Nurses & Midwives: Work-related expenses
Source: Australian Tax Office
To claim a work-related deduction:
- you must have spent the money yourself and weren’t reimbursed
- it must be directly related to earning your income
- you must have a record to prove it.
If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
Deductions for nurses, midwives and direct carers can include:
- Car expenses
- Travel expenses
- Clothing expenses
- Self-education expenses
- Meal expenses
- Phone expenses
- Other expenses
Remember to report all income in your tax return and remove any portion of your expense that is not work-related.
When you claim a deduction, you are stating that everything you have told us is true and can be supported with records. You are responsible for the claims you make in 1 of 15 your tax return, even if you use a registered tax agent to prepare and lodge it on your behalf.
You can claim a deduction for the cost of using your car for work-related travel you incur in the course of performing your job as an employee if you travel:
- directly between two separate workplaces because you have two different employers (for example, you have a second job)
- for work-related purposes from your normal workplace to an alternative workplace that is not a regular workplace and back to your normal workplace or directly home (for example, if you need to go to another hospital for a meeting)
- between two workplaces that are not regular workplaces or between a workplace that is not a regular workplace and a place of business (for example, between two hospitals)
- between home and work, only if:
- you have to carry bulky tools or equipment, at least 20kgs, that you use for work and there is no secure area for storing your tools or equipment at work
- your home is considered a base of employment and you either commence work at home and travel directly to another base of employment to continue working, or travel from another base of employment to home to continue working
- you travel from your home to an alternative workplace, that is not a regular workplace, for work activities and then to your normal workplace or directly home.
The Work-related car expenses calculator helps calculate the amount you can claim as a tax deduction for work-related expenses.
Claiming car expenses
If you are entitled to claim a deduction for your work-related car expenses you incur in the course of performing your job as an employee, there are two methods you can choose from to work out the amount you can claim.
The two methods are the:
- cents per kilometre method
- logbook method.
Cents per kilometre method
You can use this method to claim up to a maximum of 5,000 work kilometres. For example, if you have travelled 5,085 work kilometres, you can claim 5,000 work kilometres but can’t claim 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 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.
When using the logbook method, you must keep all of the following:
- a 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.
If your employer reimbursed your car expenses calculated by reference to the distance travelled by the car, include the amount you received on your tax return, even if you can’t claim a deduction for these expenses.
You can claim a deduction for the decline in value (depreciation) of your car up to the value of the car limit if you use the logbook method.
Car expenses you can’t claim
You can’t claim a deduction for the cost of:
- travelling to another hospital or other workplace for a social function
- using your car to travel between your home and work
- if the travel is a normal trip between your home and your workplace; it is a private expense, even if you do small tasks on your way to or from work such as picking up mail for the hospital, or
- just because you do shift work, you are on call or there is no public transport available
- car expenses if your employer or any other person provides a car for you and you do not pay for any of the running costs (such as petrol, repairs and other maintenance costs). This includes a car provided under a salary sacrifice arrangement
- any expenses you incur for the direct operation of a car that your employer provides and that you or your relatives use privately at any time, even if the expenses are work related. This includes a car provided under salary sacrifice arrangement. Such expenses form part of the valuation of the car for fringe benefits tax purposes.
You can claim work-related travel expenses for:
- using vehicles other than cars as well as parking fees and tolls (parking at or travelling to a regular workplace is not ordinarily considered to be a work-related use of the vehicle)
- costs associated with taxis or short-term car hire.
It is important to note:
- If you travel in the course of your work and take a relative with you, you can claim a deduction only for your own expenses.
- If you are claiming travel expenses and you receive a travel allowance from your employer, you must show the allowance on your tax return.
Travel expenses you can’t claim
You can’t claim:
- the cost of meals incurred during a normal working day that does not involve an overnight stay, even if you receive a travel allowance
- costs met by your employer or costs that are reimbursed.
You can claim a deduction for the cost of buying, hiring, repairing and cleaning certain work-related uniforms, occupation-specific clothing or protective clothing.
If you received an allowance from your employer for clothing, uniforms, laundry or dry–cleaning, show the amount on your tax return. You can’t automatically claim a deduction just because you received a clothing, uniform, laundry or dry–cleaning 4 of 15 allowance from your employer.
Clothing expenses you can’t claim
You can’t claim:
- a deduction for the cost of purchasing or cleaning a plain uniform or conventional clothing worn at work, even if your employer tells you to wear them, as it is a private expense. This includes expenditure by employee nurses on
- clothing worn for medical reasons (for example, support stockings)
- conventional clothing that is damaged at work
- everyday footwear (for example, dress, casual or running shoes). You can claim a deduction for the cost of special non-slip nursing shoes
- costs met by your employer or costs that are reimbursed.
