Employees can claim tax deductions for the cost of clothing, if it is
- protective in nature – including safety boots and sun protection (TR 2003/16)
- a compulsory uniform, such as a corporate uniform with the company’s logo
- a non-compulsory uniform registered by the employer. (Only designs of uniforms or wardrobes which are not protective clothing, occupation specific clothing or compulsory for an employee to wear while at work, need to be registered.) Updated Approved Occupational Clothing Guidelines come into effect from 1 October 2017.
- occupationally specific, such as the clothing worn by chefs and nurses, but (according to the tax office), not waiters.
If the clothing is allowable as a tax deduction, it follows that the cost of maintaining and cleaning that clothing will also be allowable.
The tax office generally doesn’t accept that conventional clothing is an allowable work-related expense deduction, except in very narrow circumstances. It is considered that conventional clothing is fundamentally private.
Limited circumstances examples of claims for conventional clothing are provided by the Tax Office in Ruling 97/12, and include:
- additional daily changes of formal clothing of the type rarely worn by the taxpayer for private purposes (based on the Edwards case: The personal secretary to the wife of a former Queensland Governor was able to establish that her additional clothing expenses were allowable in her particular circumstances. )
FC of T v. Edwards (1994) 49 FCR 318; 94 ATC 4255; (1994) 28 ATR 87 and see also TR 98/14
- additional clothing necessary for a role as an undercover police officer, not worn privately
Substantiation of clothing claims
Allowable claims come under the substantiation rules for work-related expenses which means that written records are not required for total claims under $300, or for laundry expenses under $150.
Laundry expenses may be estimated on the basis of $1 per wash (washed separately) or 50 cents per wash (washed with other clothes).
Fringe Benefits Tax
If the clothing is paid for, or reimbursed or supplied by an employer, provided the clothing is either registered with Ausindustry or the employee would have been entitled to a deduction if incurred directly, then no FBT is payable.
Payg Tax Withholding
A regulation made under the Taxation Administration Act 1953 provides that there is no requirement to deduct tax from a Laundry Allowance (not dry cleaning) for deductible clothing up to the threshold amount, currently $150.
- Clothing, laundry and dry-cleaning expenses
- Uniforms in your business
- Approved Occupational Clothing Guidelines to 30 Sept 2017
- Approved Occupational Clothing Guidelines from 1 October 2017
This page was last modified on 14 Aug 2017