You can claim for travel expenses that directly relate to your work as an employee. These expenses may include:

• transport expenses – for example, public transport fares, taxi fares and the running costs associated with using motor vehicles, motorcycles, bicycles
• the costs you actually incur when using a borrowed car, such as fuel, oil and repair costs
• bridge and road tolls
• parking fees.

You can claim the cost of using your motor vehicle to travel between your home and work if all of the following apply:

• you have to carry bulky tools and equipment you need to use at work
• it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice
• there is no secure area for storing them at your workplace.

You may be able to claim a deduction for work-related daily travel expenses, including the cost of travel:

• directly between two separate workplaces – for example, when you have a second job
• 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 3 below.
• from your home to an alternative workplace, and then to your normal workplace or directly home – for example, if you travel to a client’s premises to work there for the day.

You can claim the cost of travelling between your home and work if you have shifting workplaces – that is, you regularly work at more than one location each day before returning home.

Claiming motor vehicle and other transport 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.

Working out if your motor vehicle is a car

Your motor vehicle is not considered to be a car if it is any of the following:

• a vehicle with a carrying capacity of one tonne or more, such as a utility truck or panel van
• a vehicle with a carrying capacity of nine passengers or more, such as a mini-van
• a motorcycle or similar vehicle.

All other motor vehicles are considered cars.

If you are unsure if your vehicle has a load carrying capacity of one tonne or more you will need to refer to the manufacturer’s handbook for your vehicle – the load-carrying capacity is the difference between the gross vehicle mass (GVM) and the kerb weight.

Claiming car expenses

If the motor vehicle you drive is a car and you can claim a deduction for your work-related car expenses, there are some changes to work-related car expense deductions from 1 July 2015. Below is a breakdown of the methods which applied from and before 1 July 2015.

From 1 July 2015 – two methods – commonly used by employees in the plumbing industry

• cents per kilometre method
• logbook method

Before 1 July 2015 – four methods

• cents per kilometre
• logbook
• 12% of original value
• one-third of actual expenses.

Cents per kilometre method

If you are claiming a deduction under the cents per kilometre method, your claim is based on a set rate for each work kilometre depending on your car’s engine type and capacity.

You can only claim 5,000 work kilometres per car, per year using this method, even if you travelled more – for example, if you have travelled 5,085 work kilometres in a car for the year, 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 you must show how you worked out your estimate of work kilometres. For example, by:

• keeping a diary of work-related travel
• basing your costs on a regular pattern of travel.

Logbook method

The logbook method is a way you can work out the percentage of your car use that is for work purposes. You can then claim a deduction for this percentage of each car expense you incur.

When using the logbook method, you must keep all of the following:

• A logbook: To work out the percentage of your car use that was for work purposes, your logbook must cover a period of 12 continuous weeks and is valid for five years.
• Odometer records: Record your opening and closing odometer readings for each year you use the logbook method.
• Written evidence for all your car expenses: You can use your odometer records to estimate your fuel and oil costs, instead of keeping receipts.

You can claim the cost of actual expenses for vehicle other than cars

If your vehicle is a motorcycle or has a carrying capacity of one tonne or more (such as some panel vans and utility trucks).This means that you cannot claim using either of the car expense methods listed above. Your actual expenses include the cost of:

• fuel and oil
• repairs and servicing
• interest on a car loan
• lease payments
• insurance
• Registration.

You need to keep the receipts for your actual expenses, including fuel and oil costs. Bank statements and credits card transaction receipts are not sufficient evidence for fuel and oil purchases – you need to keep your actual receipts.

If you use your vehicle for both work and private purposes, you can use a diary to record how much of your expenses are for work purposes.

If you borrow a car that is owned or leased by someone else, you may be able to claim costs incurred if you use the car for your work as an employee. These expenses include petrol, oil and repair costs.

You can claim a deduction for parking fees (but not fines) and tolls if the expenses are incurred while you are travelling:

• between two separate places of work
• to a place of education for work-related self-education purposes, if the self-education expenses are deductible
• in the normal course of duty if the travelling expenses are deductible – for example, travel between home and work when transporting bulky tools and equipment.

You may be able to claim a deduction for the costs you incur when you buy, repair or clean your work clothing. Work clothing you can claim a deduction for includes:

• compulsory uniforms and corporate wardrobes – must have your employer’s logo on it
• a single item of distinctive clothing, (such as a jumper, shirt or tie with the employer’s logo), if it is compulsory for you to wear the item
• a non-compulsory corporate uniform if your employer has registered the design with AusIndustry
• protective clothing and footwear – fire-resistant clothing, rubber boots, safety colored vests, overalls, heavy duty shirts and trousers or gloves

You can claim a deduction for the cost of washing, drying and ironing your deductible work clothing as laundry expenses. This also includes laundromat expenses and the actual cost of dry-cleaning.

Conventional clothing (such as jeans, drill shirts and shorts, trousers and socks) is considered private in nature and not deductible. Although these items may have some protective qualities, the limited level of protection they provide usually means that the essential character of the expenditure is private.

Records you must keep

You do not need to keep receipts or other written evidence of your claim if the total amount of your laundry expenses is $150 or less, or your total claim for work-related expenses is $300 or less. However, you must be able to show how you worked out your claim.

If your claim for laundry expenses is more than $150 and your total claim for work-related expenses is more than $300 – not including car, meal allowance, award transport payment allowance and travel allowance expenses – the records you must keep include:

• receipts, or other written evidence of your expenses
• diary entries you make to record
  • your small expenses ($10 or less) totalling no more than $200 that you do not have a receipt for
  • expenses that you cannot get any kind of evidence for, regardless of the amount – for example, laundromat costs.