A compulsory uniform is a set of clothing that, worn together, identifies you as an employee of an organisation that has a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
You may be able to claim a deduction:
- for shoes, socks and stockings if they are an essential part of a distinctive compulsory uniform, the characteristics of which – colour, style, type – are specified in your employer’s uniform policy
- for single items of distinctive clothing if it is compulsory for you to wear at work, such as a jumper or tie
- if the uniform is consistently enforced
- if the design of the uniform is registered and your employer requires you to wear the distinctive uniform, even if it is not consistently enforced
Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.
Non-compulsory uniforms or corporate wardrobe
If your employer requires or encourages you to wear a distinctive uniform or corporate wardrobe but does not consistently enforce the wearing of it, you can claim a deduction for the cost of the clothing only if the design of the clothing is registered. If you wear a non-compulsory uniform or corporate wardrobe, you can’t claim for stockings, socks or shoes as these items can’t be registered as part of a non-compulsory uniform. Your employer can tell you if your non-compulsory uniform or corporate wardrobe is registered.
You can claim a deduction for the cost of occupation-specific clothing. This is clothing that is specific to your occupation, is not every day in nature and would 5 of 15 allow the public to easily recognise you as a nurse. No deduction is allowable under the category of occupation-specific clothing unless your uniform is one normally worn by nurses. However, you may be able to claim a deduction under other categories.
Protective clothing is clothing you wear to protect yourself from the risk of illness or injury posed by your income-earning activities or the environment in which you are required to carry them out, for example, non-slip nursing shoes. You can claim a deduction for the cost of buying, hiring, replacing or maintaining protective clothing. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage, for example, laboratory coats and aprons.
Laundry and dry-cleaning
You can claim a deduction for the cost of laundering and dry-cleaning eligible work clothes, including:
- compulsory uniforms
- single items of compulsory clothing
- non-compulsory uniforms or corporate wardrobe
- protective clothing.
You can claim laundry expenses for washing, drying or ironing such work clothes, including laundromat expenses. If your claim for laundry expenses is $150 or less, you do not need written evidence; you may use a reasonable basis to work out your claim. For washing, drying and ironing you do yourself, we consider that a reasonable basis for working out your laundry claim is:
- $1 per load – this includes washing, drying and ironing – if the load is make up only of work-related clothing, and
- 50 cents per load if other laundry items are included.
If you choose a different basis to work out your claim, we may ask you to explain that basis.
If your claim for laundry expenses is more than $150 and your total claim for work-related expenses (other than car, meal allowance, award transport allowance and travel allowance expenses) exceeds $300, you need written evidence for the total claim. You can claim the cost of dry-cleaning work clothes if you have kept written evidence to substantiate your claim. You do not need written evidence if your total claim for work-related expenses is $300 or less.
Self-education expenses are expenses related to a prescribed course of education provided by a school, college, university or other place of education.
You are eligible to claim your self-education expenses if you can show that the study has a sufficient connection to your current employment; that is, the study:
- maintains or improves the specific skills or knowledge you require in your current employment
- results in, or is likely to result in, an increase in your income from your employment.
The Self-education expenses calculator helps calculate the amount you can claim as a deduction for self-education expenses.
If you are eligible, you may be able to claim:
- expenses such as course fees, textbooks, stationery, photocopying and student union fees
- the cost of meals if, as a result of your self-education, you had to sleep away from your home for one or more nights
- home office expenses
- expenses for travelling from your home to your place of education and back
- expenses for travelling from your workplace to your place of education and back
- expenses for travelling the first leg of each trip from your home to your
- place of education and then to your workplace, or
- workplace to your place of education and then home
- the decline in value (depreciation) of your computer apportioned depending on private use and use for self-education. The effective life of a laptop is three years, and four years for a desktop
- costs you incur attending seminars, conferences, education workshops or training courses that are sufficiently connected to your work activities can be claimed on your tax return.
In some circumstances you may have to reduce your deduction for self-education expenses by $250. However, you may have other types of expenses (some of which are not deductible) that can be offset against the $250 before you have to reduce the amount you can claim. For more information, see $250 reduction.
Example: study directly relevant to employment
Ahmed is a trainee nurse undertaking his Bachelor of Nursing as part of his traineeship.
Ahmed is eligible to claim a deduction for his study expenses because his 7 of 15 study is improving his nursing skills and is clearly relevant to his employment.
Example: study to improve knowledge and skills in current job
Carmel is a registered nurse working in a rural hospital and currently studying to specialise in paediatrics.
Carmel is eligible to claim her self-education expenses for this course because her studies will maintain and improve the skills and knowledge she needs to perform her current duties (which include caring for children).
