Tax deductions for factory workers
In a factory, a lot of the tax rules come down to who paid for your gear. Steel-capped boots, safety glasses and ear plugs you buy yourself can be claimed. The same gear supplied by your employer cannot, and neither can the jeans and t-shirts you wear on shift.
This page sets out what you can and cannot claim as a production line worker, apprentice machinist, supervisor, factory or production manager, or other factory employee in Australia, checked against the ATO's own occupation guide. Where a rule has a catch in it, we have said so rather than left it out. It is written for employees. If you work on your own ABN or run a manufacturing business, a business consultation is the better place to start.
Aevum Accounting is a CPA practice and registered tax agent in Balcatta, Perth, working with factory workers across Australia.
Approved by Ben De Rosa, CPA. Last checked against the ATO's guidance on 26 September 2026.
What factory workers can claim
Before any specific deduction, an expense has to clear all three of these. The ATO calls them the three golden rules.
1. You spent the money yourself and were not reimbursed. If your employer paid for it or paid you back, it is not your deduction.
2. The expense directly relates to earning your income. Not helpful to your career in general. Directly related to the job you are doing now.
3. You have a record to prove it. Usually a receipt.
If an expense was part work and part private, you can only claim the work-related portion. And you cannot claim at all if you have no records, or if someone else paid.
The short version, before the detail. These are the claims worth checking every year.
Usually deductible
Steel-capped boots, gloves and other protective clothing you buy yourself.
A compulsory uniform with your employer's logo, if you paid for it.
Washing, dry-cleaning and repairing claimable clothing.
Safety glasses, ear plugs, helmets and breathing masks you pay for.
Tools you buy for work, and repairing and insuring them.
Renewing your forklift licence while you are working.
The extra cost of a special licence or licence condition your duties need, such as a heavy vehicle permit.
A first aid course, if you are the designated first aid person.
Overtime meals, but only with an overtime meal allowance under an award or agreement.
Driving between two jobs on the same day, or to another workplace for your employer.
Parking, tolls and taxis on work trips, unless your employer pays you back.
Study that directly relates to your current job, such as textbooks for your apprenticeship.
The work share of your phone, data and internet.
Union fees.
Not deductible, however it feels
Jeans, t-shirts, plain black pants and closed shoes, even if your employer requires them.
Boots, safety glasses or other gear your employer supplies or pays you back for.
The drive from home to the factory, even carrying your boots and hand tools.
Food and drink on a normal shift, even with a meal allowance.
A meal you buy on the way home after your overtime ends.
Your first forklift licence, or any other licence, if you need it to get the job.
Your drivers licence, even if the job requires one.
A cold places allowance. It is income, with nothing to claim against it.
Prescription glasses and contact lenses.
Flu shots and other vaccinations, even if you must have them for work.
An English language course, even if your employer encourages it.
Music streaming, audiobooks and podcasts, even to stay motivated at work.
Fines, including a speeding fine on a work trip.
Each of these is explained properly below.
From the 2026-27 income year, if you are an Australian resident earning a salary or wage, you get a standard deduction of up to $1,000 for work-related expenses. The ATO applies it automatically and you do not need receipts for it. It became law in June 2026 and starts with the 2026-27 return, which you lodge from July 2027. It does not apply to the 2025-26 return you are lodging now.
It is not a bonus on top of your normal claims. Any work-related expenses you claim reduce it dollar for dollar. Claim $600 of expenses and your standard deduction drops to $400, so you land on $1,000 either way, with more paperwork. If your work expenses are more than $1,000, you claim them the way you do now, and you need records for every dollar you claim, not just the part above $1,000. For most expenses, that means written evidence such as receipts.
Union fees and professional association memberships sit outside it. You can claim those on top of the full $1,000, as long as you keep the records. The same goes for deductions that are not work expenses, such as donations to charity, income protection premiums and your tax agent's fee.
For factory workers, it depends on who supplies your gear. If your employer provides your boots, uniform and protective items and you mostly claim laundry, your work expenses may sit well under $1,000. Buying your own boots, tools or a course can take you past it. Keep your receipts until you know which side of the line you are on.
