What Can Australian Nurses Claim On Tax Returns in 2023?
It is that time of the year… Not just winter but the not-so-exciting tax time! It’s time to get started with the paperwork, sort out your expenses list and crunch the numbers so you can get your tax return in on time.
If you are a nurse or a healthcare practitioner; when you are doing the long shift hours and looking after patients; doing extra agency nursing shifts to save a little extra, or having to do overtime hours, filing your tax return would be the last thing on your mind.
In this article, we discuss all things tax: tax returns, tax deductions, how to reduce your taxable income, and the expenses nurses and midwives can claim as a tax deduction. Keep reading to find out more.
TL;DR
The skinny on things that can be tax deductions for nurses:
- Nursing uniforms, including scrubs
- Nursing shoes
- Work clothes laundry costs
- Work clothing repair costs
- Nursing shoe repair costs
- Nursing fob watch
- Nursing diary
- Stationery
- Safety goggles and safety glasses, including prescription safety glasses, anti-glare or photochromatic glasses, sunglasses
- Safety Masks
- PPE including safety gowns and vests, lab coats and aprons
- Gloves
- Pantyhose/stockings in certain circumstances.
- Rapid Antigen Tests (RATs)
- Hand sanitiser
- AHPRA registration fees
- Union fees, Police Check, Working With Children Check Fees
- Accountant fees for preparing your tax
- Professional Association fees
- Insurances eg: Professional Indemnity Insurance, Travel Insurance for interstate conference attendance
- Training courses
- Training subscription fees
- Subscriptions for industry-specific publications
- Conferences
- Vehicle expenses such as servicing (% related to the work usage)
- Mileage
- Overtime meal expenses
- Phone and data expenses (partial – a % that is used for work purposes)
- Internet (partial – a % that is used for work purposes)
- Bank fees (partial % – for accounts that salary may be paid into) in certain circumstances
Handy Tips Nurses Should Know Before the Preparing a Tax Return
May to June is just the time to get organised with your expense list and sort through the clutter to file your tax return in a timely manner. Everything from your personal protective gear to your overtime meals can be tax-deductible expenses.
In a nutshell – your uniform, nurse’s fob watch, safety gear that you’ve purchased yourself (like those fancy but oh so cute baby blue-rimmed protective safety googles you treated yourself to), your APHRA registration fees, overtime meals, and work-related travel can be claimed. And if you are hiring an accountant, those costs can also be claimed in the following year. We have listed all the things nurses can and cannot claim below. Make the most of the info listed below and run this by your tax agent or accountant to keep tax time cruisy.
#1 – Know what expenses you can claim
Learn what expenses you can claim. Work-related expenses like certain types of travel, overtime meals, APHRA registration and training course fees come under the bracket of common tax deductions.
#2 – Keep detailed records of your expenses throughout the year
Track your work-related expenses. Include the details like the date of purchase, cost, and item you have purchased.
Save the receipts – The Australian Taxation Office (ATO) Receipts App is super handy for this. You can take a picture of your receipt, upload it and record the expense in a few clicks.
You can also save a hard copy of the receipt for your tax agent and they can guide you with what can be claimed and what cannot.
What is a Tax Deduction and How to Reduce Taxable Income
A tax deduction is a work-related expense that lowers your taxable income and reduces your tax liability.
Income – Tax Deductions = Taxable Income
For example, if your income is $80,000 and your tax deductions are $10,000 – your taxable income would be $70,000, and the government would tax you on this amount.
A common misconception about tax-deductible items is that when you claim the cost of an item as a tax deduction, you will get the full cost of that item refunded to you, but that just isn’t how tax deductions work. Accumulating tax deductions means your taxable income is reduced, and because of this, you may receive a tax refund.
Tax deductions can include your work-related expenses like travel, accommodation, overtime meals and professional association fees. The lower your taxable income, the lower the tax you owe will be.
There are several strategies you can use to reduce your tax liability:
- Keep accurate records of your work-related expenses
- Save receipts for all your work-related expenses and claim them as tax deductions
- Take advantage of benefits such as salary sacrificing or salary packaging (if your employer provides that option)
- Donate to a registered charity
- Use private health insurance to reduce your Medicare levy
- Contribute a portion of your salary to your Superannuation fund
- Pre-pay your expenses in advance to bring your deductions to the current financial year
3 Tips to Get Your Expense Claims Done Right
- The expense should be related to your income
- You should have incurred the expense (ie: your employer has not purchased it or supplied it to you). Your employer shouldn’t have reimbursed you for the costs
- You must have saved the records for the expenses – ie: keep the original receipt. A bank statement will not suffice.
Specific Deductions Nurses and Midwives can Claim
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AHPRA Annual Practising Certificate Fees
If you are renewing your APHRA registration to continue your practice as a nurse, it is an allowed deduction if you have paid it (and not your employer). However, the initial cost to register in APHRA is NOT an allowed deduction as it allowed you to start employment.
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Car expenses
Traveling between two separate workplaces can be claimed. For example, if you are using a car (personal, lease, or hire car) to transport a patient to an appointment, you can make a claim. Traveling from a usual place of work to an alternative workplace is also an allowable deduction.
However, you cannot claim travel between home and work. There are exceptions when you can claim such expenses if:
- You need to carry heavy tools or equipment for work.
