Tax deductions


28th June, 2018

Tax time: 4 claims that catch out retail workers

Every end of financial year, retail workers get busted for claiming expenses that don’t match the ATO’s rules. Want to avoid the ATO sniffing out your mistakes?

Around this time of year, retail workers start lining up their expenses to claim what deductions they can.

There’s nothing wrong with wanting to pay your fair share (and only your fair share) of tax. But with deductions it’s easy to try and “see what I can get”.

This enthusiasm can lead to mistakes, and in worse cases, the ATO’s scrutiny. That’s why it’s important to get advice for your situation from a tax professional.

Want to know what the tricky claims are?

The information contained in this article is of a general nature only and intended for Australian audiences. For advice particular to your circumstances, please see a tax professional.

1. Clothing and personal grooming

What you can’t claim

This is where some retail workers (and even bosses) can trip up – you’re not allowed to claim expenses for clothing you wear at work even if it’s clothing you’d normally wear.

And to make things a bit more complicated for those workers in clothing stores, this rule extends to clothing sold at the store you work at!

So if you’re told to wear clothing sold at the store, that doesn’t mean it’s a work expense.

You also can’t claim expenses on personal grooming or cosmetics even if the store you work at sells these items and you were told to use them.

What you can claim

If you need to wear a uniform or protective clothing at work, you can claim expenses for that clothing (mending, cleaning etc.).

Remember, you can’t claim it as an expense if your boss has reimbursed you for the cost of the clothing.

2. Meals

What you can’t claim

This one also has the potential to stir trouble for retail workers. There can be a bit of confusion around meal allowances.

The thing to keep in mind is that you can’t claim expenses for a meal eaten during a normal work day because the ATO sees it as a personal expense. There’s no difference if you get an allowance to cover the meal expense either.

What you can claim

This is where it gets interesting – you can claim the cost of a meal eaten during an overtime break.

So if you’re getting a second meal break as part of a second shift (hello Christmas retail!), you can claim it.

BUT you can only claim it if your employer paid you an overtime meal allowance as part of your award or agreement.

3. Self-education

What you can’t claim

A lot of people in retail are working to support their studies, and their eyes are on a career elsewhere. That doesn’t mean that you claim education as an expense.

Where some people get mixed up is thinking their study is related “in a general way” to their jobs.

You can’t claim education expenses where the aim of the education is to secure a job with another employer.

What you can claim

You can claim a deduction on education if that learning relates to your retail role.

For example, if you’re doing a course on customer service, you can claim a deduction on that (if your employer hasn’t reimbursed you).

4. Running a car

What you can’t claim

You generally can’t claim the cost of trips between your home and your workplace, even if you have a long, magical mystery tour to reach your workplace or if you’re driving outside normal business hours.

This includes working the late shift – there’s no excuse to claim trips between work and home.

What you can claim

You can claim expenses for your car usage if you’ve used your car to drive between stores.

You can also claim car-related expenses if you’re travelling to your second job on the same day.

The two main ways to calculate expenses relating to your car is by keeping a logbook or the cents per kilometre method.

You can read about these methods here to see which one applies to you.