Example: claim a reasonable proportion of study
Kenny is employed as a carer. He is studying a Bachelor of Nursing so he can become a registered or qualified nurse. Kenny’s employer asks him to use the skills and knowledge he gained from his study in his job as a carer by dispensing medication once he has his medication administration endorsement.
Kenny is eligible to claim a deduction for a reasonable proportion of his study expenses insofar as they relate to his attaining his medication administration endorsement as his studies increase or improve the skills he needs to do his current work.
Example: study to upgrade qualifications
John is a registered nurse working in a hospital and currently studying to specialise in intensive care nursing. The demand for specialists is high and John can expect to pick up a specialist role shortly after completing his studies. John is eligible to claim self-education expenses because his study will upgrade his qualifications and is likely to lead to increased income.
Self-education expenses you can’t claim
You are not eligible to claim a deduction for your self-education expenses if:
- you are not earning income relevant to the type of study you are undertaking
- you were only working casually to support yourself whilst studying and can’t show the subject or subjects are relevant to the duties you currently perform
- the only income you received was from youth allowance, Austudy, ABSTUDY or similar payments providing financial assistance
- the claim is for repayments you make on loans you have with the
- Student Financial Supplement Scheme (SFSS)
- Higher Education Loan Program (HELP)
- Student Start-up Loan (SSL)
- Trade Support Loan (TSL)
- it’s for the cost of meals, other than listed above.
It is not sufficient to show that a course:
- might be generally related to your current employment, or
- enables you to get new employment.
Example: can’t claim due to limited use in current role
Ling is a registered nurse working in an aged care facility while studying to become a specialist nurse in midwifery. The study will primarily provide skills for a new position, which means she will have to seek new employment.
Ling is not eligible and can’t claim her self-education expenses because her specialised study has only limited use in her current work and therefore lacks sufficient connection to the duties performed.
Example: study is not relevant to current duties
Claire is a personal carer working in a nursing home. Her duties include giving personal care to residents, assisting with daily living activities and reporting to a registered nurse about the patients. She does not take temperatures, blood pressure or administer medications. Claire decides to complete a Bachelor of Nursing to become employed as a registered nurse, which will involve different duties.
Claire is not eligible to claim a deduction for her self-education expenses because the course is not relevant to her duties.
Example: working in an unrelated field
Tommy is a part time nursing student who was supporting himself by driving taxis. Having completed sufficient modules to be able to work as an enrolled nurse Tommy applies for a job as an enrolled nurse and is successful.
Tommy is not eligible to claim the nursing study expenses he incurred while earning income as a taxi driver. This includes course fees he paid before he started working as a nurse, even if the fees covered modules that he has not yet completed. However, now he is working as an enrolled nurse, Tommy is eligible to claim his nursing self-education expenses incurred after he commenced working as an enrolled nurse.
Example: working to support study rather than studying to increase skills
Duong is employed on a casual basis as a carer through a nursing agency to support himself whilst studying for a Bachelor of Nursing. Once he has his degree, Duong will be able to work as a registered nurse.
Duong is not eligible to claim his study expenses as a tax deduction because he was working to support his study rather than studying to increase his skills, knowledge or income from his work activities as a casual carer.
Example: receiving Austudy payments
Michelle starts a full time Diploma of Nursing through her local TAFE. As she has two young children, she applies for and receives Austudy payment from Centrelink rather than finding employment to support herself while studying.
Michelle is not eligible to claim a deduction for her self-education expenses as she received Austudy payments to support her while studying and the study was not connected to any work duties.
You can’t claim a deduction for the cost of meals eaten during a normal working day as it is a private expense, even if you receive an allowance to cover the meal expense.
You may be able to claim a deduction for overtime meal expenses you incurred if you received an overtime meal allowance from your employer which was paid under an industrial law, award or agreement.
You can only claim for overtime meal expenses incurred on those occasions when you worked overtime and you received an overtime meal allowance for that overtime. Amounts received as overtime meal allowance must be included as income on your tax return.
If you have received an award overtime meal allowance not shown on a payment summary, you may choose not to include the allowance as income on your tax return and not claim a deduction, as long as the allowance does not exceed the reasonable allowance amounts and you have fully expended it.
An amount for overtime meals that has been folded in as part of your normal salary and wage income is not considered to be an overtime meal allowance.
To claim a deduction you will need written evidence for the whole of your claim if your claim per meal is more than the rate stated in TD 2017/19 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2017–18 income year?
See also: TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses.
Phone calls, phone rental and connection costs
You can claim a deduction for the cost of work-related phone calls and internet usage if your employer needs you to use your personal devices for work.
