Tax tips for teachers

Tax time is here again. Ask any teacher, and they will tell you that plenty of teaching-related expenses throughout the year come out of their own pockets. But which of those costs are tax deductible?

Information contained in this article is of a general nature only and should not be construed as providing tax, legal, financial or accounting advice on any of the topics discussed. Please consult with your financial and/or tax advisor(s) before making any decisions.

To help determine what you can and can’t claim as a teacher, we’ve spoken to the Australian Taxation Office (ATO) about what those working in the education sector can claim versus what is considered a private expense.

There are three things that you need to consider when claiming a work-related expense:

1. Have you spent the money yourself and weren't reimbursed?
2. Is the expense directly related to earning your income?
3. Do you have a record to prove the expense (usually a receipt)?

If you answer “yes” to all these questions, it is likely that the expense is a deductible work-related expense.

Keep in mind that if the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.

If you work in the education sector, here are some of the expenses you may be able to claim:

Teaching aids

Whether it’s handouts for students, videos and audio tapes to support your lesson plans, musical instruments or sports equipment, the cost of paying for teaching supplies can add up. The good news is that purchases related directly to your job are generally deductible, if they are used for your work as a teacher.

However, you can’t claim a deduction for the cost of items you have supplied to students for their own personal use, gifts purchased for students or meeting students’ personal expenses (for example, paying for the lunch of your students).

Home office

As we all know, teachers spend a great amount of time working from home, marking exams and designing lesson plans. If you spend time working from home, you may be able to claim a deduction for the additional running costs that you incur. .For example, if you work in your lounge room when others are also present, you can't claim the cost of lighting and heating or cooling. This is because there is no additional cost for those expenses as a result of working from home.

There are several methods you can use to work out your home office expenses. The methods you can use depend on your circumstances. You must meet the record keeping requirements and working criteria to use each method.

The ATO’s website has a great case study which compares the three methods and highlights the differing record keeping requirements. 

Clothing and laundry

With a few exceptions, clothing is a private expense. Conventional clothing (including footwear) can’t be deducted as a work-related expense, even if your employer requires you to wear it and you only wear these items of clothing at work. For example, while a physical education teacher may wear sports clothes such as tracksuits, shorts and aerobic shoes to work, these items are not deductible. 

You can claim a deduction for costs you incur to buy, hire, repair or replace clothing, uniforms and footwear you wear at work if it’s:

• protective clothing you wear to protect yourself from specific risks of injury or illness at work. For example, protective eyewear, gloves and hard hats worn by a design and technology teacher.
• a compulsory uniform which must be sufficiently distinctive to your particular organisation so that a casual observer can clearly identify you as working for a particular employer, or identify the products or services provided by your employer. To be considered compulsory, you must be expressly required to wear it by a workplace agreement or policy, which is strictly and consistently enforced
• a non-compulsory uniform you wear to work that is listed on the Register of Approved Occupational Clothing with AusIndustry (check with your employer if you’re not sure).

You can't claim a deduction if your employer buys, repairs or replaces your clothing.

Car expenses

Trips between home and work aren’t deductible, even if you live a long way from your usual workplace or have to work outside normal business hours (for example, weekend or early morning shifts). These are a private expense. 

You can claim a deduction for the cost of using a car you own, lease or hire (under a hire-purchase arrangement) when you drive:

• between separate jobs on the same day – for example travelling from your job as a primary school teacher to a second job as a tutor. 
• to and from an alternate workplace for the same employer on the same day – for example transporting students to school excursions.

Renewing your registration

While the initial cost of obtaining your teaching registration is not tax deductible, you can claim the cost of renewing it.

General expenses

Some other expenses you might be able to claim include: union fees, professional memberships and subscriptions, and work-related books, magazines and journals. Donations to registered charities may also be able to be claimed, as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items.

You might also be able to claim bank fees charged on investment accounts, as well the cost of income protection insurance and any fees paid to your tax agent for preparing your annual return.

When it comes to preparing your tax return, it pays to know what items are tax deductible. To help ease the stress of tax time, have a chat with your tax agent or visit the ATO’s website if you need more clarity around what is deductible. Always keep a thorough record of your paperwork to help make submitting your tax return a seamless process.

This article was originally published in July 2019 and updated in April 2021.