Jun 17, 2024

The Top Tax Deductions For Healthcare Workers

The Top Tax Deductions For Healthcare Workers

You’re entitled to claim a deduction for any expense which you incurred in earning your income. So, if you have incurred a work-related expense, and you have the paperwork to prove it, don’t hesitate to claim it. 

A good tax accountant, like those at H&R Block, will be able to tell you exactly what you can and can’t claim, minimising the chances of an audit at a later date.

Amongst the common deductions that are available to nurses and midwives are the following:

Work-related clothing

If you’re required to wear a uniform as part of your role, the cost is deductible. If your uniform is compulsory, you may be able to claim for non-slip shoes, socks, stockings or a single item like a tie if they’re an essential part of your work gear. Then there’s occupation-specific clothing; garments that aren’t every day in nature but would allow the public to easily recognise you as an aged care worker – these are all deductible. 

You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage, for example, lab coats and aprons.

Costs for work-specific protective gear like masks or gloves are also deductible.

Claim for the cost of laundering and dry-cleaning your eligible work clothes such as your required uniform.

Self-education

Claim for conference and other training expenses, like seminars, provided it directly relates to improving skills for your current job. As well as the cost of the conference or course itself, that can also include travel, meals and accommodation costs.  

Professional subscriptions

Claim for professional subscriptions, whether to a professional body like the AMA or to a trade union. The costs of renewing your annual practising certificate are deductible as are the costs of journals, periodicals and magazines that have a content considered to be aligned with nursing and healthcare.

Travel and meals 

You can’t usually claim the cost of the daily commute to and from work. The only exception to that rule is if you have to carry bulky equipment to and from work because there is no secure place of storage for them at your workplace. 

You can claim the cost of travelling between two workplaces, such as between two hospitals, medical centres or aged care facilities. In addition, the cost of transporting patients and travelling between patient’s homes is deductible. This includes public transport and taxi costs. 

If you plan to use your own car for work purposes, you can either claim a set rate of 85 cents per kilometre for all work journeys, or you can claim the actual expenses incurred. If you choose the latter, you’ll need to keep receipts for all costs (including road tolls and parking fees) and also keep a logbook of all your journeys for a 12-week period. 

If you’re required to work overtime, you can claim for the cost of buying meals provided you have been paid an allowance by your employer.

Working from home

If you spend time working from home – for instance preparing staff rosters at the weekend for the week ahead – you can claim a proportion of home running costs, either based on actual costs (in which case you’ll need receipts), or the ATO’s fixed rate of 67 cents per hour. Be warned, if you are using the 67 cents rate, this includes all your mobile phone usage (therefore, you can’t claim for mobile phones separately) and you need to have a record of all your working from home hours for the entire year (1 July 2023 to 30 June 2024) – copies of timesheets, a dairy or work rosters will do. 

Tools and equipment

You can claim a deduction for items including stethoscopes and other medical equipment, reference books and nursing fobs. If the cost is less than $300, a deduction is claimable immediately, otherwise a deduction can be claimed over the “effective life” of the assets.

Other deductions

  • Agency costs: if you get your work through an agency, the cost is claimable.
  • Mobiles or pagers if you’re on call can be claimed

What sort of details do you need to prepare your tax return?

Now is a good time to gather together all the evidence you’ll need to complete your tax return; you’ll need all the evidence of your income (payslips, dividend statements, etc) and – crucially, you’ll need all the evidence of what you’ve spent and intend to claim.

The golden rule is that you can’t make a claim unless you can prove you spent the money (and also that you weren’t reimbursed by your employer). So, make sure you keep all relevant receipts, invoices, bank statements and credit card statements. If you’re not sure if you can make a claim, keep the receipt anyway and discuss it with your tax agent.

What sort of things should people who work in multiple healthcare roles consider when completing their returns?

If you’ve got a few jobs on-going concurrently, your tax can get a little confusing. Problems can occur for two-income earners, even if the taxpayer and employers do the right thing as determined by the ATO’s PAYG tax rates. The problem arises because your first job will attract the tax-free threshold while your second job (and subsequent incomes) is taxed in line with the progressive tax rates outlined by the ATO. Things can get messy if you don’t know how to report all your income (for example, if you choose to claim the tax free threshold for both jobs!), leaving you with a large tax payable figure at the year end.

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