- The tools or equipment can be transported using a vehicle
- The equipment is essential for your job, and you need to transport it to work.
- There are no provisions to store the equipment at work.
You cannot claim car expenses under a salary sacrifice or a lease arrangement; however, you can claim parking and toll expenses for work-related travel. Using a taxi, ride-share or public transport to commute from your usual workplace to another workplace is an allowed deduction.
Note: If you are claiming car expenses, you can use the logbook method or the cents per km method.
You can’t use the above methods if you are claiming expenses for a motorcycle, ute or a vehicle with a capacity of transporting 9 or more passengers.
For such vehicles, you can claim expenses for fuel, oil, insurance and loan interest along with the decline in value of the vehicle. Don’t forget to keep the receipts for your expenses.
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Clothing and uniform expenses
Work uniforms, scrubs, and nursing shoes with non-slip soles are other things you can claim. You can claim the costs of repairing work clothes, but you cannot claim expenses for non-work-related conventional clothing (everyday wear) and footwear.
If your uniform is specific to your occupation or it is non-compulsory and registered with AusIndustry, it is an allowed deduction.
According to the ATO, you can claim a deduction for the costs of washing, drying and ironing work clothes :
- $1 per load if it contains work clothing
- 50c per load if you mix personal items of clothing with your work clothing
Laundry claims under $150 (excluding dry-cleaning expenses) do not require any receipts. However, if you are claiming the costs of dry cleaning or uniform laundry and your annual expenses exceed $150, you will need to provide receipts.
Note: You can’t claim a deduction if your employer repairs or replaces your uniform.
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Training Courses, self-education and conferences
If you are pursuing a course to improve your skills and knowledge for your current role, or if it can lead to an increase in your income, you can claim a deduction for self-education and study expenses.
While most employers will cover the costs of mandatory training if you are a designated first aider and your role involves completing a first aid training course for emergency work situations, and you have paid for the costs of the course, you can claim a deduction for the cost of first aid training courses.
If you are attending a seminar, conference or training related to your work you are eligible for a tax deduction. Interstate travel, accommodation and meals incidental to such events are also covered under this. If you are travelling to a venue and staying overnight at a hotel, you can claim a deduction for the cost of attending the training plus incidental expenses associated with it. Once again, you can only claim these costs if you have incurred the expense directly. You can’t make a claim if your employer has covered the costs.
Please note that you may not be able to claim a deduction for training, courses or conferences undertaken to secure a promotion – you can only claim training, courses, and conferences required to do your current job. As always, if in doubt, consult your accountant.
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Magazines and professional publications
You can claim the cost of subscribing to or buying a nursing magazine, newspaper, news service or professional publication if:
The content is specific and related to your work duties. If you are using the publication for private and work purposes, you can only claim the part related to your work.
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Overtime meal expenses
According to the ATO, you can claim a deduction for the cost of a meal you buy when working overtime if all the points mentioned below apply:
- You receive an overtime meal allowance under your award, agreement or industry law
- Include your allowance in your tax return as income.
- The allowance is in your income statement as a separate allowance
ATO sets a reasonable amount, you can claim a year without receipts. If you are claiming more than the reasonable amount, you need to keep receipt of your expenses.
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Phone, Data and Internet Expenses
Claiming a deduction for phone, data and internet charges for work-related use is allowed.
If you are claiming under $50, you don’t need to keep records. If your claim is more than $50, you need to keep records identifying work-related calls and internet usage.
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Personal Protective Equipment (PPE)
Please remember – you must have purchased these items (ie: your employer did not supply them) and you must keep the receipts as evidence.
- Gloves
- Protective safety glasses, which include anti-glare or photochromatic glasses, sunglasses, safety glasses or goggles when used specifically for work purposes.
- Lab coats and aprons, in certain circumstances.
- Pantyhose/stockings, in certain circumstances.
- Protective vests, in certain circumstances.
- Rapid Antigen Tests (RATs) that you purchase and use for the purpose of testing and reporting your RAT status in order to attend a workplace
- Hand sanitiser
- Protective masks
- Stationery
If you use Your Nurse Diary, pens, or logbooks for work, you can claim them as a deduction.
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Tools and equipment, such as stethoscopes
The tools you use for your work, like a stethoscope, nurses’ fob watch, safety glasses etc are eligible for tax-deductible expenses.
If the equipment costs less than $300, you can claim the full amount in the year of purchase. But if the equipment costs you more than $300, you can claim for the decline in value.
Handy Tip: Use the ATO depreciation and capital allowance tool to help work out the deduction you can claim from a depreciating asset.
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Union Fees and Professional Association Fees
For instance, you can claim your payment for union and professional association fees, such as AHPRA registration fees, and associations such as Wounds Australia as tax deductions.
Things you can’t claim
As a general rule, you cannot claim anything unrelated to your work and personal expenses as a general rule. For example:
- Child Care
- Driver’s license
- Entertainment and Social Functions
- Fines and Penalties
- Prescription glasses and contact lenses
- Grooming – hairdressing, cosmetics, hair and skincare products
- Relocation
We hope the above information comes in handy when you file your taxes this year. Let’s move to the second part of our tax time series – 30 Things Nurses Can Claim as Tax
Thanks to our friends at Talking Health Tech for sharing our article!
References
NB: we’re not accountants or tax agents and this is not tax or financial advice – please check with your accountant or tax agent as to your specific needs.