You can claim a deduction for overtime meal expenses if:

• you received a genuine overtime meal allowance from your employer that was paid under an industrial law, award or agreement
• you have included the amount of the meal allowance as income at item 2 on your tax return
• you have written evidence that includes the costs of meals (such as receipts or diary entries) if your claim was more than the reasonable allowance amount.

Any amount you receive for overtime meals that is included as part of your normal salary or wages – for example, under your workplace agreement – is not considered to be an overtime meal allowance.

You can claim a deduction for the cost of work-related phone calls you make, including calls from mobile phones. You can also claim a deduction for your phone rental if you can show you were on call, or you had to call your employer or clients regularly while you were away from your workplace. If you also used your phone for private purposes, you can only claim that portion of your phone rental costs and calls that relate to your work-related use of the phone.

If you are reimbursed for part or all of your phone expenses, or provided with a pre-paid SIM card by your employer, you can only claim a deduction for the work-related portion you have not been reimbursed for.

Records you must keep

You may be able to identify your work-related calls individually on your itemised phone bill. If you do not receive itemised bills – for example, you use a pre-paid SIM – 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 phone bills.

You can claim a deduction for protective items that protect you from the risk of injury or illness caused by your work or your work environment, such as hard hats and safety glasses

You must have personally incurred the expense to claim a deduction. If your employer paid for the protective items you use, you would not be able to claim a deduction because you did not incur the expense.

Protective equipment includes equipment such as:

• safety helmets
• ear muffs
• harnesses
• face masks
• goggles
• safety glasses
• breathing masks.

You can claim an immediate deduction for personal protective equipment you use on the job that costs $300 or less.

You cannot claim an immediate deduction for protective equipment costing more than $300 that you use for more than a year. However, you can claim a deduction for the equipment’s decline in value (depreciation).

You can claim a deduction for work-related self-education expenses that have a sufficient connection to your current work activities.

Self-education includes:

• courses undertaken at an educational institution, whether it leads to a formal qualification or not
• attendance at work-related conferences, seminars or education workshops
• self-paced learning and study tours.

The cost of self-improvement or personal development courses is generally not deductible.

You can claim a deduction for self-education expenses if you meet any of these conditions:

• you are upgrading your qualifications for your current employment
• you are improving specific skills or knowledge used in your current employment
• you are employed as a trainee and undertaking a course that forms part of that traineeship
• you can show that at the time you were working and studying, your course led, or was likely to lead, to an increase in employment income.

If your employer pays for the course fees outright, or reimburses you upon completion of your course, you cannot claim a deduction for your course fees.

If your self-education meets one of the above conditions, you can generally claim study-related items, such as:

• textbooks
• course fees
• stationery
• internet access
• student union fees
• travel expenses to and from the place of education
• decline in value (depreciation) of equipment you use in your study, such as a computer.

You can only claim the decline in value (depreciation) based on how much you use the equipment for study purposes – for example, if you use your computer half for private purposes and half for study purposes, you can only claim half the decline in value.

If your self-education expenses relate to a course you undertook at an educational institution, you may have to reduce your claim for self-education expenses by $250. Whether or not your claim is reduced by $250 depends on the category of your expenses and does not apply to all self-education expenses.

Records you must keep

You must keep the following records:

• written evidence including full details of the course you have undertaken which includes all of the following
  • the name of the course
  • the institution at which it was undertaken
  • details of the subject studied and course overview
  • whether the study was on a full-time or part-time bases
  • the period the course was undertaken during the year

• receipts or other written evidence of your expenses, including receipts for depreciating assets you have purchased – for example, a laptop
• diary entries you make to record
  • how much you used your equipment, home office, phone and internet access for self-education purposes during a representative four-week period
  • your small expenses ($10 or less) totalling no more than $200 that you do not have a receipt for
  • expenses you cannot get any kind of evidence for, regardless of the amount.

You can claim a deduction for sunglasses, sunhats and sunscreens 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. The cost of prescription sunglasses, including photo-chromatic glasses which have filtering and glare-reducing qualities similar to sunglasses that protect you from the risk of illness or injury at work is not of a private or domestic nature. If you do claim a deduction, you can only claim the work-related portion of your use of the glasses.

You can claim an immediate deduction for the full purchase price of each tool or piece of equipment that:

• you use for your work as an employee
• costs you $300 or less
• was not one of a number of identical or substantially identical tools you started to hold in the income year that cost more than $300
• was not part of a set of tools that you started to hold in the income year that cost more than $300.

You can claim a deduction for its decline in value (depreciation)

If the tool or piece of equipment costs more than $300, you cannot claim an immediate deduction for the full purchase price. However, Your claim for depreciation applies to the whole amount, not just the amount over $300.

Depreciation using the prime cost method is worked out as a percentage of the cost of the equipment. Depreciation using the diminishing value method is worked out initially as a percentage of the equipment’s cost and then as a percentage of the written down value.

Records you must keep

The records you must keep may include:

• receipts or other written evidence of your expenses, including receipts for depreciating assets you have purchased
• diary entries you make to record
  • your small expenses ($10 or less) totalling no more than $200 that you do not have a receipt for
  • expenses you cannot obtain any kind of evidence for, regardless of the amount.

For a depreciating asset, you must keep records for five years from the date of your last claim for decline in value on that depreciating asset. For other expenses, you must keep records for five years from the due date for lodging your tax return. If you lodge your tax return after the due date, the five years start from the date you lodge your tax return.

You can claim a deduction for union and professional association fees.

If the amount you paid is included on your payment summary, you can use the payment summary 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 levies or other amounts you paid to help families of employees suffering financial difficulties as a result of employees being on strike or having been laid off.