Self-education expenses allowed for 'part' of course
Self-education expenses generally are deductible under ITAA 1997 s 8-1 when two elements are met. The first of which is that the expense is from a “prescribed course of education”. The second element is that the intention of the education is to maintain or improve the skills and knowledge required in the taxpayer’s current income-earning activities.
However, typically an expense is not allowable where the intention is for new employment or a new income-earning activity. This includes study in a field in which the taxpayer is not yet engaged. For example, a practicing general medical practitioner would not be allowed to claim self-education expenses for a dermatology course.
This would not be allowable as the study is designed to open up a new income-earning activity as a specialist (TR 98/9 para. 62).
A recent ruling from the ATO has discovered that “not yet engaged” doesn’t particularly mean an entire course of study. Relevantly, a deduction is allowable for individual units of study within a complete course if it can be shown that all other elements of the self-education rules apply.
In the ruling, an individual was employed to deliver an engineering course with an education institution. Part of the duties required the individual to undertake scholarly pursuits and obtain new knowledge in order to deliver this course.
The individual determined that completing a law degree course was adequate in performing their duties.
The ATO was able to acknowledge that parts of this degree had a sufficient connection with the knowledge required to teach the class they were engaged to teach. This included the courses “Legal Conflict Resolution”, “Civil Obligations” and “Construction Law”. The reasoning behind this was that sections of the teaching materials related to anti-discrimination, contract terms and project management, which were parts of the engineering course.
Therefore, the individual was able to claim a deduction for self-education for parts of the degree which, on a whole, may be considered the obtaining of new knowledge.
An individual’s current working situation may not automatically allow a deduction for a course of study undertaken. However, close scrutiny of these courses may entitle them to a deduction for some of the costs involved.
If you have any questions about claiming self-educations expenses as a tax deduction , please do not hesitate to contact us.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
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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.
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Key Takeaways
Self-education deductions are possible — but only when the study supports your existing work.
The rules focus on maintaining or improving current job-related skills rather than pursuing new career paths.
You don’t need to complete a full qualification to claim — individual units may qualify.
This allows flexibility: even a single subject relevant to your work might be deductible if it meets the criteria.
Careful documentation and proof of connection to your job are vital.
Substantiation — course enrolments, fee invoices, receipts for materials, and clarity about how the course relates to your duties — will strengthen the claim.
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Frequently Asked Questions
What makes a self-education expense deductible under Australian tax law?
To be deductible, the study must be part of a “prescribed course of education,” and the purpose must be to maintain or improve the skills and knowledge required in your current income-earning work.
Can I claim expenses for a degree or course I’m studying that is unrelated to my current job?
Generally no. If the study relates to a new occupation or aims at creating a new income-earning activity, it’s not deductible. The study must align with your existing role.
What if only part of the course is relevant — can I still claim a deduction?
Yes — you may claim for individual units/subjects of a course, even if the entire degree isn’t eligible, provided those units have a clear connection to your current employment duties.
What kinds of expenses related to self-education might be deductible?
Deductible expenses may include tuition/course fees, textbooks, stationery, depreciation of study-related equipment (e.g. computer), and other incidental costs — provided they relate directly to the eligible study.
What should I be careful about if I claim self-education expenses?
You need to ensure the study genuinely relates to your current job, keep evidence of the course enrolments and expenses, and avoid claiming studies aimed at starting a new career — the latter are likely not deductible.
Can I claim self-education expenses if only part of my course relates to my current job?
Yes — I can only claim the portion of self-education expenses that directly relates to my current work duties. If a course has mixed content (some relevant and some not), I need to prorate the costs to reflect the work-related part before claiming it as a deduction.
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