Tips for business owners to save tax

Deductions You Can Claim as Employees

Tax Tips
May 10, 2024•5 min read

“Saving Tax is the extra income that you do not have to work for.”

Introduction:

Australian Taxation Office allows us to have certain deductions that would help us reduce our taxable income and hence tax payable.

To Claim Tax Deductions, the expenses must have been spent and not reimbursed by your employer, the expenses must be directly related to your job and you should have receipt of payment or proof on your bank statement.

1. Work Related Car expenses

If you use your personal car for work purpose then you can claim the car expenses, but there are some conditions:

You cannot claim for the part from your home to place of work and vice versa, you can claim if you have to travel from one work to another work or your job is of nature that you need to travel to meet clients, suppliers (eg sales persons), you went for training.

You have two methods that you can claim:

1) Cents Per Kilometer: If you do not use the car a lot then you can use this method. ATO allows 85 cents per km for the financial year 2024 and maximum you can claim is 5000km so total maximum $4250.

2) Log Book Method: If you use the car a lot then we recommend using this method. In this method you should keep log book of all the travel you make for 12 Weeks. You can buy physical logbook from News Agency or can use electronic. You can use the excel from this link as well. This log book will help you calculate % of the car you use for your job / business. Add all the expenses for the car, Fuel, Registration, Green Slip, Insurance, Repair and Maintenance, Tolls, Parking, interest if you have borrowed, and even depreciation (There is max car cost limit of $68,108) for 2024 FY.

Tip: take a picture of your odometer at 1st July and 30 June to calculate the total travel for the year. calculate how much fuel you use in full tank, this will give you how much fuel you use for the whole year and multiply with average fuel price of the year and you get the Fuel expenses for the full year.

2. Work Related Travel Expenses

If you do not have car and use public transport or uber or share drive for work then you can claim expenses for the travel between one place of work to other or you need to travel for work. You cannot claim from your home to work and work to home.

If you have to go to another city for work and had to stay overnight, you can claim travel expenses, meal and accommodation expenses and incidental costs. You cannot claim if your employer or third party reimburse the expenses.

If you travel to overseas for your employment duty or seminar related to your profession, you can claim for travel expenses, food and accommodation expenses. ATO provides reasonable expenses for both domestic and international travels.

3. Work Related Uniform, Protective Clothing Expenses

You can claim for the uniform if you have purchased or paid for. To claim the uniform deduction it should have logo or specific to occupation like chef uniform, overhauls and heavy duty pants. You cannot claim for suits or black pants even though your employer has rules to wear them.

You can claim deductions for protective clothing like reflective clothing, jackets if you have to work in freezer, Steel capped safety shoes, Non slip Shoes etc

You can claim expenses for laundry and dry cleaning of the uniforms mentioned above.

4. Work Related Education Expenses

You can claim for the TAFE or the university courses that you have undertaken to maintain or enhance your existing job.

5. Other Work Related Expenses

  • Union Fees & Professional Registration

  • Books, Journals, Magazine subscriptions, software subscriptions

  • Training, Conference, Workshops and Seminar related to your job.

  • Mobile phone usage, phone and internet usage (% of Non personal usage)

  • Mobile phone, Laptop and computer (Depreciate over 3 years and only % of Related to work).

  • Home office Expenses (Fixed Rate and Actual Cost)

  • Tools & Equipment of your trade (Depreciate if cost more than $300)

  • Repair and Maintenance of Mobile Phone, Laptop, Computer, Tools and Equipment

  • Protective items (Hard Hats, Safety glasses, Sunscreens, Facemasks)

  • If you received Overtime Meal Allowance and you bought the meal for the overtime work then you can claim either actual you spent if less than allowed by ATO or maximum ATO's reasonable amount.

6. Interest Expenses on borrowed money for investment

If you borrowed money to invest in shares or invest in high interest earning investments then we can claim the interest expenses on these investment.

This is what we recommend if you have investment to use debt recycling technic. if you have investment and you have principal place of residence then use your money to pay down the debt which is non deductible. Then borrow to invest in those shares making the interest expenses deductible.

7. Donation Made to DGR Charities

You can claim Donations made to DGR Charities. Cannot Claim for donations made to community organizations etc.

9. Expenses for Managing Tax Affairs (Tax Agent Fees)

You can claim

  • Interest charged by ATO

  • Tax Agent fee or Accountant Fee, Travel expenses to accountant or tax Agent

10. Personal Superannuation Contribution

If you have high income or receiving unexpected income because of capital gains or termination payment and you have enough cash then you can contribute to your superannuation provided you have unused carry forward personal contribution cap.

It has to be deposited in your super before 30 June and you need to fill the form 'Notice of intent to claim deductions' and send to your superannuation.

11. Income Protection Insurance

If you have income protection insurance under your name then you can claim the premium you paid.

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