Tax time can be a tricky time for nurses and midwives, especially when figuring out what you can and cannot claim as a tax deduction. Here’s a quick guide specifically for you.
Allowances
Include all allowances shown on your income statement or payment summary as income in your tax return.
You may receive an allowance to:
- compensate you for an aspect of your work, for example, carrying out unpleasant or dangerous tasks
- help you to pay for certain expenses such as meals when you travel for work.
If your employer pays you:
- an amount based on an estimate of what you might spend, such as paying cents per kilometre if you use your car for work, then it’s an allowance
- for the actual amount of the expense (either before or after you incur the expense), such as paying for the petrol you use if you use your car for work, it’s a reimbursement.
Allowances on your income statement or payment summary
You may receive allowances:
- for work that may be unpleasant, special or dangerous
- in recognition of holding special skills, such as a first-aid certificate
- to compensate for industry peculiarities, such as for weekend or holiday shifts.
These payments don’t cover you for expenses you might incur. Include these allowances as income in your tax return.
If you receive an allowance from your employer, you aren’t always entitled to a deduction – it depends on the situation. See Deductions.
Allowances not on your income statement or payment summary
Your employer may not include some allowances on your income statement or payment summary. This can apply to travel allowances and overtime meal allowances paid under an industrial law, award or agreement. You can see these allowances on your payslips.
If the allowance isn’t on your income statement or payment summary, and you:
- spent the whole amount on deductible expenses, you
- don’t include it as income in your tax return
- can’t claim any deductions for these expenses
- spent more than your allowance, you
- include the allowance as income in your tax return
- can claim a deduction for your expense, if you’re eligible – see Deductions.
Work-related expenses
To claim a deduction for work-related expenses:
- you must have spent the money yourself and weren’t reimbursed
- it must be directly related to earning your income
- you must have a record to prove it.
You can use the ATO app myDeductions tool to keep track of your expenses and receipts throughout the year.
You can only claim the work-related part of expenses. You can’t claim a deduction for any part of the expense that relates to personal use.
Professional Expenses
You can claim a deduction for the work-related portion of the following expenses, as long as they relate to your employment:
- Union and professional association fees. This includes your membership fees to the NSW Nurses and Midwives’ Association;
- Annual practicing certificate fees;
- Calculators;
- Agency commissions and agency fees;
- Technical or professional publications, including a subscription to the Australian Nursing and Midwifery Journal.
Car expenses
You can claim a deduction when you:
- drive between separate jobs on the same day – for example, travelling from your job as a carer to a second job as a musician
- drive to and from an alternate workplace for the same employer on the same day – for example, driving from your usual clinic to another clinic to work for the same employer.
You generally can’t claim the cost of trips between home and work, even if you live a long way from your usual workplace or have to work outside normal business hours – for example, public holiday shifts.
In limited circumstances you can claim the cost of trips between home and work, where you were required to carry bulky tools or equipment for work and you met all of the following conditions:
- the tools or equipment were essential for you to perform your employment duties and you didn’t carry them merely as a matter of choice
- the tools or equipment were bulky – meaning that because of their size and weight they were awkward to transport and could only be transported conveniently by the use of a motor vehicle
- there was no secure storage for the items at the workplace.
If you claim car expenses, you need to keep a logbook to determine the work-related percentage, or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
Phone and internet expenses
You can claim phone and internet usage if your employer needs you to use your personal devices for work.
You can only claim the work-related portion of the use of your personal device.
Clothing expenses
You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job, or protective clothing, for example, non-slip nursing shoes or support stockings, that your employer requires you to wear.
You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it, and even if you only wear it for work, for example, black pants and a white shirt.
Self-education expenses
You can claim a deduction for self-education expenses if your course relates directly to your current job (e.g. a wound care course).
You cannot claim a deduction if your study is only related in a general way or is designed to help you get a new job (e.g. the cost of a Bachelor of Nursing if you are currently an enrolled nurse).
NSW Nurses and Midwives’ Association members can find free and affordable education courses here. These are all tax deductible.
Other expenses
As long as the expense relates to your employment, you can claim a deduction for the work-related portion of the cost of:
- calculators
- union and professional association fees
- agency commissions and agency fees, and annual practising certificate fees
- technical or professional publications.
Working from home
Nurses and midwives who have worked from home can claim a deduction of 80 cents for each hour worked from home for the 2021-2022 income years. This is known as the shortcut method.
If you:
- were working from home to fulfill your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- incurred additional running expenses as a result of working from home.
The shortcut method doesn’t require you to have a dedicated work area, such as a private study.
The shortcut method covers all additional deductible running expenses, including:
- electricity for lighting, cooling or heating and running electronic items used for work (for example, your computer), and gas heating expenses
- the decline in value and repair of capital items, such as home office furniture and furnishings including capital items that cost less than $300
- cleaning expenses
- your phone costs, including the decline in value of the handset
- your internet costs
- computer consumables, such as printer ink and stationery
- the decline in value of a computer, laptop or similar device.
You don’t have to incur all these expenses to use the shortcut method, but you must have incurred additional running expenses in some of these categories when working from home.
If you use this method, you can’t claim any other expenses for working from home for that period.
When you are calculating the number of hours you worked from home, you need to exclude any time you took a break from working.
You can calculate your working from home deduction using the shortcut method, with this formula:
- total number of hours worked from home from 1 July 2021 to 30 June 2022 × 80 cents (for the 2021–22 income year).
If you use the shortcut method to claim a deduction, include the amount at the other work-related expenses question in your tax return and include ‘COVID-hourly rate’ as the description.
Alternatively, you can calculate your working from home deductions using the fixed rate or actual cost methods, which you can find here.
This is a general summary only. For more information, go to ato.gov.au/occupations
Resources:
- Nurses and midwives poster – This downloadable poster provides helpful information and a summary on which expenses nurses and midwives can and cannot claim at tax time.
- Health workers Toolkit – This toolkit contains practical and tailored information and tips to help anyone in the health care industry including doctors, nurses, carers and cleaners to understand what they can and can’t claim in their tax return.