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

• work-related car expenses
• expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers
• actual expenses – such as any petrol, oil and repair cost if you travel in a car that is owned or leased by someone else
• public transport – including taxi fares
• bridge and road tolls
• parking fees
• short-term car hire.

Generally, the cost of normal trips between your home and work is a private expense that you cannot claim an income tax deduction for. However, as an employee in the real estate industry, there are certain situations where you may be able to claim deductions for travel between your home and workplace.

You can claim the cost for travelling between workplaces

• 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
• from your home to an alternative workplace, and then to your normal workplace or directly home

You may be entitled to claim the travel costs as a self-education expense. If you travel to and from a place of education because you are completing a work-related education course,

You can claim the cost of using your car or vehicle to travel between home and work if:

• you have to carry bulky tools and equipment you need to use for work
• it is essential to transport them 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.

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.

Working out if your vehicle is a car

Your vehicle is considered not 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 minivan
• a motorcycle.

Claiming car expenses

From 1 July 2015 – two methods

• cents per kilometre method
• logbook method

Before 1 July 2015 – four methods

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

The following two methods are those most commonly used by real estate employees.

Cents per kilometre method

You can use this method to claim up to a maximum of 5,000 work kilometres per car even if you have travelled more than 5,000 work kilometres. For example, if you travelled 5,085 work kilometres, you can only claim the cost of travelling 5,000 kilometres with this method. You cannot claim for the extra 85 kilometres.

When working out your declaration using the cents per km 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.

The logbook method provides a way of working 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.

To work out your deduction using the logbook method, you must keep:

• 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.

Remember, your car expenses do not include capital costs such as the purchase price of your car or the cost of improvements (not repairs) you make to it.

You can only claim your actual expenses for vehicle other than cars

If your vehicle has a carrying capacity of one tonne or more, such as a van, or a motorcycle, you can claim for the actual expenses incurred:

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

If you use your vehicle for both work and private purposes, you can use a diary to show how much of your expenses relate to each. Remember to keep receipts for your actual expenses.

Leasing and hire purchase payments

One of the big differences between commercial leasing and hire purchase is in the handling of tax deductions. With hire purchase, instead of claiming the whole monthly payment as a tax deduction as you do with a lease, you claim the depreciation of the motor vehicle and any interest charged.

Hire purchase

Under a commercial hire purchase agreement you do not become owner of the motor vehicle until all monies owed under the arrangement are paid. However, you can still claim a tax deduction for the depreciation on the motor vehicle as well as the interest component of the loan repayments to the extent that the motor vehicle is used for work-related purposes. That is, interest on the loan payments and depreciation up to the car limit.

Commercial leasing

If you take out a car lease, the lender agrees to rent the vehicle to you for a set period for an agreed amount. If the vehicle is entirely for work purposes and not a luxury car, the lease payments are fully tax deductible but you cannot claim depreciation.

If the vehicle is a luxury car, you can claim a tax deduction for the finance component of the lease payments (interest) but not for the part of the lease payments that represent repayments of principal. You can also claim a deduction for depreciation subject to the car limit.

If you lease a car under a salary sacrifice novated lease arrangement, you cannot claim a deduction for the lease payments as these expenses are incurred by your employer. You also cannot claim depreciation.

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

• compulsory uniforms and corporate wardrobes
• 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 it
• a non-compulsory corporate uniform that your employer has registered with AusIndustry – check with your employer if you are not sure
• protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include sun-protection clothing, safety coloured vests, rubber boots and steel-capped boots.

You can claim a deduction for sunglasses, sunhats and sunscreen if you :

• have to work in the sun for all or part of the day
• use these items to protect yourself from the sun while at work.

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.

If your total claim for work-related expenses is $300 or less, or the total amount of your laundry expenses is $150 or less, you do not need to keep receipts or other written evidence of your claim. 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, a diary record of your laundromat costs.

You cannot claim a deduction for the cost of purchasing or cleaning a plain uniform or conventional clothing you wear to work, even if your employer tells you to wear it. This includes:

• clothing you wear for medical reasons, such as support stockings
• conventional clothing that is damaged at work
• everyday footwear such as dress, casual or running shoes.

