Service Package: Common Tax Deductions

Common Tax Deductions

Common Tax Reductions

Tax deductions are allowable only to the extent that they are incurred in gaining or producing assessable income. However, no deduction is permitted for expenses that are capital, private, or domestic in nature.

As an employee, any item salary sacrificed through your package is generally subject to Fringe Benefits Tax (FBT), which effectively removes any financial advantage of salary sacrificing that item. AchieveCorp can only include items that are not subject to FBT (with the exception of motor vehicles) in your salary package. The two primary ways to reduce or eliminate FBT are:

The Otherwise Deductible Rule – the taxable value of the benefit is reduced by the amount you would have been entitled to claim as a personal tax deduction. Please note: this reduction applies only to the employee, not to associates or spouses.
Specific exemptions provided for certain benefits.

Please note that you cannot claim a personal tax deduction for any item you have salary packaged, and similarly, you cannot salary package an item you intend to claim personally.

The information below is a general guide and should not be relied upon as legal advice. If you have a specific question, please contact your payroll team — we are happy to assist you directly.

Be cautious about spending money solely to obtain a tax deduction. In many cases, you may spend $100 to save up to $49 in tax, still leaving you $51 out of pocket. If you genuinely wish to purchase something and there are tax savings available, that is beneficial — but the tax deduction should not be the primary motivation for the purchase.

For further details, see pre-tax deductions for how deductions can be claimed through your salary package, and package options for information on which deductions are permitted.

Category	Item	Salary Packaging	Comments
Others	Accountants' fees	Yes
Others	Appeal costs relating to tax disputes	Yes
Others	Briefcase	Yes	Fully deductible in your salary package- if primarily for use in your employment (subject to 1 item per year with substantially identical functions) - depreciable if claimed in your personal tax return
Others	Child care	No	Unless provided at employers place of work
Others	Clothing	No	Work suits are not deductible (unless they are registered/ or compulsory uniforms)
Others	Computer cables & connections	Yes
Others	Computer hardware & upgrades	No	Fully deductible if cost is less than $300 ($300 incl. GST), but depreciable if more than $300
Others	Computer software	Yes	Fully deductible in your salary package- if primarily for use in your employment (subject to 1 item per year with substantially identical functions) - depreciable if claimed in your personal tax return
Others	Credit card (personal) used for work-related purposes	Yes	Interest/credit charges relating to business use are deductible. If you use the card for business and private expenditure, the calculations to apportion the charges will be a nightmare
Others	Drivers licence	No	Deemed to be private, regardless of whether or not you package a car.
Others	Dry cleaning	No	Unless it is a registered/complulsory uniform
Others	Dues: Union, professional or business associations	Yes
Others	Electronic Organiser or similar	Yes	Fully deductible in your salary package- if primarily for use in your employment (subject to 1 item per year with substantially identical functions) - depreciable if claimed in your personal tax return
Others	Employment Interviews and Selection tests	Yes	FBTAA Section 58A only via salary package
Others	Entertainment	No	See Entertainment article
Others	FEE-HELP	No	FEE-HELP repayments are not deductible, but the course fees may be - see Self Education article
Others	Fitness expenses	No	Deemed to be a private expense
Others	Gifts & donations	Yes	registered charity, employee & clients in certain circumstances
Others	Glasses	No	Considered private
Others	HECS (Higher Education Contributions Scheme)	No	HECS payments are not tax deductible
Others	Hire Car	Yes	Only when travelling. A hire car to replace a packaged car is not deductible
Others	Home office expenses (rent etc.)	No	Not unless you are running a Personal Services Business
Others	Home office running expenses (ie. Electricity)	Limited	See Home Office Expenses
Others	Income Protection Insurance	Yes
Others	Internet Connections	Yes	Business proportion (there is no specific FBT exemption for this)

