If your job requires you to maintain a certain level of physical fitness, you may be able to claim your gym membership fees as a tax deduction. Many professions such as emergency services workers, athletes, and personal trainers have fitness standards that must be met as part of their job. However, simply enjoying keeping fit is generally not sufficient to claim gym costs. In this blog post, we will explore the guidelines from the Australian Taxation Office around deducting gym membership when fitness is a requirement of your work.
When gym memberships can be claimed as a tax deduction
The Australian Taxation Office has clear guidelines around claiming work-related expenses like gym memberships. For a gym membership to be deductible, you must be able to show a direct connection between maintaining your fitness and fulfilling your employment duties. You must need to pass fitness tests and medical exams to maintain your employment. The strenuous physical activity must form an essential part of your work. It’s not sufficient for fitness to simply be beneficial for your work – there needs to be an explicit or reasonable implied requirement from your employer.
Some occupations where employers may require a certain level of fitness including members of the Australian Defense Force may be able to claim gym membership costs. Emergency service workers like police officers or firefighters also need to pass regular fitness tests as part of maintaining operational capacity. Sports professionals such as athletes also need gym access to train and perform at their jobs. In these instances, employers may provide gym subsidies or explicitly state in contracts that employees must keep active to do their jobs. You’ll need evidence from your employer to support a claim. A letter outlining fitness standards or including gym costs in a salary packaging arrangement can help demonstrate the work-related nature of membership fees. Keep detailed records of gym attendance and programs focused on building strength or stamina relevant to your occupational requirements. This documentation may be needed in case the ATO audits your tax return.
When gym memberships can’t be claimed as a tax deduction
Simply enjoying exercise or wanting to stay healthy is not a valid reason to claim gym costs according to the ATO. Maintaining general wellbeing or physical appearance through fitness is considered a personal choice rather than a work-related expense. For most occupations, employers do not require above-average fitness levels not inherent to performing the role. As such, gym memberships taken out primarily for personal health goals cannot be deducted.
Incidental or ancillary benefits to work are not sufficient justification. Even if being fit makes you more alert or productive at your job, this does not meet the ATO’s guidelines of fitness being a core requirement of your employment. Things like gym programs for stress relief, weight loss, improved sleep or overall wellbeing would be seen as lifestyle choices rather than direct job needs.
The ATO is very clear that general health maintenance is a private matter. You need to be able to prove gym use is to fulfill specific employer-mandated fitness standards. If membership serves both work and personal interests, only the work-related portion can be claimed as a deduction proportionate to documented workouts. Personal training costs are also excluded unless approved as part of an employment arrangement.
Example: deductible expense and private expense
Bill is a police academy physical training instructor. He regularly attends a commercial gym to ensure he can perform his duties. Bill’s fitness expenses for the year include gym fees and the cost of a tracksuit.
As Bill’s ordinary duties require regular strenuous physical activity, he can deduct his gym fees but not the cost of the tracksuit. The tracksuit is conventional clothing, so the expense is private in nature.
If Bill was a general duties police officer, he wouldn’t be entitled to claim a deduction for his gym fees. Although he would have to maintain a standard level of fitness, his role wouldn’t involve strenuous physical activity. Bill’s expenses in these circumstances would be private.
Example: private fitness expense
Mahendra is an intelligence officer for the Royal Australian Navy. He prepares intelligence briefings and generally carries out intelligence analysis tasks. Most of this work is done at his desk.
Mahendra has a membership at a private gym and goes there 3 times a week to maintain the fitness levels required for his employment in the Navy.
Mahendra can’t claim the costs of his gym membership as it is a private expense. While Mahendra needs to keep a certain level of fitness for his employment, his duties don’t require strenuous physical activity.
Proof of your gym membership claim
The ATO requires evidence of both payment and a clear connection to your employment. In terms of payment, you’ll need receipts from the gym that include the dates or period covered by the membership as well as the amounts paid. Keeping your bank or credit card statements can also help prove payment was made.
In addition to receipts, you must be able to demonstrate exactly how your gym membership relates to fulfilling your job duties. A letter from your employer detailing any fitness requirements, standards, or tests is ideal. This could outline elements like minimum strength, endurance or other physical benchmarks expected for your role. If fitness is part of your contract or included in a salary packaging arrangement, documentation of this arrangement is also very helpful for substantiating your claim.
You may also want to maintain records of your gym attendance, programs, or personal training focused on building occupational skills. For example, a log of sessions spent improving stamina for emergency response work. While not absolutely essential, supplementary documentation like this provides stronger evidence that fees were incurred for work needs rather than personal benefit. Compiling this proof is important should the ATO choose to audit your tax return.
How you should claim your gym membership fees
Even if exercise provides health benefits, the ATO will not allow gym costs to be deducted as a medical expense. Rather, fees must be reported as a work-related deduction to demonstrate their connection to deriving your employment income.
Work-related deductions are subtracted from your total taxable income when completing your annual tax return. This lowers the amount of income that is taxed and can potentially mean a larger refund. Gym fees and other eligible expenses should be entered in the section for work-related deductions, not as a medical cost. Keeping receipts and documentation organized by category will make the return process smoother.
Work-related deductions must be claimed in the tax year they were incurred. Gym memberships are typically an annual or monthly cost, so aligning your claim with the period of use is appropriate.
Pro Tax Tip: Keep in mind that you can only claim the portion of fees that relate to your work. If you also use the gym for personal reasons you need to apportion the claim accordingly.
Being able to deduct gym membership fees can provide a valuable work-related tax deduction should you be in the minority of jobs where this expense can be claimed. With the complexity of tax laws and risk of audit, it’s generally recommended to seek professional tax advice from an accredited agent. A competent agent can help ensure your return is optimized to take full advantage of legitimate deductions. They understand how best to present evidence to support claims and avoid any mistakes that could lead to issues with the ATO down the line. For most people, the peace of mind from having an expert complete their return is worth the minimal cost of using a registered tax agent. A tax agents fees are tax deductible when you file your next years’ tax return.