How to claim a deduction for work-related expenses

Whatever industry you are in it really does make sense that you know what you can claim at tax time. We have collated some information for you that is based on current information from the ATO. This will be of interest if you are a construction worker.

This information should be really used as a guide and for reference purposes only. We suggest that you seek clarification from a professional. They will be able to let you know the types of tax deductions you can claim as someone in the Construction Industry.

How to claim a deduction for work-related expenses

There are certain conditions that you must satisfy when you make a claim for these tax deductions as a construction worker.

These terms are:

  • you must have spent the money yourself and it must not have been refunded to you by anyone
  • the expense must be directly related to earning your income
  • you must have a record to prove it. An example of proof would be a receipt or an invoice from the supplier.

Be aware that you can only claim the work-related part of expenses. You cannot claim a deduction for any part of the expense that relates to personal use.

Car expenses

You can claim a deduction for your car when you:

  • drive between separate jobs on the same day. An example would be where you drive from your job in construction to your second job as a security guard
  • drive to and from an alternate workplace for the same employer on the same day. This would include travelling between depots or worksites. It would be unusual to make a claim the cost of trips between home and work as a tax deduction. This is the case even if you live a long way from your usual workplace or have to work outside normal business hours. This would include weekend or early morning shifts.

There are some limited circumstances where you can claim the cost of trips between home and work. If, for example, you carry bulky tools or equipment such as a large extension ladder for work. The cost of these trips is deductible only when:

  • your employer requires you to transport the equipment for work
  • the equipment was essential to you to be able to earn your income
  • there was no secure area to store the equipment at the work location, and
  • the equipment is bulky and weighs at least 20kg or is cumbersome to transport.

If you claim any car expenses as part of your tax return, you must keep a logbook. This will help to determine the work-related percentage. It helps to verify you have made a reasonable calculation if you are using the cents per kilometre method to claim.

Clothing expenses

In certain circumstances, you are able to make a claim for certain clothing expenses. You can claim a deduction for the cost of:

  • buying,
  • hiring,
  • mending

Cleaning certain uniforms that are unique and distinctive to your job. This can be because of the environment you work in. It could be protective clothing that your employer requires you to wear. Examples of this would be:

  • steel-capped boots,
  • high-vis vests,
  • fire-resistant
  • sun- protection clothing.

You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work. This is the case even where you only wear that outfit to work and even if your employer tells you to wear it.

Travel expenses

You can claim a deduction for travel expenses if you are required to travel overnight and won’t be going to your usual workplace. So, that would be where you may be travelling to a remote area and dependant on the cost being incurred while you carry out your work duties. This can include expenses such as meals, accommodation and fares. It will also include incidental expenses that you incurred while carrying out your work duties. This is only where your employer has not provided or reimbursed you. Be aware though that circumstances and allowable claims may be different for FIFO workers.

Receiving an allowance from your employer does not automatically entitle you to a deduction. You need to be able to show you were away overnight, you spent the money, and the travel was directly related to earning your income.

Depreciation of tools and equipment expenses for Construction Workers

You may be able to claim a deduction for the cost of buying tools and equipment that you need for work. You can’t claim a deduction relating to any private use of the equipment, though. If the tools and equipment are supplied by your employer or another person, again you cannot claim this as an expense.

If a tool or item of work equipment is only used for work and the tools and equipment undergo repairs and…

  • cost you more than $300. In this case you can claim a deduction for the total cost over a number of years (this is called depreciation)
  • where the cost is $300 or less, you can claim an immediate deduction for the whole cost. Remember that if the tools or equipment were also used for private purposes, you cannot claim a deduction for the personal part of the repair cost.

Other common deductible work-related expenses

As long as the expense relates to your employment, you can claim a deduction for the work-related element of the cost of:

  • protective equipment such as sunglasses, sunhats and sunscreens
  • safety equipment such as harnesses, goggles and breathing masks
  • union fees.

You can’t claim a deduction if the cost was met or reimbursed by your employer.

Please remember that this is a general summary only. Although it is based on info from the ATO we do recommend that you seek the advice of a professional. For more information, go to ato.gov.au/occupations

Other blogs you might enjoy...

$100 off!

Learning Xero doesn’t have to be difficult or expensive. We are offering 10 people who signup to our Xero Essentials course $100 off the ticket price.

Just use coupon code: SALE10 during the checkout