Investment Expenses	Financial Plan Preparation	No	Deemed to be a capital item
Investment Expenses	Investment Review Subscription	Yes	Provided you have investment income
Investment Expenses	Investment books & Magazines	Yes	Provided you have investment income
Investment Expenses	Share/Options Trading Courses	Yes	Provided you have investment income
Investment Expenses	Laptop	Yes	Fully deductible in your salary package- if primarily for use in your employment (subject to 1 item per year with substantially identical functions) - depreciable if claimed in your personal tax return
Investment Expenses	Legal expenses	Yes	If related to reviewing contracts etc.
Investment Expenses	Life Insurance (Death & TPD/Trauma)	No	Unless Death & TPD is purchased via superannuation (You can make extra Superannuation Contributions as a pre-tax expense)
Investment Expenses	Luggage for travel	No	Briefcase can be salary packaged - see rules for briefcase.
Investment Expenses	Meals & entertainment	No	See Sec 32-5, exemptions at Sec 32B- may be deductible if it is a travel expense/an overtime meal allowance is received
Investment Expenses	Mobile phone expenses	Yes	If primarily for employment use, fully deductible in salary package where a handset is also provided, business use only if claimed in personal tax return
Investment Expenses	Mobile phone handset	Yes	If primarily for employment use (subject to 1 item per year with substantially identical functions), fully deductible in salary package, depreciation in personal tax return per business use proportion

Motor vehicle running costs	Car wash	Yes
Motor vehicle running costs	Depreciation	Complex	In personal tax return, not via package (Not available when car is salary packaged)
Motor vehicle running costs	Improvements/extras/upgrades	No	All extras should be added to the vehicle at the time the car is leased, not afterwards. Non-business accessories subsequently added to the vehicle increase the FBT cost base and are depreciated over time (if over $300)
Motor vehicle running costs	Insurance excess	Yes
Motor vehicle running costs	Insurance premiums	Yes
Motor vehicle running costs	Interest on loan	Complex	In personal tax return, not via package (Not available when car is salary packaged)
Motor vehicle running costs	Lease costs	Yes
Motor vehicle running costs	Loan repayments	No
Motor vehicle running costs	Loss on sale of motor vehicle	No	Nor is the gain assessable - employees only, not directors
Motor vehicle running costs	Parking	Limited	Only short stay at varied sites, not your normal place of work. Also refer to travel
Motor vehicle running costs	Petrol and oil	Yes
Motor vehicle running costs	Registration	Yes
Motor vehicle running costs	Repairs & maintenance	Yes
Motor vehicle running costs	Stamp duty	No	Stamp duty is a capital expense, this should be included in the lease finance where possible
Motor vehicle running costs	Tolls	complex	Please see article on tolls
Motor vehicle running costs	Tyres	Yes
Motor vehicle running costs	Newspapers & magazines	Yes	Fully deductible in salary package. ONLY the work related portion is deductible in personal tax return - i.e. computer section is 3 pages out of 60, then 3/60 of $1.20 is deductible =)

Office Equipment	Depreciation	Yes	In personal tax return - business use %
Office Equipment	on equipment
Office Equipment	Insurance	Yes	Contents/special effects proportion attributed to business equipment only
Office Equipment	Purchase	Yes	Fully deductible if cost is less than $300 ($300 incl. GST), but depreciable if more than $300
Office Equipment	Repairs	Yes
Office Equipment	Pay TV subscriptions	No
Office Equipment	Private Health Insurance	No	But eliminates the Medicare surcharge of between 1%-1.5% of taxable income
Office Equipment	Private or domestic expenditure	No
Office Equipment	Professional Memberships	Yes
Office Equipment	Professional Subscriptions	Yes
Office Equipment	Qantas Club (Airline Lounge Memberships)	Yes	Through Salary Package, limited to business use percentage through personal tax return.
Office Equipment	Relocation expenses	Yes	Only via salary package, never in your personal tax return, see relocation
Office Equipment	Resume preparation	No
Office Equipment	Self-education expenses	Yes	Includes education fees, books, tools and equipment
Office Equipment	Stationery	Yes

Superannuation contributions	by employer	Yes	Up to age-based MDC - $30,000 - $35,000
Superannuation contributions	salary sacrificed	Yes
Superannuation contributions	for non-working spouse	No	But a rebate is available for 18% on amounts up to $3000, to be claimed in tax return. Any amount contributed counts towards the contributors contribution cap.
Superannuation contributions	Tax advice costs	Yes
Superannuation contributions	Taxi fares	Yes	Single trip only, beginning or ending at your place of work FBTAA 1986 S58(Z)
Superannuation contributions	Technical qualifications	Yes
Superannuation contributions	Tools of trade	Yes	Fully deductible in your salary package- if primarily for use in your employment (subject to 1 item per year with substantially identical functions) - depreciable if claimed in your personal tax return
Superannuation contributions	Travel Expenses	Yes	Includes all parking, taxis, travel, meals and accommodation whilst travelling
Superannuation contributions	Work clothes	No	Unless the uniform is registered. i.e having a company logo on your polo shirt is not sufficient, it needs to be registered also.