We all know that clothing is an essential part of
any job. Despite the fact that clothing is implicitly work-related, not all types of clothing can be deducted in an Individual Taxation Return. The ATO has very specific rules which govern if the cost and relevant expenses of work-related clothing can be deducted.
A notable example of work-related clothing which is unable to be deducted is a ‘Non-Compulsory Uniform’. If your employer allows you to choose what you wear to work, then you are unable to claim the cost as a deduction. A business suit worn by a 9 to 5 worker cannot be claimed as a deduction.
On the other hand, if your employer has a distinctive uniform you need to wear to work, you are able to claim the cost as a deduction. To be eligible the uniform must be:
Distinctive to your organisation, e.g. by displaying a company logo.
Not available to the general public.
Be enshrined in company policy that the specific clothing is to be worn at work.
For builders and workers in the construction industry, you are able to claim deductions for clothing which is specific to the building & construction industry.
In addition, you can claim deductions for clothing which protects you from illness or injury. Examples include:
Currently, you are able to claim up to $150 in laundry expenses without keeping receipts. However, the amount must be “reasonable”, which translates to $1 per load (if just deductible clothing) or $0.50 per load (if mixed with non-deductible clothing). If laundry expenses amount to over $150, you need to keep written evidence for 5 years.
To be able to claim dry-cleaning, work-related clothing expenses must be over $300, and you will need to keep written evidence for 5 years.
This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.