Claiming a tax deduction for work clothing
Do you need to wear a suit to work? Or perhaps you need to wear a uniform emblazoned with your company’s logo? Perhaps you work in a clothes shop and have to come to work wearing clothes bought in that store?
Whatever the case, you have to conform to your employers dress policy so there might be an expectation that you’ll be treated the same way by the taxman when it comes to claiming tax deductions for your work clothing.
If only it was so simple….. What can I claim?
You can claim a deduction for
- The cost of buying and cleaning
- Occupation-specific clothing
- Protective and unique clothing (ie, not everyday wear)
- Clothing that allows the public to easily recognise your occupation - such as the checked trousers a chef wears
- Distinctive uniforms
- Clothing and footwear that you wear to protect your self from the risk of illness or injury posed by your job or the environment in which you do your job. To be considered protective, the items must provide a sufficient degree of protection against that risk, and might include
- Fire-resistant and sun-protection clothing (including sunglasses)
- Hi-vis vests
- Non-slip nurse's shoes
- Rubber boots for concreters
- Steel-capped boots, gloves, overalls, and heavy-duty shirts and trousers
- Overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes whilst at work
What Can’t I claim?
- You can't claim the cost of purchasing or cleaning clothes you bought to wear for work that are not specific to your occupation, such as a bartender's black trousers and white shirt, or a business suit. Bad news for office workers!
- If you work in a clothing store, you also can’t claim the cost of clothing you purchased in that store, even if you’re required to wear it to work, since those items of clothing are not specific to your occupation (you could also wear them outside work, on a Saturday night out for instance).
- Ordinary clothes (such as jeans, shirts, shorts, trousers, socks, closed shoes) are not regarded as protective clothing if they lack protective qualities designed for the risks of your work. To take the example of closed shoes, you may seek to argue that such shoes provide a level of protection for your feet from work-place hazards but unless that protection is something specific, over-and-above a general level of foot protection, you’re not going to be able to claim a deduction.
Work Uniforms
Compulsory Work Uniform
This is a set of clothing that identifies you as an employee of an organisation. It is compulsory for you to wear the uniform while you’re at work and there is a strictly enforced policy ensuring that this happens. The cost of such a uniform is deductible.
You may be able to claim a deduction for shoes, socks and stockings where they are an essential part of a distinctive compulsory uniform and where their characteristics (colour, style and type) are specified in your employer’s uniform policy (as is sometimes the case with air stewardesses and nurses for instance).
You may be able to claim for a single item of distinctive clothing, such as a jumper if it’s compulsory for you to wear it at work.
Non-compulsory Work Uniform
You can claim for a non-compulsory uniform provided it is unique and distinctive to the organisation you work for.
Clothing is unique if it has been designed and made only for your employer. Clothing is distinctive if it has your employer’s logo permanently attached and the clothing is not available to the public.
You can’t claim the cost of purchasing or cleaning a plain uniform (for example, a generic white shirt and pair of black trousers, as worn by many wait staff).
Non-compulsory work uniforms must usually have a design registered with AusIndustry in order to be tax deductible.
Shoes, socks and stockings can never form part of a non-compulsory work uniform, and neither can a single item such as a jumper.
Cleaning of Work Clothing
You can claim the costs of washing, drying and ironing eligible work clothes, or having them dry-cleaned.
Claiming Home Office
If you carry on all or part of your employment activities from home, then some portion of the home running expenses can be claimed as a tax deduction. Ideally, you should have a room set aside as a home office. Whilst you do not need to have a room set aside for your home office claim, if you are using a room with a dual purpose (e.g. dining room), or a room shared with others (e.g. lounge room) you can only claim the expenses for the hours you had exclusive use of the area.
The expenses that you can claim are
- Heating, cooling and lighting
- Decline in value (depreciation) of home office furniture and fittings
- Decline in value of office equipment and computer
- Computer consumables, stationery, telephone and internet costs claimed on an actual expense basis
Methods of claiming
Diary method/actual running expenses
You will need to keep a diary to work out how much of your running expenses relate to doing work in your home office. The diary needs to detail the time you spend in the home office compared with other users of the home office. Keep diary records for a representative four-week period.
Tax Office rate per hour method
You can use a fixed rate of 45 cents per hour (rate was updated from 1 July 2014 ) for home office expenses for heating, cooling, lighting and the decline in value of furniture instead of keeping details of actual costs. You just need to keep a record of the number of hours you use the home office and multiply that by 45 cents per hour. Under this method you can also include the decline in value of office equipment (i.e. computers, faxes, etc.) but not furniture.
The following costs are not deductible as part of home office expenses
- Mortgage or interest costs
- Rates and taxes
- Depreciation on the home