Did you know that you can claim back the costs of a work uniform or occupation specific clothing? These are seen as tax deductible in the eyes of the ATO – meaning you could be missing out on a greater refund or paying less tax due to a lack of organisation with your tax receipts.
Think back to when you got your first job. Mine was at Toys’R’Us and required me to wear a branded T-shirt. I spent years washing, buying and repairing the thing with my hard-earned money. Had I of known about this, I would have possibly have a refund of around $1000 over the course of a couple of years.
Here is how you can claim a tax deduction for uniform expenses to avoid missing out on your entitlements.
Are you eligible for a tax deduction on work related clothing?
You are eligible for a tax deduction if the clothing you wear to work is deemed:
- A uniform
- Protective clothing
- Clothing with signage or branding of business that is occupation specific
This is great, though people can often misinterpret the above in the attempt to get a greater tax deduction. You are unable to claim a deduction on plain clothes. This means clothes such as plain black pants your employer makes you wear or business shirts and suits that are compulsory – if it isn’t a uniform (think company logo and branding or protective clothing for construction) – it isn’t deductible).
What can you claim?
You are able to claim the purchase, washing, dry-cleaning, repairing, replacement and renting of items deemed part of your uniform.
Examples might include:
- Daily washing of uniformed shirts
- Dry cleaning of company clothing
- Purchasing protective clothing to prevent injury at work
- Repairing a jumper that is specific to your work uniform
- Renting a fluro vest while working construction
How to claim uniform expenses
It is vital to keep a written record or receipt for all expenses relating to your uniform. If you pay for dry cleaning, keep the receipt. If you buy something from the staff uniform shop – request a tax invoice.
Every dollar you spend should be accounted for with written proof should you need to justify your expenses to the ATO.
You can claim $150 worth of expenses without written evidence, though to maximise your refund – opt to always keep records even up to $150.
You can also claim the cost of washing and cleaning your uniform yourself. This may mean using the washing machine and dryer to prepare clothing on a daily basis. The ATO recommends using a fair estimate of costs for judging your expenses.
For instance, $1 per load of washing you do for work relating clothing is said to be fair on the ATO site.
There is no limit to your expense claims when it comes to uniforms, though without proof – you won’t get your refund or deduction.
When submitting your tax return for uniform expenses
The ATO refers to uniform and clothing expenses in four categories. It is important to ensure you accurately state which category your uniform falls into.
The categories are:
- Protective clothing (e.g. construction worker)
- Compulsory work uniforms (e.g. McDonalds employee)
- Non-compulsary work uniform (e.g. a uniform registered with AusIndustry – ask your employer)
- Occupation specific clothing (e.g. Not plain clothes, specific to your job – e.g. a chefs hat)
Not a bad way to reduce your tax
By accurately claiming for your deductable uniform and clothing expenses, many workers have been able to lower their taxable income and produce a higher tax refund in some instances.
This is particularly helpful for people doing part time work or casual employment. If you have children or family members in such jobs – be sure they take this into account also. First time workers often overlook these deductions, in turn missing out on their entitled deductions.