You can claim a deduction for your phone rental if you can show that you are on call or are regularly required to phone your employer while you are away from your workplace. If you also use your phone for private purposes, you must apportion the cost of phone rental between work-related and private use. You need to keep a 11 of 15 diary of your work calls over a 4 week period to enable you to establish the business use percentage of your phone or alternatively you can identify the work-related calls from an itemised account.
You can’t claim a deduction for the cost of:
connecting a phone, mobile phone, pager or any other telecommunications equipment as it is a capital expense
an unlisted phone number (silent number) as it is a private expense.
Here is a list of other expenses commonly incurred by nurses. You can’t claim costs met by your employer or costs that are reimbursed.
See Capital allowances for equipment you may be able to claim a capital allowance deduction, including:
- calculators and electronic organisers
- computers and computer software
- answering machines, phones, facsimile machines, mobile phones, pagers and other telecommunications equipment
- a professional library
- tools and equipment
- dedicated stopwatches and fob watches (but not ordinary wristwatches).
Agency commissions and agency fees – you can claim a deduction for commission payments you made to a nursing agency. You can’t claim
- if your employer has paid the commission payment for
- upfront fees, joining fees or search fees paid to a nursing agency.
Annual practising certificate fees – you can claim a deduction for the cost of renewing your annual practising certificate.
First aid courses – you can claim a deduction for the cost of first aid training courses if you, as a designated first aid person, are required to undertake first aid training to assist in emergency work situations.
Home office – you may be entitled to claim deductions for running costs, however, occupancy expenses are generally not deductible for an employee. You must keep records. See, Home office expenses.
Interest costs – you can claim the cost of interest on money borrowed to purchase work-related equipment. If the equipment was also used for private purposes, you can’t claim a deduction for that part of the interest.
Seminars, conferences and training courses – you can claim a deduction for the cost of attending seminars, conferences and training courses that are sufficiently connected to your work activities.
Stationery – you can claim a deduction for the cost of street directories,logbooks, diaries, pens and other stationery to the extent that you use them for work.
Technical or professional publications – you can claim a deduction for the cost of journals, periodicals and magazines that have a content specifically related to your employment as a nurse.
Repairs to tools and equipment – you can claim a deduction for the cost of repairing tools and equipment for work. If the tools or equipment were also used for private purposes, you can’t claim a deduction for that part of the repair cost.
Union and professional association fees – you can claim a deduction for these fees. If the amount you paid is shown on your payment summary, you can use it 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 can claim a deduction, called a capital allowance, for the decline in value of equipment used for work. If the equipment is also used for private purposes, you can’t claim a deduction for that part of the decline in value.
You can’t claim a deduction if the equipment is supplied by your employer or any other person. Generally, the amount of your deduction depends on the effective life of the equipment.
Equipment costing $300 or less
If you purchased equipment costing $300 or less and you use it mainly for work, you can claim an immediate deduction for the work-related portion of the cost.
You can’t claim an immediate deduction if the equipment is:
- part of a set that you buy in the same income year and the total cost of the set is more than $300 (the set rule)
- one of a number of identical or substantially identical items you buy in an income year and the total cost of the items is more than $300 (the multiples rule).
There is also an option to pool equipment costing less than $1,000 and equipment written down to less than $1,000 under the diminishing value method. A deduction for the decline in value of equipment in such a low-value pool is worked out by a single calculation using set rates.
- Low value pool deduction
- Guide to depreciating assets
- PS LA 2001/6 Home office expenses: diaries of use and calculation of home office expenses
- TR 95/15 Income tax: nursing industry employees – allowances, reimbursements and work-related deductions
Other expenses you can’t claim
Child care – you can’t claim a deduction for child care expenses. These are private expenses, even if you need to pay for child care to go to work.
Drivers licence – you can’t claim a deduction for the cost of getting or renewing your driver’s licence as it is a private expense.
Fines – you can’t claim a deduction for fines imposed under a law of the Commonwealth, a state or territory, a foreign country or by a court, for example, a fine you received if you were caught speeding when driving between jobs.
Glasses and contact lenses – you can’t claim a deduction for the cost of buying prescription glasses or contact lenses as it is a private expense relating to a personal medical condition.
Grooming including hairdressing, cosmetics, hair and skin products – you can’t claim a deduction for these items as they are private expenses.
Newspapers – you can’t claim a deduction for the cost of newspapers as it is a private expense.
Removal and relocation – you can’t claim a deduction for the cost involved in taking up a transfer in an existing employment or taking up new employment with a different employer.
Union and professional association fees – you can’t claim a deduction for:
- joining fees, or
- levies or other amounts you paid to assist families of employees suffering financial difficulties as a result of employees being on strike or having been laid off.
Watches – you can’t claim a deduction for the cost of buying or replacing an ordinary wristwatch as it is a private expense.
Sourced from the Australian Tax Agent