Self-education expenses – tax deductions for advancing your career

Posted on 23rd September 2020 by Ida Bourmann

If you have considered undertaking a course at a college, university or other recognised educational institution that could improve or maintain your work-specific skills or knowledge, related self-education expenses may be deductible.

For self-education expenses to be deductible, certain eligibility criteria must apply.

Direct Relation to Current Employment

To be eligible, the course you wish to undertake must directly relate or have a sufficient connection to your current work activities as an employee and:

  • Result in, or is likely to result in, an increase in your income in your current work activities; or
  • Improve or maintain the knowledge/skills required in your current work activities; or
  • Upgrade your qualifications for your current employment (i.e. upgrading to a Masters qualification – MBA); or
  • You are a trainee and you are undertaking a course that forms part of that traineeship.

As the course must relate to your ‘current’ employment, courses that are likely to result in gaining ‘new’ employment are excluded. Undertaking a course that is only generally related to your current employment will also be excluded (e.g. working as a casual retail assistant and undertaking a course in fashion photography).

Deductible Expenses for Eligible Courses

Expenses relating to eligible courses that may be deductible include, but are not limited to:

Tuition fees (paid personally)(Category A)
Student services and amenities fees / Student
Union Fees
(Category A)
Textbooks, printing, and stationery(Category A)
Academic, trade or professional journals(Category A)
Home office running costs(Category A)
Telephone and internet(Category A)
Computer expenses(Category varies)
Repairs and Maintenance to Self-Education Assets(Category C)
Travel Costs (between home and place of education
or between workplace and place of education)
(Category A/D)
Depreciation on assets (immediate deduction < $300)(Category B)

Please note that for the expenses to be personally deductible, they need to be personally paid. Expenses paid by employers will be deductible to the employer. Expenses will also have to be apportioned for any private use (i.e. if you use your computer 70% for private purposes and 30% for self-education purposes, only 30% of the expense will be deductible).

Ineligible Expenses

The following expenses are not deductible, regardless of whether the course you undertake is eligible:

  • Accommodation and meals associated to day-to-day living (unless living away from home to study – i.e. residential school)
  • HELP Loan repayments/ VET Student Loan repayments / SFSS Student Financial Supplement Scheme repayments
  • Home Office Occupancy expense (i.e. rent, mortgage, rates, etc.)
  • Amounts you have been reimbursed for

$250 Reduction

Expenses that come under Category A will be reduced by $250, therefore the first $250 of self-education expenses incurred for items such as textbooks and stationery will be ‘lost’ or ‘absorbed’. However, expenses that come under Category C, D or E are not reduced.

Example – Molly is an apprentice beautician studying beauty therapy at TAFE. Her textbooks, transport fares and TAFE fees total $300 (Category A). The expenses are reduced by $250 and the remaining $50 can be claimed as a self-education deduction.

If you have been considering expanding your skills and knowledge in the workplace to advance your career it would be of value to know whether expenses you have incurred relating to self-education are tax deductible. If you are unsure whether your self-education expenses are eligible or if you have any further queries, please do not hesitate to contact us on (08) 9316 7000.

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