Every allowance on your income statement goes in your tax return as income, but an allowance does not give you a deduction by itself. With an allowance for expenses, such as a motor vehicle allowance, or for special skills, such as a first aid certificate, you can claim deductible expenses you actually pay. An allowance for the conditions of the job, such as a cleaner, greaser or oiler allowance, has nothing to claim against it.
In the ATO's examples, Mario works in a section of a fruit and vegetable snap-freezing factory that must be kept below 0 degrees Celsius, and is paid a cold places allowance of 66 cents an hour. He declares it, but cannot claim a deduction, because he has not spent any money. Doris gets 5 overtime meal allowances of $15.24 under an award, $76.20 in total, and usually spends $20 on a meal at the onsite cafeteria, so she declares $76.20 and claims $100.
An allowance that shows only on your payslips, such as an overtime meal or travel allowance, does not need declaring if you spend all of it on deductible expenses and do not claim them. The allowance must also be within the ATO's reasonable amount.
If your employer pays you back the exact amount you spent, that is a reimbursement. You do not declare it and you cannot claim the expense. In the ATO's example, Beth, who works in a factory making items that require certain chemicals, is paid back the $50 she spends on protective eyewear, so she has nothing to declare and nothing to claim.
Conventional clothing is private, even if your employer requires it and you only wear it at work. The ATO's own example is the jeans and t-shirts worn by factory workers. Drill shirts, shorts, trousers, socks and closed shoes are not protective clothing either.
You can claim what you pay to buy, hire, repair or replace protective clothing, which protects you from specific risks of injury or illness at work, such as steel-capped boots, gloves, fire-resistant clothing or boiler suits. The same goes for a compulsory uniform your employer strictly and consistently enforces that distinctly identifies you as working for them, and a non-compulsory uniform your employer has registered on the Register of Approved Occupational Clothing. Clothing your employer buys, repairs or replaces is not claimable.
In the ATO's examples, Mike can claim the shirts with his employer's logo that he must buy, but not the plain black pants and shoes that go with them. Renee cannot claim the waterproof jacket, pants and gum boots she wears to wash equipment with a high-pressure hose, because her employer provides them.
Washing claimable clothing can be worked out at $1 a load for work clothing only, or 50 cents a load if you mix in personal items. Dry cleaning and repairs are claimed at actual cost. In the ATO's example, Che washes her compulsory uniforms 3 times a week in mixed loads for the 50 weeks she works, and claims $75.
Protective items you wear to protect you from a real and likely risk of injury or illness at work are deductible, such as safety glasses, helmets and breathing masks. So is repairing, replacing or cleaning them, unless your employer supplies them or pays you back.
In the ATO's example, Wiremu works in a food manufacturing factory, where he must wear safety glasses and ear plugs to protect him from eye injury and hearing damage. He buys both, and can claim them.
Prescription glasses and contact lenses are private, even if you need them to work. Protective glasses, such as safety glasses, goggles or anti-glare glasses, are claimable for their work use on the same basis.
You can claim tools you use to do your job, such as an air compressor, drill or hammer, and insuring and repairing them, for the work share. Tools your employer or someone else supplies are not claimable.
An item costing $300 or less can be claimed in the year you buy it, if you use it mainly for work and it is not part of a set, or one of several identical or substantially identical items, costing more than $300 together. Above that, you claim its decline in value over its effective life.
In the ATO's example, Stanley, who works in a wood processing factory, buys a $650 electric saw on 1 October 2025 and uses it for work 5 days a week and for home renovations on the other 2. Its decline in value over a 5-year effective life, for the 273 days he held it, times his work share of 5 days in 7, gives him a claim of $69.45 for 2025-26.
You cannot claim the cost of getting your first licence, regulatory permit, card or certificate to get a job. The ATO's own example is a forklift licence: if you need one to get your job, you cannot claim getting it, but you can claim renewing it while you are working. You can also claim the additional cost to get or renew one you need to keep doing your work. If you are not sure which side of the line a cost falls, talk to us before you claim it.
