Tax Deductions on Self-Education Expenses: All about What You Can Claim and What you Can’t

Self-education expenses are technically defined as the costs of education related to improving skills for your current employment. They can include books, supplies, equipment, and tuition fees for courses that enhance your actual work performance. In some circumstances, self-education expenses may also be deductible if they lead to a new job or business you decide to start-up in the future.

Deductions You Can Claim

According to the Australian Taxation Office (ATO), you can claim self-education expenses if their purpose is directly related to your current employment. Some examples of allowable deductions include:

Course or tuition fees, books, and stationery 

You can claim a deduction for the cost of purchasing and maintaining reference materials and textbooks needed for study in your field.

Equipment, supplies, and tools 

You can claim a deduction for the costs of equipment, tools, and other materials needed to do your job. This includes protective clothing, laboratory coats, safety glasses, uniforms, boots, or shoes with steel-tipped soles used in construction work.

Self-education courses that are accepted by your employer 

If you’ve completed a self-improvement course with the help of your employer, you may be able to claim a deduction. You would need to have taken courses that are related to your current line of work and have been accepted by employees in similar positions at your workplace. 

Self-education expenses if they lead to a new job or business

If your self-education relates to a course that will be used to secure a new job or a career change then that is not allowed to be claimed. Hence if you do a course and get a job as a result of the course then you cannot claim it as an expense. You can only claim it if you did the course while in the same job to enhance skills at the same job and not to secure a new job or a new career path.

Deductions That Cannot Be Claimed 

While self-education expenses can help you earn a good salary and progress in your current job, it doesn’t mean that absolutely everything is deductible. Here are some other costs you should take note of:

  • The cost of attending sports events or other recreational activities (unless they’re compulsory as part of a course)
  • If your employer paid for your self-education courses, you cannot claim the expenses as a deduction.
  • The cost of purchasing tools or equipment used for studies, unless it is required for your current job
  • Self-education expenses through an online course are not deductible if it’s not related to your degree or diploma qualification. 

Deductions for Workshops and Seminars

You can also claim a deduction for the cost of attending workshops and seminars related to your line of work, but only if the following requirements are met:

  • The workshop or seminar is directly related to your current employment. This includes training courses that help improve your skills relevant to your existing job.
  • If you decide to change careers and your future employer offers to reimburse you for your educational costs, you can claim it as a tax deduction when filing your tax return.
  • The workshop or seminar is not part of a degree course and does not form part of the content of the degree course. 

At Accurate Business & Accounting Services, we are glad to help you with all your tax issues including the self-education expenses. Please reach out to our tax experts for more information.