Everyone needs to wear clothing for work, whether that be a designated uniform or a business suit. Work clothing is a claimable tax deduction, however not all work clothing is equal in the eyes of the Australian Taxation Office (ATO). All of the little expenses you incur throughout the year does add up, and it pays to understand exactly what you can claim when it comes to your work clothing.
What Clothing Can I Claim?
You can claim the expenses for your work-related and occupation specific clothing that is protective, unique for your work or is a distinctive uniform, that is a uniform that distinctly indefinites you as an employee of a certain organisation.
The types of occupations that wear compulsory uniforms include police officers, nurses, military personnel, airline staff, housekeeper and supermarket staff. It might also be possible to claim a specific item, such as chequered pants if you are a chef, or a white coat for a doctor.
Protective Clothing
Protective clothing that you need to wear against illness or risk of injury that you need to do your job are items that can be claimed. These items must provide a sufficient degree of protection against risk and include fire resistant clothing, protection from the sun, including hats and sunglasses, high-vis vests, non-slip shoes, rubber boots, steel-capped boots, gloves, overalls, heavy-duty shirts and trousers, and smocks and aprons.
In order to determine which items of clothing are considered to be protective, it must be made to cope with rigorous conditions where conventional clothing couldn’t stand up to the task, should be designed for specifically for protection and have a density of weave which gives a UV rating sufficient to protect you from the sun if you work outdoors.
Work Uniforms
Is the uniform you wear to work really a uniform? It might be a uniform in your eyes, but the ATO has a strict code when it comes to classifying your uniform as work-related. You uniform must be unique and clearly distinctive for the organisation. That is, the uniform must be designed specifically for the employer and should not be available to the general public, such as a McDonalds uniform. A logo permanently attached to the uniform is also a clear indicator of a work-related uniform.
Under this code, a work-related uniform is one that the company you work for requires you to wear it in order to do your job, such as a nurse or air hostess. You might be able to claim the cost of shoes, socks and stockings if they are an essential part of your distinctive uniform, and the colours, style and type are specified as a part of that uniform.
Pro Tax Tip: If your employer requires you to wear a non-compulsory uniform and has registered the design with AusIndustry, you can claim the cost of the uniform and the cleaning. You will not be able to claim the cost of shoes, socks and stockings for a non-compulsory uniform.
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Written Evidence
In order to make a tax deduction claim, you must be out-of-pocket for the expense, you must have already paid for the expense and you must be able to show proof of purchase. Usually, a receipt or tax invoice will be what you need to be able to make your claim.
Do you receive an allowance from your employer for clothing, uniforms, laundry or dry-cleaning? Don’t forget to put that amount down as assessable income in your tax return. You allowance is regarded as income not an expense.
What Can’t You Claim?
It’s true that you’ll need a certain standard of work clothing in your wardrobe, but the ATO is strict about what is considered work and private clothing. In their eyes, only items of clothing that can only be worn for work purposes and be highly distinctive for your occupation can be claimed.
You may be surprised to learn that items such as a business suit are not considered a uniform as it is seen as a dress code. Black pants that you need to purchase for a hospitality job, or a white shirt you’ve had to buy for conducting music lessons.
Jeans, drill shirts, shorts, trousers, socks, closed shoes, although providing some sort of protection in your workplace, are considered to be ordinary clothing as they do not incorporate adequate protective qualities for the risks at your work.
Pro Tax Tip: You can’t claim the cost of purchasing or cleaning a plain uniform or the expense of a non-compulsory uniform.
READ: TAX DEDUCTIONS FOR FITNESS INDUSTRY WORKERS
Cleaning
Cleaning, washing, drying, dry-cleaning, ironing, although chores, can be claimed under certain rules, even if the clothing is supplied by your employer.
Pro Tax Tip: If you are reimbursed for your cleaning expenses, you won’t be able to claim the cost of cleaning your work-related clothing.
You’ll need to provide written evidence in the form of receipts if the amount of your claim is more than $150 and if the total claim of work-related expenses exceeds $300 (not including car, meal, award transport payments allowances and travel allowance expenses.) If your laundry amounts are less than $150, or if your total claim for work-related expenses is more than $300 which includes your laundry expenses, you won’t need a diary or written evidence.
Pro Tax Tip: If your total claim of your work-related expenses is more than $300, you must provide written evidence for your other work-related claims.
Washing, drying and ironing you do yourself can be claimed using the following ATO formula rates of:
- $1 per load if the load if only work-related clothing items are being laundered together, or
- 50 cents per load if other items are included in the load
If you dry-clean or need specialist cleaning for your work-related clothing, you can claim the actual expenses but you must have written evidence. It is advised that you record for a month the number of washes you do anyway for work as the ATO will ask how you arrived at your calculation. Claiming the full $150 will promote unwanted scrutiny from the ATO.
Clothing Expense FAQ
Q: My employer has told me I need to wear plain black pants and a black polo shirt for work. Can I claim those items of clothing?
A: You won’t be able to claim the cost of the items nor the laundry expense on these items, as they are not distinctive to your employer and can be worn privately. They are not considered to be a work-related uniform.
Q: My employer has told me to wear plain black pants and has supplied me with a top with the company logo. Can I claim those costs?
A: You won’t be able to claim the cost of the pants as they are everyday in nature and not sufficiently distinctive to your employer, but you can claim the laundry costs for the top.
Q: My employer has told me to purchase and wear a specific top with a logo on it, as well as black pants. What can I claim?
A: You will be able to claim the up-front purchase expense of the top as well as laundering expenses, alterations, or repairs, but not the purchase price or laundering expense of the pants.
Q: My employer has told me to purchase and wear a specific top with a logo on it and buy my pants from a specific store. What can I claim?
A: If you are required to purchase the top and the logo makes it distinctive to the organisation you work you, you can claim the purchase expense and laundry expenses. Although your employer has asked you to purchase the pants from a specific store, they are still not considered to be unique and distinctive to the organisation you work for and cannot be claimed.
Q: My employer has suggested that I purchase a non-compulsory uniform of a certain style and colour that is registered with AusIndustry, made up of a shirt with a logo and black pants. What can I claim?
A: You can claim both the purchase expense and laundering expenses for the top and pants under these circumstances.
Q: I’ve just got a job in a clothing store and my employer has told me I need to wear the latest line of clothing from the store. What can I claim?
A: Unfortunately, you can’t claim the cost of plain clothing you wear at work, even if it’s clothing sold at the store you work at and your employer requires you to wear it.
Want to maximise your tax refund? ITP Accounting Professionals can help you work out and claim all of your clothing related expenses – even things you might not even know about! Phone 1800 367 487 or book online at ww.itp.com.au today. You can lodge your tax return online, or come in to one of our many branches throughout Australia.