Self-education expenses which are
- associated with a course
- to gain a formally recognised qualification
- from a place of education including a school, college or university
- that are related to your work as an employee
..may be a tax deduction if the following circumstances are true:
- the course maintained or improved a skill or specific knowledge required for your work at the time; and
- you can show that the course was likely to lead to increased income from those work activities; or
- other circumstances provided a sufficient direct connection between the course and those work activities
Deductible self-education expenses must be work-related at the time incurred.
In claiming the connection with work, the timing of expenses can be significant. In an AAT case, an employee was denied deductions for the costs of an MBA course which became payable after he was made redundant. See Thomas and Commissioner of Taxation (Taxation) [2015] AATA 687 (9 September 2015)
- Deductions which might otherwise be claimable against government assistance payments such as Austudy, ABSTUDY or Youth Allowance have not been allowed since 1 July 2011
- Expenses which enable new or unrelated employment are not allowable
- Payments to the various government student loans assistance schemes are not allowable
Self-education expenses are claimable at Item D4 of the individual income tax return.
What’s included in a self-education claim
Expenses commonly qualifying for the self-education deduction include:
- tuition fees
- the cost of accommodation and meals during temporary overnight absences from home for the purpose of participating in self-education
- text books and professional or technical journals
- stationery
- student union fees
- computer expenses
- student services and amenities fees
- depreciation (decline in value) of a computer or other capital equipment (with apportionment for non-self-education use where applicable)
- travelling expenses for the trips between
- home and the place of education
- workplace and place of education
- interest on borrowings which are used to pay for deductible self-education expenses
- home study expenses – which includes the running expenses of a room set aside for self-education purposes. With appropriate substantiation, expenses associated with the study room may include:
- repairs & maintenance
- depreciation (decline in value) of furniture and equipment
- heating, cooling, lighting
- as an alternative to record keeping for the actual expenses:
- a fixed or hourly rate method may be claimed to cover certain home office expenses
- a fixed all-inclusive rate of 80 cents per hour (this method available until 30 June 2022)
How to calculate self-education expenses deduction
Note – Removal of $250 reduction amount (Section 82A): The May 2021 Budget included an announcement that the first $250 claim exclusion (the sec. 82A reduction amount) would be removed. (Budget paper No.2 page 26).
The bill was not approved before parliament was dissolved on calling of the May 2022 general election, but the measure was revived in a fresh bill brought before parliament on 3 August 2022 and approved, receiving assent on 12 December 2022.
The amendment has application for 2022-23 income tax year, and from 1 April 2023 for FBT purposes.
See Treasury Laws Amendment (2022 Measures No. 2) Bill 2022 (Schedule 3)
Self education expenses are essentially a claim for a work-related expense under Section 8.1 (General Deductions), together with specifically allowable expense claims such as repairs and depreciation.
The position until 30 June 2022 was that Section 82A operates to reduce the deductions under s8.1 by $250 (referred to as the sec. 82A reduction amount.)
Therefore any expenses which are eligible under Section 82A but not also deductible under 8.1 are used to absorb the $250, in order to maximise the remaining expense claims which are fully deductible under 8.1
- For example child care expenses are not deductible under 8.1, but can be used to absorb the $250 threshold as eligible Section 82A expenses. Any child care expenses above $250 are not deductible.
Because of this, the calculations for self-education expenses claim require the listing and precise categorisation of expenses according to their type, Sec 82A and otherwise.
Note that this $250 expenses exclusion has been removed with effect from 1 July 2022.
Further info: see Tax Office
Example calculation from 1 July 2022:
Online self education expenses calculator
For the self-education expenses online calculator provided by the Tax Office – see Tax Office online self-education expenses calculator.
More information:
- ATO – Self-education expenses
- Depreciation
- TR 98/9 Deductibility of self-education expenses incurred by an employee or a person in business (Under review following amendments to Sec 82A)
This page was last modified 2023-05-26