ATO to target false laundry claims this Tax Time
The ATO will take strong actions against false clothing and laundry work-related expense claims this Tax Time.
Assistant Commissioner Karen Foat said although many Australians claim clothing and laundry expenses, it is unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income.
The ATO is concerned about the number of people claiming deductions for conventional clothing. Some retail workers claim normal clothes because they are told to wear a certain colour, or items from the latest fashion clothing line.
Others think they can claim normal clothes because they only wear them to work.
The ATO reminds taxpayers that an official dress code does not qualify as a uniform. A claim cannot be made for normal clothing, even if an employer requires the taxpayer to wear it, or only wear it to work.
Taxpayers who cannot substantiate their claims should expect them to be refused, and may be penalised for failing to take reasonable care when submitting their tax return.
If you have any questions or concerns about your work-related clothing, laundry and dry-cleaning expense deduction claims, please do not hesitate to contact us.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
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Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
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Key Takeaways
Only genuine work-related clothing or protective uniforms are deductible.
Everyday clothes or items that could be worn outside work do not meet the ATO’s eligibility criteria.
The ATO is increasing scrutiny — many past claims may now be reviewed or refused.
Given the scale of prior clothing/laundry claims (millions of taxpayers), it’s clear some claims lacked proper basis
Record-keeping remains vital — even for small laundry deductions.
While the ATO allows up to A$150 for laundry/dry-cleaning without receipts (under certain limits), you must still justify the claim and be ready to explain the basis.
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Frequently Asked Questions
Why is the ATO targeting laundry and clothing claims this year?
The ATO says that although many Australians claim work-related clothing and laundry expenses, it’s unlikely that half of all taxpayers genuinely require uniforms, protective clothing or occupation-specific clothes to earn their income — raising concern about widespread false or exaggerated claims.
What kinds of clothing and laundry expenses are legitimately claimable?
You can claim expenses for occupation-specific clothing (e.g. a chef’s uniform), protective clothing or footwear (e.g. steel-capped boots, hi-vis vests), and compulsory uniforms that are distinctive (e.g. with employer logo, unique design), along with the cost of cleaning, laundering or repairing those eligible items — provided you paid the cost yourself and weren’t reimbursed
Can I claim everyday work clothes (like suits, jeans or standard business attire)?
No. Conventional or everyday clothing is not deductible — even if your employer requires you to wear it or you only wear it at work. Dress codes or “business colours” do not count as a uniform under ATO rules.
Do I need receipts to claim laundry or clothing expenses?
If your laundry/dry-cleaning expenses are $150 or less (and your total work-related deductions are within the ATO’s lower-claim threshold), you don’t strictly need receipts — but you must still be able to show how you calculated the claim and that the clothing met eligibility criteria. Otherwise, written evidence is required.
What happens if I claim clothing or laundry expenses that the ATO deems ineligible or false?
The ATO may refuse the deductions, disallow the refund, and could impose penalties for failing to take reasonable care when submitting the tax return. Their data-matching and analytics can flag unusual claims, and claims with insufficient substantiation are likely to be scrutinised.
Can I claim laundry expenses on tax if I don’t have records?
Not really — the ATO has flagged it will target false laundry claims, so I should only claim laundry if I actually incurred the expense and it relates to work clothing, and I should have evidence or a reasonable method to back it up (especially if my claim is higher than the basic thresholds).
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