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 a recent 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)  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
Proposal for self-education expense claims to be capped is abandoned
On 6 November 2013 the Treasurer announced that previously announced proposals to cap self-education expense claims will not proceed.
The original proposal was that from 1 July 2015 work related self-education expenses be limited to an annual cap of $2,000 per person, exclusion from FBT to continue except where provided as part of a salary packaging arrangement.
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
- 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 rate (currently 52 cents per hour of usage) may be claimed to cover heating, cooling, lighting and the depreciation and maintenance of furniture
How to calculate self-education expenses deduction
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. However 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.
[Update 11 May 2021 Budget 2021] It was announced that the first $250 claim exclusion (the sec. 82A reduction amount) will be removed. Timing: With effect from the first income year after the date of Royal Assent of the enabling legislation. (Budget paper No.2 page 26)
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.
- ATO – Self-education expenses
- Claiming self-education expenses – specific expenses
- Depreciation more generally
- TR 98/9 Deductibility of self-education expenses incurred by an employee or a person in business
This page was last modified 2021-05-11