Tax tips, are my work clothes a tax deduction, ato, small business, startups

In this Tax Tip Tuesday, we look at a question many business owners and employees ask ‘Are my work clothes a tax deduction?’

The ATO allows a tax deduction for a cost of buying and cleaning occupation specific clothing, protective clothing and uniforms that are distinct to your place of work. So what does this mean:

1. Occupation specific clothing

If your occupation requires you to wear specific clothing, that clothing is not something that you wear everyday or in a casual setting, and the public can easily recognise your occupation from your clothing, you can claim a tax deduction for that clothing.

A classic example is a chef’s outfit including the checked pants that they wear. Not something you really want to wear out of hours!

2. Protective clothing

You can claim a tax deduction for worth clothes and footwear that protect you from illness of injury from your workplace or the environment you operate in. To be considered as protective clothing, it must significantly protect you from the risks present in your workplace. Some examples of protective clothing include:

  • Safety vests, hard hats and steel capped boots worn on construction sites
  • Sun-protection clothing for outdoor workplaces
  • Non-slip shoes for nurses

While ordinary clothing may provide some protection, the ATO specially excludes a tax deduction for clothing that is required in your workplace but does not provide significant protection to you i.e. closed shoes.

3. Distinctive uniforms

You can claim a tax deduction for organisation specific clothing if the clothing has been designed and made only for that employer, it has the employers logo permanently attached and is not made available to the public.

If it is compulsory as part of your employment that you wear this uniform at work, you may also be entitled to claim items such as shoes and socks that form part of that uniform and their characteristics are specified in the employers uniform policy.

This Tax Tips Tuesday is brought to you with love by Nudge Accounting. You can read other Tax Tips here.