Tax Deductions for Labourers

Manual labourers are the driving force behind a range of industries including construction, agriculture, road works and more. The hard work they put in contributes directly to Australia’s essential infrastructure. And, with all the long hours, it’s not surprising that many lose track of their expenses and or just aren’t sure what labourer tax deductions they can claim.

Lost receipts or missing documentation can cost labourers hundreds of dollars in their tax refund if they’re not careful!

That’s why we’ve done the heavy lifting when it comes to getting the most out of your tax return! Read our tax deductions for Labourers guide to get everything you deserve back at tax time!

Common Tax Deductions for Labourers

If you’re a labourer, you can get valuable tax deductions with work-related expenses, including:

Clothing and protective equipment

Firstly, whether you’re working on a construction site, farm station or completing road maintenance, safety is likely a high priority. It’s almost a given that labourers will be required to wear some form of safety specific clothing and use protective equipment each day. If you do, 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
  • Masks
  • Sunscreen and sunglasses

Important Warning: Be careful to only claim items that you paid for yourself. If your employer provided you with any uniform or protective equipment (or they reimbursed you for the purchases), you can’t claim those costs on your return.

Car Expenses

Car expenses can be one of the biggest tax deductions for labourers. So be sure you know the ins and outs…

While the cost of driving from home to work is generally not allowable, there is an exception for those people who carry bulky tools with them AND they don’t have a safe place at work to store them.

If you’re a labourer who’s required to carry their own bulky tools with them, you’re likely entitled to claim your home to work car travel on your return.

If you don’t carry bulky tools you can still claim any other work-related car travel you have during your typical work day. This might be driving from one job to another on the same day, or if you ever have to use your own car to pick up supplies.

To claim car expenses, you can use one of two methods:

1. Cents per km: Up to 5,000km at the rate for the tax year applicable. Read our blog to learn more about claiming your car expenses including the current rate
2. Car Logbook: If you drive a lot for work, keep a logbook for 12 continuous weeks recording all work and personal trips. Then, you can claim a work related percentage of all car expenses on your return.

Meals, travel and accommodation

• Meal costs when working overtime (must be 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
• Work related travel and/or car expenses for traveling to pick up equipment, between locations, to meetings or training

Training tax deductions for labourers

Training costs include learning new skills, renewing operating licences and keeping up to date with health and safety training. 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 or university courses directly related to your work.
• 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

Here’s a practical example of some typical tax deductions for labourers

Aaron works as a labourer for a local construction company. Let’s take a look at some real tax deductions he could claim this year based on his job:

Uniform

Aaron 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 steel capped boots. He also purchases a high SPF sun block and UV blocking sunglasses to protect himself while working in the sun.

Aaron can claim a deduction for the cost of purchasing and laundering the shirts as they are:

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

In addition, Aaron can claim a deduction for the cost of the boots, sun block and sunglasses as they are protective items.

Car expenses

Aaron needs to carry a wide range of heavy and bulky tools to work each day. He has no safe place on site to leave his tools as he often works on a different building site each day. Aaron kept a logbook for 12 continuous weeks and worked out that 76% of his car travel was work related.

Therefore, on his tax return Aaron can claim 76% of all his car expenses for the year including fuel, services, registration, insurance and other maintenance costs.

Training

During the year Aaron completed a workplace health and safety training course which he paid for himself.

Aaron can claim:

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

Phone expenses

As part of Aaron’s job he regularly uses his phone to contact his manager regarding his work requirements, shift times and overtime arrangements when required. These calls require him to use his own mobile phone which is on a $99 per month plan.

Aaron checks his phone bill and works out that on average 50% of his phone use is work related.

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

I’m a labourer, how do I know if I can claim an expense as a tax deduction?

Here’s five easy questions you can ask about each item you want to claim. You can usually include an expense on your tax return 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. It was not part of an allowance?
5. I was not reimbursed for the cost by anyone else (and not reimbursed by a company)?

Not sure? Don’t risk it! Talk to your Etax instead. It’s our job to help you with this and ensure you’re getting the biggest possible refund while sticking within the ATO rules. Feel free to email us on [email protected] or send us a message through our Facebook page.

For most labourers, there are quite a few tax deductions you can claim, so there’s no need to take risks.