Tax deductions for members of the Australian Defence Force

As a member of the Australian Defence Force (ADF), you probably incur expenses in performing your job. Knowing what you can and can’t claim can make a substantial difference to your final tax outcome. Here’s what members of the Australian Defence Force need to know when preparing to lodge a tax return:

CAR AND TRAVEL EXPENSES

If you use your car to perform duties within your role in the Australian Defence Force, you are entitled to claim a deduction for expenses associated with using your car. If you intend to claim, remember to keep a record of your car travel showing the dates, activities, places, times and duration of your travel.

If the travel relates to work, you may be able to claim it. For example, travel between bases, travel within the base, travel from the base to another location required for work as well as any travel directly between workplaces (provided neither location is your home). If you’re carrying bulky tools or equipment which is necessary for work and which can’t be securely stored at work, then you may also be able to claim the cost of home-to-work or work-to-home travel.

When it comes to claiming car and travel expenses, you can use the cents per kilometre or the logbook method. Defence force members most commonly use the cents per kilometre method (currently 68 cents per kilometre). The amount you can claim is capped at 5,000 work kilometres per car, even if you travelled more. You don’t need receipts or other written evidence to prove your claim. However, you must be able to show how you worked out your estimate by keeping a diary of work-related travel.

WHAT YOU CAN’T CLAIM

The cost of trips between home and work, even if it’s outside working hours or over a weekend.

CLOTHING, LAUNDRY AND DRY-CLEANING EXPENSES

Australian Defence Force members are often given a uniform allowance which should be included as income in your tax return. Even though you’re issued an allowance, you’re entitled to claim a deduction for the purchase, repair, maintenance and laundry of military uniforms.

The ATO considers military uniforms compulsory which means you can claim items like:

• Military white, blue or khaki shirts with rank or other embellishments
• Standard matching trousers
• Regulation jumpers and jackets
• Official mess uniform
• Hats or caps with rank or other embellishments
• Service dress shoes
• Service handbags and clutch bags
• Socks and stockings
• Camouflage shirts and trousers

Where the uniform is deemed non-compulsory, you can’t claim the cost. Conventional items of clothing and footwear link running shoes usually can’t be claimed.

WHAT YOU CAN’T CLAIM

Underwear, regular fashion shoes, hair accessories and t-shirts can’t be claimed unless they’re enforced within uniform policy or guidelines as part of a compulsory and distinctive uniform.

PROTECTIVE CLOTHING

There are strict regulations around what you can and can’t claim. However, if the clothing or footwear protects both yourself and your uniform from danger or injury, then you may claim it as protective clothing. If you work in the sun for all or part of the day, you can claim sunglasses, sunhats and sunscreens.

WHAT YOU CAN’T CLAIM

You can’t claim the costs of protective clothing which has been provided by your employer.

LAUNDRY AND MAINTENANCE

Regardless of whether you purchased the clothing or it was supplied by your employer, you’re entitled to claim expenses involved in cleaning and maintaining your uniforms. This means expenses such as the laundromat, home laundry, dry-cleaning costs and shoe maintenance expenses like shoe polish.

If your claim for laundry expenses is under $150, you don’t need written evidence but you do need to use a reasonable basis to work out your claim.

Claims over $300 require written evidence by way of receipts or written records to substantiate your claim.

WHAT YOU CAN’T CLAIM

If you’re paid a uniform maintenance allowance, you must include this in your tax return as income. While you can still deduct your expenses, you will need to provide evidence.

MESS FEES AND FUNCTIONS

You may claim a portion of compulsory mess subscriptions which relate specifically to work-related activities. Your mess committee can provide details of your mess subscriptions.

WHAT YOU CAN’T CLAIM

Expenses relating to food, drink or entertainment can’t be claimed and neither can the cost of travelling to and from mess functions.

SELF-EDUCATION EXPENSES

If your studies relate directly to your current work activities, you may claim a deduction for self-education expenses such as fees, travel, books and equipment.

Self-education expenses can’t be claimed if the course fees are covered through HECS.

WHAT YOU CAN’T CLAIM

You can’t claim if your self-education is intended to help you secure a new job outside of the Australian Defence Force. Your study needs to be directly related to your current job.

PHYSICAL TRAINING AND FITNESS EXPENSES

Members of the Australian Defence Force generally maintain a high level of physical fitness. Expenses incurred in keeping fit such as courses and gym memberships are generally considered to be private and can’t be claimed.

If you are a member of a special combat squad, you may require a level of fitness above the standard. In this case, you may be able to claim fitness expenses. However, you need to demonstrate that an extra level of fitness is crucial to your duties.

WHAT YOU CAN’T CLAIM

Even though the Australian Defence Force has specific regulations relating to personal fitness, you can’t claim personal gym memberships.

PHONE EXPENSES

If you’re required to make calls or send texts for work, you’re entitled to claim a deduction on your phone bills. If you use your phone for both private and work purposes, you can only claim the costs associated with work.

If you can’t identify which calls are work-related on your phone bill, you’ll need to calculate a reasonable estimate of your costs based on diary records kept over a four-week period.

WHAT YOU CAN’T CLAIM

If you’re given a phone allowance or pre-paid SIM card, you can only claim the costs above what you have been reimbursed for.

HOME OFFICE EXPENSES

If you work from home sometimes, you may be entitled to claim deductions on items such as computers, printers and telephones. If these items cost over $300, you can claim depreciation on these items.

Depending on how often you work from home, you can claim a percentage of running costs associated with your home office. These can be such items as work-related phone calls, internet access charges, and electricity for heating, cooling and lighting costs.

WHAT YOU CAN’T CLAIM

In most cases, you can’t claim deductions on occupancy expenses such as rent, mortgage interest, council rates and house insurance premiums.

COMPUTER EXPENSES

If you use your computer or laptop for work, you may be able to claim the cost of purchasing the computer. If the computer is used for both work and home use, you can only claim the proportion of costs relating to work-use.

If the computer or laptop cost more than $300, you can claim the decline in value as year-by-year depreciation. If the item cost less than $300, you can claim an immediate deduction for the full cost of the item. You may also be able to claim repair and maintenance costs as well as internet access.

WHAT YOU CAN’T CLAIM

If you paid for your computer and your employer reimbursed you, you’re not eligible to claim a deduction on it.

OTHER EXPENSES YOU CAN CLAIM

As a member of the Australian Defence Force, you may be entitled to claim other expenses such as:

Extra Regimental Duties (ERD)

If the ERD forms part of your income-earning activities and it’s not a domestic or private expense, you can claim a deduction for costs incurred.

Technical or Professional Publications

If you subscribe to journals or magazines that have content directly connected to your employment as an Australian Defence Force member, you can claim these costs.

Union and Professional Association Fees

If you’re a member of a union or professional association, you can claim the fees as a deduction.

Tax Agent Fees

You can claim the cost of preparing your tax return.

OTHER EXPENSES YOU CAN'T CLAIM

• Glasses and contact lenses
• Haircuts
• Meals
• Social functions
• Weight loss expenses 
• Watches and timepieces, however, if your watch has special characteristics which you use for work, you can claim a deduction for a decline in value (depreciation)