Your drivers licence is private, to get or to renew, even if the job requires it. The additional cost of a special licence or licence condition your work duties need, such as a heavy vehicle permit, can be claimed, but not one you get in order to get a job.
A first aid course is deductible if you are a designated first aid person and need it to help in emergency situations at work, unless your employer pays for it or pays you back. Flu shots and other vaccinations are private, even if you must have them for work.
Food, drink and snacks during your normal working hours are private, even if you receive a meal allowance. In the ATO's example, Sylvie works a 4:30 am to 1:30 pm shift at a pharmaceutical manufacturing facility. She cannot claim the breakfast and coffee she buys on her meal break.
Overtime meals are deductible only if you buy and eat the meal while working overtime, you receive a separate overtime meal allowance under an industrial law, award or agreement, not one folded into your salary and wages, and you declare it as income, even if it shows only on your payslips. A meal your employer provides, or one you buy on the way home after your overtime ends, does not count.
The ATO's reasonable amount for an overtime meal is $38.65 for 2025-26 and $40 for 2026-27. If your claim is no more than that, you do not need receipts, but you must still be able to show what you spent and how you worked it out.
In the ATO's example, Moana works 3 hours of overtime after an 8-hour shift and gets a $20 meal allowance under her enterprise bargaining agreement. She buys and eats a $40 meal while working overtime, so she can claim $40. That is over the $38.65 reasonable amount for 2025-26, so she needs written evidence. She photographs her receipt with the myDeductions tool in the ATO app.
The trip between home and your regular workplace is private, even if you live a long way away or work weekend or early morning shifts. In the ATO's example, Geoffrey drives to the factory each day with the steel-capped boots he must wear and some hand tools. They are not bulky, so his trips are private. The exception is carrying tools or equipment that are essential to your duties and bulky, when there is no secure storage for them at work and you do not carry them just by choice.
You can claim driving directly between two separate jobs on the same day, as long as neither is your home, between workplaces for the same employer, and from home straight to an alternative workplace. In the ATO's examples, Mick can claim driving straight from the bed factory where he works to his part-time bar job. David can claim driving from the factory to his employer's head office for a monthly meeting, and from there home.
Cents per kilometre. 88 cents per kilometre for 2024-25 and 2025-26, and 91 cents for 2026-27, capped at 5,000 work kilometres per car per year. You still need a record of how you worked out the kilometres. The alternative is a 12-week logbook and your actual costs.
If your car is salary packaged under a novated lease, you cannot claim its running costs, because it is usually your employer that leases the car and makes it available to you. You can still claim work-related parking and tolls you pay yourself.
Parking at or near your regular workplace, and tolls between home and work, are private. Parking, tolls and taxis on work trips are deductible, unless your employer pays you back. Fines never are. In the ATO's example, Chris, a supervisor, cannot claim the speeding fine he gets driving from the factory to the warehouse to pick up parts.
Self-education is deductible if it directly relates to your current job and either maintains or improves the skills and knowledge you need for your current duties, or is likely to increase your income from that job. Study that only relates to your job in a general way, or helps you get a different job, is not. HECS-HELP fees and study loan repayments, including an Australian Apprenticeship Support Loan, are not deductible.
In the ATO's examples, Frank, an apprentice metal machinist, goes to technical college 2 consecutive days each fortnight. His employer pays his course fees, so he cannot claim those, but he can claim his public transport to and from college and his textbooks, because the course improves the skills he needs for his current duties and will increase his pay. Paolo, a production line worker, cannot claim an English language course his employer encourages, because it does not relate to his current income-earning activities.
Seminars, conferences and training courses that relate to your work are deductible, including registration, fares and, if you have to stay overnight, accommodation and meals, unless your employer pays. In the ATO's example, Ethan, a production manager at a solar panel factory, can claim the accommodation and meals he pays for on a 5-day course in Sweden, because his sole purpose is the course. His employer pays the training and flights. If you add a holiday, you can only claim the work-related part.
