Tax Deductions on Training Courses for Employees

Employees in Australia may be able to deduct the cost of some training courses from their taxable income. This includes courses that are related to the employee’s current work or a future career change. 

In order to qualify for the deduction, the employee must have paid for the course themselves, and it must be related to their work. There is no set limit on how much an employee can deduct, but the total amount cannot be more than the amount of income that was earned from the course.

There are a few other conditions that must be met in order for an employee to claim a deduction. The course must be held at a recognised educational institution, and it must be related to the employee’s current work or a future career change. The employee must also be able to provide evidence that the course was taken in order to improve their skillset.

If an employee meets all of the above conditions, they can claim a deduction for the cost of the course on their tax return. This will reduce their taxable income, and may result in a tax refund.

The ATO has strict guidelines for claiming deductions on training courses. Employees do not automatically qualify for the deduction, even if they meet the above conditions.

Employees who are planning to take a course should contact the ATO for more information about eligibility and what evidence is required. This includes information regarding which employees are allowed to claim their own expenses on a tax return.

FBT Limitations on Employee Course Deductions

There are also limitations on the amount of expenses that can be claimed as a deduction for fringe benefits tax (FBT). There is a limit that has been set on the maximum amount you can claim. This limit applies to all training courses, not just those that are related to the employee’s current work or a future career change. 

If the training is more than six months long, then there isn’t an FBT deduction limit. This means you can claim whatever amount you spend on it without worrying about the FBT deduction limit.

If the training course is six months or less, then you can only claim on your FBT return. This also applies to courses that are related to their current work or a future career change. 

Applicable Courses

The ATO has set guidelines for what types of training can be claimed as a deduction. The course must be directly related to the employee’s current work or a future career change. 

The following courses are examples of those that can be claimed:

– Accounting courses

– First Aid courses

– Language courses

– Computer courses

– Driving courses

– Safety courses 

Please note that this is not an exhaustive list and that there may be other courses that can qualify for a deduction.

Employees should contact the ATO if they are unsure whether their course qualifies as a deduction. They can provide further clarification about which training is eligible for a deduction, and what type of evidence is required to claim it on your tax return.

Get Professional Assistance for Your Tax Deductions

If you’re not sure how to claim a deduction for your training course, don’t worry. You can get professional assistance from Accurate Business & Accounting Services accountants and tax specialists. We will be able to help you understand the ATO’s guidelines and make sure you claim all the deductions that you’re entitled to.

We can also help you with any other tax issues that you might be struggling with, including lodgements and annual returns. For more information contact us today!