Get a plain-English read of DEDUCTIBILITY OF EXPENDITURE

Turn the raw legal text into a practical explanation grounded in Approved Occupational Clothing Guidelines 2017.

DEDUCTIBILITY OF EXPENDITURE

In the vast majority of cases, clothing worn by an employee while at work will be of a conventional nature and expenditure on the clothing will only rarely be an allowable deduction under section 8-1 of the Act. One exception to this general rule concerns occupational clothing which is entered on the Register.
Where occupational clothing satisfies these Guidelines and is registered by an employer, the expenditure incurred by an employee in the rental, purchase or maintenance of items of clothing from the registered design will be eligible for tax deductibility under section 8-1 of the Act.
The availability of a deduction is also dependent upon how the registered occupational clothing is worn. Employees must be aware that the clothing should be worn as an entirety, or set, rather than as individual pieces. The constant wearing of occupational clothing items in conjunction with conventional clothing may lead to the conclusion that the clothing is simply a collection of ordinary conventional clothing.
The result of such a conclusion would be that tax deductions relating to the clothing would be denied. In addition, where an employer has supplied the clothing without cost or at a reduced cost to employees a Fringe Benefits Tax liability may arise for the employer.
Details regarding the substantiation requirements of the Act are available from your local Australian Taxation Office.