Nurses and Midwives: The Night Shift Tax Guide

Welcome, to the Podcast! Our newsletter made easy! Please note, this podcast features AI-generated voices for your hosts, Mia Taylor and Leo Baker, bringing you expert insights from owner, Ben De Rosa, at Aevum Accounting. Each week, we're here to help you confidently navigate the ins and outs of Australian tax – whether it's for your individual finances, or the complexities of your business. We'll cut through the jargon to give you strategies for compliance, smart planning, and that ultimate peace of mind. So, if you're looking to understand your obligations, maximize your financial position, or simply gain clarity on your money matters, you're in the right place. Let's get started with our review of the week! Christopher Rebeiro said "Ben provided a fantastic service for our family, he took the time to understand both of our jobs and explained to us a lot of new information relating to our tax. Ben was thorough in his review of our documentation and identified issues that I wasn’t aware of that he rectified from previous tax returns. He works extremely efficiently but he also has a very personal touch with his work and we never felt rushed throughout our meeting. This was our families first visit to Ben but we will definitely be using his services again in the future!" Thank you for the amazing feedback Christopher! We love hearing from our clients and a positive review gets our podcast started on the right foot. And we are back! Leo Baker here, and today on our series focusing on specific professions, we are talking about the true heroes of our community. They are the people running on caffeine and compassion, the absolute legends of the wards: our nurses and midwives. They really are, Leo. It’s a demanding, high-stakes career, and the last thing they need is the headache of a complicated tax return. So today, we're going to administer some financial first aid and break down the essential tax guide for nurses and midwives. Let's do it! What’s the first dose of advice? We always start with the ATO’s Three Golden Rules. They are the foundation for every single claim. First, you must have spent the money yourself and were not reimbursed. Second, the expense has to directly relate to you earning your income. And third, you must have a record, like a receipt, to prove it. Your money, for your job, with your proof. Got it. Okay, let's talk about a big one. Nurses and midwives work crazy hours. What about claiming car expenses for getting to and from the hospital at 3 AM? That’s a common point of confusion, but the ATO is very clear: you cannot claim the cost of normal trips between home and work. Wow, okay, that’s a firm no. So when *can* they claim their car expenses? You can claim when you're travelling for work during the day. This could be travelling between workplaces for the same employer, like from one clinic to another, or for different employers, like driving from your hospital shift to a second job. You can also claim the trip if you travel from home directly to an alternative workplace, like a training venue. There's also a specific rule for 'itinerant work'. This is where travel is a fundamental part of your job. Think of a community nurse who has a 'web' of workplaces and travels from patient to patient all day before going home. In that case, the travel between home and your various work sites can be deductible. Okay, so if you do a lot of eligible driving, how do you claim it? You have two choices. The first is the 'cents per kilometre' method. For the current financial year, you can claim 88 cents per work-related kilometre, for up to a maximum of 5,000 kilometres. The second is the 'logbook method'. This is more work as you need to keep a logbook, but it often results in a bigger deduction if you do a lot of driving. Let’s move on to the work wardrobe. We’re talking scrubs, sensible shoes, the whole look. Exactly. You can claim for a compulsory uniform that is distinctive to your employer. You can also claim for protective clothing, which includes items like non-slip shoes, gloves, and aprons. What about socks and shoes? They're part of the uniform, right? This is a great detail. You can claim for shoes, socks, and stockings, but only if they are an essential part of a distinctive, compulsory uniform, and the specific colour, style, and type are spelled out in your employer's strictly-enforced uniform policy. So if the policy just says "wear black shoes," that's a no. But if it says "you must wear *this specific brand and model* of black shoe," that's a yes. Very specific! What about laundry? You can claim up to $150 in laundry expenses without needing to keep written evidence. The ATO's suggested rate is $1 per load for just work clothes, or 50 cents per load if you mix in your personal clothes. So, for fifty bucks worth of washing powder a year, I could get a $150 deduction? I like those odds! Okay, what about education? You can claim self-education expenses for a course if it maintains or improves a skill required for your current job, or is likely to lead to an increase in income from your current job. One thing to note is that you cannot claim your HECS-HELP repayments. But if it's a masters degree, not commonwealth supported on a FEE-HELP loan you may be able to claim this cost. Okay, what about the tools of the trade? Stethoscopes, that sort of thing? And what about my watch? Every nurse has a watch! Let's break that down. You can claim depreciation on equipment you buy for work, like a stethoscope. Now, watches are a special case. You cannot claim the cost of an ordinary wristwatch, as that's considered a private expense. However, you *can* claim for a watch with 'special characteristics', like a stopwatch or a traditional fob watch needed for taking a patient's pulse. Aha! The classic fob watch is a go! What's the rule for claiming these tools? There's a handy threshold. If the equipment costs $300 or less, you can claim an immediate deduction for the work-related portion of the cost. If it's over $300, you claim the decline in value, or depreciation, over its effective life instead. Okay, what about working from home? A lot of admin and study happens at the kitchen table. Yes, and you can claim for it. The easiest way is using the ATO's fixed-rate method, which for the current financial year is 70 cents an hour. That rate is a bundle that covers your electricity, gas, internet, phone, and stationery costs. You can then still claim depreciation on your desk, chair, and computer separately. The crucial thing to remember with this method is that you must keep a record of *all* the hours you worked from home for the entire year – a four-week diary is not enough. That's a vital tip! Okay, let's get to the big one: salary packaging. It is a huge advantage for nurses and midwives in the public health system. It allows you to pay for certain expenses with your pre-tax salary, which reduces your taxable income. So you get a tax break on your rent *and* your weekend brunch? That is amazing. There must be a catch. There is one very important consideration. Any benefit you package creates a "Reportable Fringe Benefit Amount" on your income statement. This amount gets added back to your taxable income to calculate your repayment income for government debts. For many nurses and midwives, this can lead to a surprise increase in their compulsory HELP or HECS debt repayments. Ouch. So the benefit is massive, but it needs to be managed carefully. It really shows how important it is to get good advice. It’s the perfect example. The tax world for nurses and midwives is filled with these specific opportunities, from claiming the right watch to structuring a salary package. Getting it right can save you thousands. And helping our clients navigate this is what we do at Aevum Accounting. We specialise in understanding the unique financial landscape for healthcare professionals. We can work with you to make sure you're claiming every last deduction and help you structure your salary package in a way that truly benefits you, without any nasty surprises. It’s about getting a specialist to look after your finances, so you can focus on looking after your patients! A perfect way to wrap it up. And that brings us to the end of another episode! We hope today's discussion has provided you with valuable insights and helps you navigate your financial world with greater confidence. Before we go, a quick but important reminder: The information and strategies shared on this podcast are for general informational purposes only and do not constitute specific tax or financial advice. Everyone's situation is unique, and tax laws are complex and constantly evolving. For personalized advice tailored to your specific individual or business needs, we always recommend consulting with a qualified professional. You can connect with our team at Aevum Accounting visit our website to learn more about our services, including detailed tax guides for various occupations, and how we can support your financial journey. Thank you so much for tuning in! If you enjoyed this episode, please consider subscribing, leaving us a review, and sharing it with anyone who might benefit. Your support helps us reach more Australians. Until next time, stay savvy, stay proactive, and keep building your financial future! From all of us at Aevum Accounting, goodbye for now!