A Tax Guide for Engineers
This guide provides a general overview of tax deductions and other financial considerations for you as a engineers, based on information from the Australian Taxation Office (ATO) and our professional expertise.
To claim a deduction for any work-related expense, it must meet the following three conditions:
-
You must have spent the money yourself and were not reimbursed.
-
The expense must directly relate to you earning your income.
-
You must have a record, like a receipt, to prove the expense.
-
The ATO's myDeductions tool in their app is a great way to keep track of your receipts and expenses throughout the year. While we don't have direct access to this app, you can easily export your records and email them to us, or bring them to your appointment. A shared Google Drive, OneDrive, or Dropbox folder is also a great way to store your records throughout the year for easy access.
You generally cannot claim the cost of normal trips between home and work. However, you can claim travel in a car you own when you drive:
-
To and from an alternative workplace for the same employer, like travelling from your office to a job site.
-
From your home directly to an alternative workplace, such as a training course.
-
Directly between separate jobs on the same day.
In limited cases, you can claim home-to-work travel if you have shifting places of employment (no fixed workplace) or if you must carry bulky tools and equipment for your job and there is no secure storage at the workplace.
Methods for Claiming Car Expenses:
-
Cents per Kilometre Method: You can claim a set rate for each business kilometre, up to a maximum of 5,000 km per car per year. This rate covers all your running costs, including fuel, insurance, and servicing. You cannot claim those costs separately. For many engineers, this is the most straightforward method.
-
Logbook Method: This method allows you to claim the business-use percentage of all your actual car running costs, including petrol, insurance, servicing, and depreciation. You must keep a logbook for a continuous 12-week period to determine your work-related percentage.
Important: If you have a leased or salary-packaged car, you cannot claim these car expenses, as the costs are already claimed through your employer.
-
If you work from home, you can claim a deduction for your additional running expenses. The most common method is the revised fixed-rate method (cents per hour).
-
What it covers: This rate includes your internet, phone, stationery, and energy (gas and electricity) costs.
-
What you claim separately: You can still make a separate claim for the decline in value (depreciation) of work-related equipment, like computers and office furniture.
-
Records: You must keep a record of all hours worked from home and at least one bill for each type of running expense you incur.
-
You cannot claim general household items like coffee and tea, or costs related to your children's education.
-
You generally cannot claim the cost of conventional clothing, like business attire, even if required by your employer. You can claim the cost of clothing that is protective. This is clothing with special features to protect you from injury or illness at work, such as steel-capped boots, gloves, or hi-vis vests.
You can claim expenses for a course that directly relates to your current engineering role if it maintains or improves your skills, or is likely to result in an increase in your income. You cannot claim a course that is only generally related or designed to get you a new job.
You can claim the work-related portion of other expenses including:
-
Parking fees and tolls you incur when driving for work(not to work).
-
Union and professional association fees.
-
Renewal fees for licences, certificates, or permits that relate to your work.
-
Phone and internet costs, with records showing your work-related use
-
As an engineer, your salary packaging options can vary greatly depending on your employer (e.g., public sector, mining, private consulting). Common benefits that may be available include a novated car lease or making additional contributions to your superannuation from your pre-tax salary.
It is crucial to understand the specific package offered by your employer. Any packaged benefit creates a "Reportable Fringe Benefit Amount" on your income statement, which can have significant implications for your HELP (HECS) debt repayments and other government benefits.
We strongly recommend getting in contact with us to discuss your specific circumstances. We can provide tailored advice to ensure any salary package is structured effectively for you.
You can call us on (08) 6117 9219, or send us an email at reception@aevumaccounting.com.au
.png)
Contact Us
Want to get in touch? We'd love to hear from you! Whether you have a question about our services, need assistance, or just want to connect, we're here to help.