Cleaners’ tax deduction guide
Posted by Northadvisory on June 7, 2017
With 30 June fast approaching, we revisit our series on tax deductions for employees in specific industries. We explore the common tax deductions for employees working as cleaners.
You can claim deductions for your car expenses for travel directly from one work site to the next.
From 1st July 2015, the ATO will only allow for two methods for claiming motor vehicle car expenses.
1. Cents per kilometre method: You can claim up to 5,000 business kilometres per vehicle at 66 cents/km without written evidence to show how many kilometres you have travelled.
2. Logbook method: Under this method you can claim the running costs (e.g. fuel, repair and maintenance, insurance, rego and depreciation etc) of the car based on a business use percentage of the expenses of the car. To work out your business use percentage, you need to keep a logbook which will cover at least 12 continuous weeks in order to record each journey, km’s travelled and indicate whether each journey was business or private during logbook period.
The logbook must also include:
• the odometer readings at the start and end dates for the logbook period,
• the total number of kilometres the car travelled during the logbook period,
• the number of kilometres travelled for work during the logbook period based on the journeys recorded for the period
• the business use percentage of the period
Each logbook is valid for 5 years, after which a new logbook must be kept to work out your business use percentage. Please note that if you decide to replace a vehicle, you will not be required to produce a new logbook provided your last logbook is valid within the 5 year period.
• Generally, the cost of normal trips between your home and work is a private expense which you cannot claim an income tax deduction for. However, as an employee cleaner, there are certain situations where you may be able to claim a deduction from your home and workplace:
o Transporting bulky equipment: You can claim the cost of using your car for travel between home and work if you had to transport bulky equipment you needed to use at work and for which there was no secure storage area at your workplace (e.g. cleaner transporting cleaning tools & equipment from home to workplace).
You can claim a deduction for the cost of buying, hiring, repairing and cleaning certain work-related uniforms or protective clothing items.
• Compulsory uniform: Is a set of clothing that, when worn together, identifies you as an employee of an organisation having a strictly enforced policy that make it compulsory for you to wear the uniform whilst at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the general public.
• Protective clothing: Protective clothing is clothing that 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. 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, such as gloves, safety glasses & goggles, safety coloured clothing, steel capped boots and breathing masks. If you are required to work outdoors and as a result you are exposed to risk of eye damage from sunlight, you can claim the cost of protective sunglasses.
• Laundry and dry-cleaning: You can claim a deduction for the cost of laundering and dry-cleaning work clothes that are eligible according to the relevant categories described above (i.e. compulsory uniform and 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.
You cannot claim:
• purchasing and cleaning of:
o plain uniforms or conventional clothing
o sports clothing
o clothing worn for medical reasons
o everyday footwear (i.e. dress or casual shoes)
• items that were purchased or reimbursed by your employer, and
• a deduction just because you received a clothing, uniform and laundry allowance?
Self-education expenses are expenses related to a prescribed course of education provided by a school, college, university or other place of education. The course must be undertaken to gain a formal qualification for use in carrying on a profession, business or trade or in the course of employment.
You are eligible to claim your self-education expenses as a work-related deduction 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, or
• results in, or is likely to result in, an increase in your income from your employment.
You cannot claim costs met by your employer or costs that are reimbursed. Similarly, you cannot claim a self-education course for the purposes of finding new employment or starting a new income-earning activity (such as running your own cleaning business).
• Capital allowances/Tools & Equipment: 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 cannot claim a deduction for that part of the decline in value. You cannot claim a deduction if the equipment is supplied by your employer or any other person.
Equipment for which you may be able to claim capital allowance includes:
o electronic organisers
o computers and computer software
o answering machines, telephones, facsimile machines, mobile phones, pagers and other telecommunications equipment
• Insurance of tools and equipment: You can claim a deduction for the cost of insuring your tools and equipment to the extent that you use them for work.
• Interest costs: You can claim a deduction for the cost of insuring your tools and equipment to the extent that you use them for work.
• Overtime meals: You can claim a deduction for overtime meal expenses only on those occasions when:
• you worked overtime, and
• your employer paid you an overtime meal allowance under an industrial law, award or agreement
• Repairs: 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 cannot claim a deduction for that part of the repair cost.
• Sunglasses, sunhats and sunscreens: You can claim a deduction for the cost of sunglasses, sunhats and sunscreen lotions if the nature of your work requires you to work in the sun for all or part of the day and you use these items to protect yourself from the sun while at work.
• 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 content sufficiently connected to your employment as an employee cleaner, for example the magazine ‘Inclean”.
• Telephone calls, telephone rental and connection costs: You can claim a deduction for the cost of work-related telephone calls. You need to keep records for a 4-week representative period to determine your percentage of work use in each income year to claim a deduction of more than $50. These records may include diary entries, including electronic records, and bills. Evidence that your employer expects you to work at home or make some work-related calls will also help you demonstrate that you are entitled to a deduction. To claim a deduction for your telephone rental, you must show that you are on call or are regularly required to telephone your employer while you are away from your workplace. If you also use your telephone for private purposes, you must apportion the cost of telephone rental between work-related and private use.
• Union and professional association fees: You can claim a deduction for union and professional association 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.
If you have any questions or other enquires, please contact:
Martin van der Saag
T: 02 9984 7774
T: 02 9984 7774