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 registered tax advisor(s) before making any decisions. This article was originally published in July 2019 and updated in June 2022.

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, the expense may be tax deductible.

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 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).

Working from home

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.

The ATO have working from home methods you can use to work out your deduction. The methods you can use depend on your circumstances. You must meet the record keeping requirements and working criteria to use each method.

Temporary shortcut method

The temporary shortcut method ceased from 1 July 2022. You can still use this method to calculate your working from home deduction for your 2021-22 tax return. 

The shortcut method simplifies how you calculate your deduction for working from home expenses. Using this method, you can claim 80 cents per hour for each hour you work from home. The rate is all inclusive and covers all your working from home expenses, such as phone & internet expenses, decline in value of equipment and furniture and electricity. If you use this method, you can’t claim any other expenses for working from home, even if you bought new equipment. 

Visit the ATO website for more information regarding the working from home methods.

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 that your employer registers 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, or reimburses you for clothing expenses you incur.

For more information about clothing you can claim, see Clothing, laundry and dry-cleaning expenses.

Car expenses

Car expenses incurred for normal 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 directly to a second job as a tutor. 
• from your regular workplace to an alternative workplace for the same employer on the same day – for example transporting students to a school excursion and back – and back to your regular workplace or directly home.
• from home directly to an alternative workplace – for example, travelling from home to the local swimming pool for the school swimming carnival – and then to your regular workplace or directly home.

Renewing your teaching registration

While the initial cost of obtaining your teaching registration is not tax deductible, you can claim the cost of renewing your teaching registration  if you’re working as a teacher at the time you renew and you need it to work in your employment.

General expenses

Some other expenses you might be able to claim include: union fees, professional memberships and work-related subscriptions,  books, magazines and journals. Gifts and 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. But remember, the donation must be made to a deductible gift recipient. 

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

COVID-19 tests purchased from 1 July 2021 can be claimed as tax deductions if the test was used for work-related purpose or to attend work, was a qualifying test (either RAT or PCR), you paid for the test yourself and weren’t reimbursed, and you kept a receipt.

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 tailored guide for what teachers can claim 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. The myDeductions app can help you keep track of all your records by storing them digitally on your mobile device. This app is free to download from your app store of choice.