27th June, 2018

Tax time: 4 claims hospitality workers get caught on

Every single end of financial year sees hospitality workers get caught for claiming expenses that fall outside the rules. Want to avoid the ATO’s eagle eye?

As we barrel headlong into the end of financial year period, workers start lining up what they can possibly claim to pay as little tax as possible.

There’s nothing wrong with wanting to pay your fair share of tax (and only your fair share).

But common mistakes pop up for hospitality workers in their eagerness to claim deductions.  – which is why it’s important that you get advice particular to your situation from a tax professional.

Want to know what they 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. Car expenses

The danger area

Some people in the hospitality sector try to claim trips from their home to their job. Generally speaking, that’s not on.

The ATO says it doesn’t matter if you live a long way from your workplace. Going into work outside normal business hours (such as night shifts or public holidays) doesn’t count either.

There’s some ground rules for work trips you can claim.

What you can claim

If you’re travelling between separate jobs on the same day, that’s okay to claim. So, if you finish the brunch shift at one restaurant and then have a job on at another restaurant that afternoon, that’s a tax claim.

Deductions include car expenses for trips between your employers’ restaurant and a separate workplace, such as a function centre, that day – if your employer is catering there as well.

There are a few circumstances where trips between home and work can be claimed if you’re using your car to transport bulky work equipment (think bain-marie rather than a box of serviettes).

General tips

If you claim car expenses, keep a logbook to calculate the work-related part of your work travel.

That’s right – you can’t just ballpark it at 20 percent of your overall travel and hope the ATO won’t ask questions.

But, they’ll accept a reasonable calculation if you use the cents per kilometre calculation.

2. Clothing and grooming

The danger area

This catches a few hospitality workers out. Drawing a line between their street clothes worn at work and their professional outfits is a murky area.

Here’s the thing: you can’t claim a deduction for the cost of cleaning your street clothes, even if your employer tells you to wear them.

So if you’re required to wear black pants and a shirt for work – despite not wearing this garb outside work – you can’t claim cleaning expenses.

You also can’t claim expenses for personal grooming. That well-groomed beard or snazzy hairstyle are maintained at your personal expense.

What you can claim

What the ATO will allow is cleaning expenses related to occupation-specific clothes, such as chefs hats or chequered pants.

This also extends to protective gear such as aprons.

3. Self-education

The danger area

A lot of hospitality industry workers are studying to move to another role in hospitality or complete specific training for their role.

Where workers can get tripped up is claiming expenses for study to get another job – even if it’s in the same business.

For example, if you’re wait staff and your dream is to be a chef, you can’t claim the expenses related to that study.

What you can claim

You can claim self-education expenses if that education specifically relates to your current job.

For example, if you need barista training to become a barista and you’re forking out for the training yourself, you can claim that.

General tips

Remember: you can’t claim training expenses if your employer has already paid it (or reimbursed you).

No double-dipping allowed, sadly.

4. Tools and equipment expenses

The danger area

You can’t claim on equipment that is paid for by your employer, or on equipment repairs if you’ve been reimbursed for it.

Another area people get caught out is claiming a deduction on personal use of equipment that they’ve purchased.

What you can claim

If you’ve purchased the equipment yourself, you can claim repairs relating to its work-related use, not personal use.

You can also claim a capital deduction for the equipment in a couple of ways:

  • If it’s less than $300 in value, you can claim a deduction upfront on the whole thing.
  • If it’s more than $300 in value, you’ll need to claim it over a few years (to allow for depreciation).

General tips

Remember, it’s vital to have a record to prove you’ve bought the equipment being claimed.

If you can’t prove it, you can’t claim it.