Tax Deductions for Factory and Warehouse Workers

Factory or warehouse workers, including most operators, packers, store persons and process workers almost always have to pay for some work related items out of their own pockets. But in between the long hours, hard physical work and ever-increasing targets it’s amazing how many factory workers are leaving valuable tax deductions on the table (or conveyor belt) each year.

Consequently, too many factory and warehouse workers pay too much tax and miss out on hundreds of extra dollars in their pocket each year.

We’re here to help change that! Read our tax deductions for factory and warehouse workers guide to get everything you deserve back at tax time?

Common tax deductions for factory and warehouse workers

Firstly, you can get valuable tax deductions with work-related expenses, including:

Training

Training doesn’t just include learning new skills for factory and warehouse workers. Renewing operating licences and keeping up to date with health and safety training is all part of the job too. In these cases, most out of pocket training expenses are usually claimable on your tax return when they’re necessary for your current work. So whether you’ve been asked to obtain an operating license, renew an existing one or complete training, make sure you include the following expenses on your tax return:

• The fees for short courses, certificates or licences directly related to your work, including:
  • Forklift license
  • Health and safety certificates
  • Fire training
• Course related expenses including:
  • Internet
  • Phone calls
  • Travel costs
  • Accommodation and meals (if the course requires an overnight stay)
  • Tools and equipment required to undertake the course
  • Books and training manuals

Clothing and protective equipment

Factory and warehouse environments can be noisy and dusty or extremely clinical. And, with so much equipment and machinery around, it’s almost a given that a factory or warehouse worker is required to wear occupation specific clothing and use protective equipment each day. Therefore, you can usually claim the cost of the clothing and items you purchased, plus repair and maintenance expenses.

Specific items may include:

• Purchase and repair of uniforms or clothing with company logo
• Laundry and dry cleaning costs of uniforms or clothing with company logo
• Costs of protective equipment including:
  • Steel Toe Boots
  • Non slip/waterproof boots
  • Masks
  • Overalls
  • Gloves
  • Hard hats
  • Hair nets
  • Goggles
  • High-vis vests, jackets and trousers
  • Ear muffs/plugs
  • Sunscreen and sunglasses

Important Warning: Be careful to only claim for items that you paid for yourself. If your employer provides your uniform or some protective equipment, you can’t claim those costs on your return.

Meals, travel and accommodation

• Meal costs when you work overtime (paid under an award or industrial agreement.)
• Meal costs when you are working away from home (overnight trips etc.)
• Accommodation costs when working or training away from home
• Incidental costs
• Work related travel and/or car expenses for travelling to pick up equipment, between locations, to meetings or training.

Other factory and warehouse worker tax deductions

• Union and membership fees
• Work related phone calls and internet connection fees (percentage used for your work only)
• Books and magazines specifically related to your work
• Purchase, lease or repairs of tools and equipment necessary for your work.

Here’s an example of typical tax deductions for factory workers

Mike is a factory manager at the local timber factory. Let’s take a look at some real deductions he could claim this year based on his job:

Uniform:

Mike is required to wear a high vis shirt with the company’s logo embroidered onto it. As part of his uniform, he also is required to wear black pants and steel capped boots.

Therefore, Mike can claim a deduction for the cost of laundering the shirts as they are:

• Distinctive items with the employer’s logo
• Compulsory for him to wear at work

Mike can also claim a deduction for the cost of the boots as they are a protective item.

However, he can’t claim the cost of purchasing or cleaning his black pants as they are items of a conventional nature.

Training:

During the year Mike completed a forklift licence course which he paid for himself.

Mike can claim:

• The cost of the forklift licence
• Any internet, phone or travel costs associated with attending the course
• Any books or training manuals he needed to purchase.

Phone expenses

Another aspect of Mike’s job is managing his staff. That requires him to call staff in to cover shifts and contact suppliers using his own mobile phone which is on a $99 per month plan.

Mike keeps a diary for one month of the year and works out that on average 50% of his phone use is work related.

Therefore, Mike can claim 50% of his $99 per month phone bill for the year ($99 x 50% x 12mths = $594) on his tax return.

How do I know if I can claim an expense as a tax deduction?

Here are four simple questions you can ask about each item you want to claim. You’ll likely be able to claim something as a tax deduction if you answer “yes” to ALL of the questions below:

1. Is it directly related to your work or required for your work?
2. Do you have a proper receipt, invoice or bank statement to prove the purchase of the item?
3. Did you pay for it yourself?
4. I was not reimbursed for the cost by anyone else (and not reimbursed by a company)?

Not sure? Talk to your tax agent about it and be honest with them. Remember, their job is to help you with this! (Etax.com.au is a registered agent and we help thousands of factory and warehouse workers every year.)

If the ATO catches you claiming items you don’t have receipts for, or that you didn’t pay for yourself, the result can be unpleasant. You will have to pay-back any claims you weren’t entitled too (often with interest). Additionally, you could get a fine or penalty added on top or they might even investigate your tax returns from previous years as well.

For most factory and warehouse workers, there are quite a few deductions you can claim, so there’s no need to take risks and get in trouble.

Download a Tax Checklist for Factory and Warehouse Workers

To help jog your memory and collect all the right documents and details for tax time, we’ve created a helpful tax checklist that’s personalised for Factory and Warehouse Workers.

Use the Etax website to keep track of your expenses

The best way to boost your tax refund is to keep good records including your tax receipts and notes about expenses. The Etax website lets you take photos and save receipts right into your account year round. This means you’ll always know where to find those receipts.

At tax time, all of your receipts are in one place. That means it is easy to finish your tax return in July AND you’ll get to claim more tax deductions, because you won’t forget items that you paid for.

Just login to your account (or create a new one if you’ve never used us before) and scroll to the bottom where you can hit the “add deductions” button to upload receipts ready for your next tax return.