You may be able to claim a deduction for the costs you incur in running your home office (running cost) If you perform some of your work from 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 $300 or less, you can claim a full deduction for the work-related portion
• 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.
• 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.
• For depreciating assets, you must keep records for a further five years from the date of your last claim for decline in value.

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.

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.

You can only claim occupancy expenses where your home office is considered to be a place of business. Occupancy expenses include rent or mortgage interest, council rates and house insurance premiums.. If your only income is paid to you as an employee, you are generally not able to claim a deduction for your occupancy expenses.

The cost of phone expenses

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, you cannot claim a deduction for that portion.

You can claim a deduction for the cost of purchasing computers or laptops (if $300 or less) that you use for your work. You must apportion the amount of your claim where the computer or laptop has been used in part for private purposes or was not available for use during all of the income year.

You can claim the depreciation via the decline in value process if the computer laptop costs more than $300. As a general rule, desktop computers are depreciated over a period of four years, and laptops can be depreciated over three years.

You can claim the work-related proportion of the following:

• the decline in value of a computer
• any repair costs
• the interest on money borrowed to buy the computer
• internet access.

You cannot claim any deduction for decline in value (depreciation) of items used in your employment if they were provided to you by your employer.

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.

You can claim a deduction for the cost of purchasing a camera that you use for work. If the camera costs more than $300, you cannot claim a deduction for the full purchase price. However, you can claim a deduction for its decline in value (depreciation). Your claim for depreciation applies to the whole amount, not just the amount over $300.

If you use the camera partly for private purposes, the amount you can claim depends on the amount of time you use the camera for work purposes. For example, if you use the camera half for work purposes and half for private purposes, you can only claim half the decline in value.

You can claim a deduction for the cost of renewing a real estate certificate of registration held by you as an employee in respect of your employment. You cannot claim a deduction for the cost of obtaining the initial certificate of registration.

You can claim a deduction for the cost of advertising for example:

• through newspapers
• letterbox drops
• signage
• bunting.

You cannot claim a deduction for the cost of advertising if you earn your income from a fixed salary and you are not entitled to earn commission.

You can claim a deduction for the cost of gifts bought for work purposes if you are a salesperson or property manager entitled to receive your income from commission or both commission and retainer. You cannot claim a deduction if you earn a fixed income and you are not entitled to earn a commission.

Gifts you can claim include:

• a Christmas hamper
• a bottle of whisky
• wine
• gift vouchers
• a bottle of perfume
• flowers
• a pen set.

Gifts you cannot claim are tickets to:

• the theatre
• a live play
• a sporting event
• a movie
• a holiday, including an airline ticket
• an amusement centre.

These gifts are in the form of entertainment and are not deductible.

You cannot claim a deduction for entertainment expenses because they are specifically disallowed under the tax law and they are also a private expense. For example, if you buy lunch for a client or business associate, the food and drink expense is ordinarily a private matter, rather than a working or business expense.

You cannot claim a deduction for expenses incurred in attending social functions. These expenses are considered to be private and not sufficiently related to the production of income. The cost of travelling to another workplace to attend a social function is also not deductible.

The ‘provision of entertainment’ generally means:

• entertainment by way of food, drink, recreation
• Accommodation or travel to do with providing entertainment by way of food, drink or recreation.

You can claim a deduction for the cost of the work-related portion of those newspapers containing property sections. If there is a sufficient connection between the duties carried out by you as a real estate employee and the content of the newspapers, the portion of the cost of relevant newspapers related to work is allowable.

The cost of work-related short training courses or conferences, for example first aid, OH&S, bookkeeping, sales techniques, customer service, computer skills or management, which are not run by a University or TAFE (you can also claim for the cost of travelling to and from the course and any accommodation and meal expenses if you are required to stay away overnight)

The cost of attending compulsory CPD training courses

The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE (for example Diploma in Property (Real Estate). If you are studying, you can also claim for the cost of books, stationery, equipment and travel required for your course