction:

Travel between home and work – A deduction is 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 cleaner 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.

Transport of Students – A deduction is allowable for the cost of travel attributable to the transport of students in the course of producing assessable income. This is so, even if the travel begins at the employee teacher’s home and ends at his or her regular place of employment. The cost of the total distance traveled (beginning at home and ending at school) is allowable.

To the second job – A deduction is allowable for the cost of traveling directly between two workplaces – from one employer to another second job. This also applies to travel from work to a place of business where you are engaged in work-related activities.

Between Work Places – A deduction allows the cost of travel from your normal workplace to other workplaces. The cost of travel from the alternative workplace back to the normal workplace or directly home is also an allowable deduction.

Home to Alternative Work Place – A deduction is allowable for the cost of travel from home to an alternative workplace. A deduction is also allowable for the cost of travel from the alternative workplace to the normal place of employment or directly home.

Between Home and Shifting Places of Employment – A deduction is allowable for the cost of travel from home where you: (a) do not work to any regular pattern; (b) there is no long term plan by which you can predict what will be required of you in the future; (c) there is no certainty as to the range of work locations you will attend over a period.

What Car Expenses Can I 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).

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.

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.
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.

See this post for details on claiming a Tax Deduction for Self Education.

Home Office Expenses

If you perform any employment activities from home, there are some expenses that teachers can claim on your tax return. Ideally, you should have a room set aside as a home office.

Home office expenses for an employee are intended to account for “running” costs, which relate to using the facilities in the home.

Method of claiming home office expenses:

Although the diary method that records actual running expenses relating to performing work in your home office may give a more accurate calculation of home office expenses, our clients almost always choose the Tax Office set rate per hour method.

Using this method, you can apply a fixed rate per hour based on the number of hours you use the home office. This method is intended to account for the cost of electricity and depreciation of office furniture, equipment, and computers.

For the rate applicable to home office expenses and more information on claiming a tax deduction.

Agency Costs

The employer usually meets agency commissions – A commission paid to an agency, and a deduction is not allowable. If you actually incur the cost, then a deduction is allowable.
Agency fees – A deduction is not allowable for upfront fees, joining fees, or search fees paid to an agency.
Agency Teachers – A deduction is not allowable for the cost of obtaining employment through an agency, including preparation of resumes, calls to the agency, as well as telephone/mobile rental, beepers, pagers, and answering machines used for contacting the agency. A deduction is also not allowable for the cost of travel to and from employer hospitals, clinics, etc. A deduction may be allowable where the agency actually employs you.

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 essential 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 a 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. You can obtain details of registered corporate wardrobes can be obtained 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.

Meals and Travel

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.

The cost of meals and incidental expenses when you are required to stay away from home overnight for work (if you receive an allowance from your employer, you can claim the full amount of that allowance provided it is shown on your PAYG payment summary). If you didn’t receive an allowance, you should keep receipts to prove the amount you have spent on all meals and accommodation.

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 parking fees, bridge and road tolls paid while driving the truck between your depot and your client’s depot (but NOT while driving to and from work)

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)

Other Allowable Work Expenses

Parking – A deduction is allowable for parking fees (but not fines) and tolls if the expense is incurred while traveling:
(a) between two separate places of work;
(b) for self-education purposes (if the self-education expenses are an allowable deduction);
(c) in the normal course of duty, and the traveling expenses are allowable deductions.
The cost of annual memberships or union fees
The cost of teachers registration and other practicing certification
Computers, calculators, and electronic organizers – A deduction is allowable for the work-related portion of depreciation on the purchase price of these items
The cost of work-related books, magazines, and journals
Conferences, seminars, and training courses – A deduction is allowable for the cost of attending conferences, seminars, and training courses to maintain or increase your knowledge, ability, or skills in the teaching industry. There must be a relevant connection with your current work activities
First aid courses – A deduction is allowable if it is necessary to undertake first aid training to assist in emergencies. If the cost of the course is met by the employer or is reimbursed, no deduction is allowable
Self-education expenses – A deduction is allowable for the cost of self-education if there is a direct connection between self-education and the current income-earning activities. Self-education costs can include fees, travel, books, and equipment
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 related to work use, including 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, which include:

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.

Reimbursements

If an employee teacher receives a payment from his or her employer for actual expenses incurred, the payment is reimbursement, and the employer may be subject to Fringe Benefits Tax. Generally, if an employee teacher receives a reimbursement, the amount is not required to be included in his or her assessable income, and a deduction is not allowable (see Taxation Ruling TR 92/15).

However, if an employer reimburses motor vehicle expenses on a cents per kilometer basis, the amount is included as assessable income of the employee teacher. A deduction may be allowable for the actual expenses incurred.

If the reimbursement by an employer is for the cost of a depreciable item (e.g., tools and equipment), a deduction is allowable to the employee teacher for depreciation.

If a payment is received from an employer for an estimated expense, the amount received by the employee teacher is considered to be an allowance (not a reimbursement) and is fully assessable to the employee teacher.