If you get a travel allowance and claim your travel costs, you declare the allowance and claim what you actually spend. From 2026-27, travel allowance expenses you claim count against the $1,000 standard deduction, and the reasonable amount exception still applies.
Phone, data and internet costs are deductible for the work-related use of your own phone or devices. In the ATO's example, Daniel, a factory manager on a $49 a month plan, finds from his itemised bill that 30 of his 300 calls over 4 weeks, or 10%, are for work, and claims $51.94 for the 10.6 months he worked. Keep your bills and a record of how you worked out your work use. A phone your employer provides and pays for is not claimable.
Union fees are deductible, and if they are on your income statement, that is your evidence. Music streaming, audiobooks and podcasts are private, even if they keep you motivated at work.
For the 2025-26 return you are lodging now: receipts for everything you claim, your income statement and payslips, which show your allowances, kilometre records or a logbook for car claims, and a record of how you worked out the work use of your tools, phone and internet. Two shortcuts still apply this year. If your total work-related expenses, other than car, travel allowance and overtime meal allowance claims, are $300 or less, you can claim them without receipts. If your laundry claim, not counting dry cleaning, is $150 or less, you do not need written evidence of it. In both cases you still have to be able to show that you spent the money and how you worked out the figure.
From 2026-27, those shortcuts end for everyone. If you claim more than the standard deduction, you need written evidence, such as receipts, for your work-related expenses. Some exceptions continue, including travel allowance and overtime meal allowance claims within the ATO's reasonable amounts, and car claims at cents per kilometre. For those, you still need records that show how you worked out the claim. For laundry worked out at the ATO's per-load rates, its current guidance is to keep a record of how many loads you washed, whether each was a work-only or mixed load, and evidence that you paid for the laundry.
The ATO's myDeductions tool in their app is a reasonable way to keep records through the year. We cannot access it directly, but you can export from it and send it to us. A shared Drive, OneDrive or Dropbox folder works just as well.
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Can I claim my steel-capped boots?
Yes, if you buy them yourself. Steel-capped boots are protective clothing, so you can claim buying, repairing or replacing them, unless your employer supplies them or pays you back. Everyday closed shoes, jeans and t-shirts are private, even if you only wear them at work.
Can I claim my forklift licence?
Not the first one, if you need it to get your job. The ATO uses the forklift licence as its own example: you cannot claim getting it, but you can claim renewing it during the period you are working. Your ordinary drivers licence is private, even the renewal.
Can I claim the drive to the factory?
Usually not. The trip between home and your regular workplace is private, even with early starts or a long drive, and even if you carry your boots and hand tools. You can claim driving between two jobs on the same day, and from the factory to another workplace for your employer, such as its head office.
Can I claim meals on my shift?
Not on a normal shift, even with a meal allowance. Overtime meals are the exception, if you buy and eat the meal while working overtime and get an overtime meal allowance under an award or agreement, which you declare as income. A meal bought on the way home after your overtime ends does not count.
How does the $1,000 standard deduction work for factory workers?
From the 2026-27 return, you get up to $1,000 automatically, with no receipts needed. Any work expenses you claim reduce it, including the decline in value of your tools, so it helps most when your work expenses are under $1,000. If they are over, claim them as normal and keep records for every dollar. Your union fees go on top either way.
Do you work with factory workers outside Perth?
Yes. We are based in Balcatta and we work with clients across Australia, by email or online appointment. See our pricing page for how the two options differ, or book an appointment.
There is no episode of the Aevum Accounting Podcast just for factory workers, but two are relevant to you. The Thousand Dollar Deduction (episode 54) explains the new standard deduction, and its written companion is The $1,000 Instant Tax Deduction: What It's Actually Worth. Your Tax Return, Your Way: Email or Appointment (episode 51) helps you choose how to lodge with us, and its companion is Email or Appointment.
We are a CPA practice and registered tax agent, TPB registration 26302591. You can check our credentials, meet the team, or book an appointment.
Also worth reading: tax accountants Perth for how we work with individuals, and our guides for tradies, FIFO and mining workers and farm workers.