You’ll find below some explanations and examples of what you can claim in regards to compulsory, and non compulsory work uniforms. This is to be used as a general guide only, and any particular information should be checked directly with the ATO website.
A compulsory uniform is a set of clothing that is worn to identify you as an employee of an organisation. This organisation has a policy that makes it compulsory for you to wear the uniform while at work allowing you to claim a deduction for the cost of buying, renting, repairing and cleaning a compulsory uniform.
To be an allowable deduction, your employer must have a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
Your employer’s compulsory work uniform policy rules should specify the characteristics of the colour, style and type of clothing and accessories that qualify them as being a distinctive part of the compulsory work uniform. To be a compulsory work uniform, the clothing must be exclusive and distinctive to your organisation and not available to the public.
Non Compulsory Uniform
A work uniform is non-compulsory where your employer does not strictly enforce the wearing of this clothing at work. This usually means that you choose whether or not to wear certain items of clothing.
Expenses relating to a non-compulsory work uniform cannot be claimed as a deduction unless your employer has registered the design with the AusIndustry.
Occupation specific clothing
Occupation-specific clothing matchlessly identifies you as a person connected with a specific profession, trade, occupation or calling. The characteristics of occupation-specific clothing are:
- it is specific to your occupation
- it is not conventional
- it would allow the public to easily identify your occupation
Some examples of occupation specific clothing are:
- A chef’s uniform
- A nurse’s uniform
- A waiters black pants/dress and white shirt
- Retail outlets requiring their employees to wear corporate colours
In order to claim a deduction the protective uniform must:
- have protective qualities
- be worn primarily to protect against the risk of death, illness or injury, or in certain circumstances, the risk of damage to other clothing in carrying out the income earning activities; and
- Reasonably be expected to be used in the circumstances.
Protective clothing includes:
- Safety glasses
- Hard hats
- Protective gloves
- Non-slip shoes
Clothing that does not have a distinct occupational character is not deductible, even if it is part of a uniform and the employer requires those specific items to be worn by the employee.
However, a deduction may be available for distinctive clothing such as overalls, smocks, aprons, and lab coats etc. that protect conventional clothing.
A deduction is also not allowable for the cost of conventional footwear, such as running shoes, sports shoes and casual shoes, as it is considered they are not protective items. The ATO considers that the cost of this footwear is a private expense and is not an allowable deduction.
If you can claim a deduction for your suitable work clothes as described above, you are then also able to claim a deduction for the cost of cleaning them. You can claim laundry expenses for the washing and drying of your work clothes, including Laundromat expenses. If your claim for laundry expenses is $150 or less, you do not need written evidence you may use a reasonable basis to work out your claim.
If you claim a deduction for laundry expenses that is in excess of $150 and your total claim for work expenses—other than car, meal allowance, award transport allowance and travel allowance expenses exceeds $300, you will need written evidence for the total claim. You can claim the cost of dry cleaning on suitable work clothes if you have kept written evidence to substantiate your claim. You do not need written evidence if your total claim for work expenses is $300 or less.
To claim a deduction for protective clothing, the item must enclose the properties:
- Protective qualities;
- Worn principally to protect the taxpayer against the risk of death, illness or injury
- Expected to be used in circumstances in the field
Protective clothing includes:
- Safety glasses;
- Hard hats;
- Protective gloves;
- Non-slip shoes.
- Butchers’ aprons;
- Fire-protection clothing;
- Bullet-proof vests;
- Pinafores and white medical coats which protect other clothing.
No claim for conventional clothes/footwear
Generally, the cost of clothing that is widely worn in the community and does not have a distinct occupational character (i.e., conventional clothing) is not deductible, even if it is part of a uniform and the employer requires those specific items to be worn by the employee.
However, a deduction may be available for distinctive clothing such as overalls, smocks, aprons, and lab coats etc. that protect conventional clothing. A deduction is also not allowable for the cost of conventional footwear, such as running shoes, sports shoes and casual shoes, as it is considered they are not protective items. The ATO considers that the cost of this footwear is a private expense and is not an allowable deduction.
Claims for sunhats, sunscreens and sunglasses – not allowable
In a landmark decision in Morris v FC of T 2002 ATC 4404, the Courts allowed a taxation deduction for expenditure on sun protection items comprising sunscreen, sunglasses and sunhats. Whilst these items are generally private, the Court confirmed that in certain specific situations, such private items may be transformed to work related items.
A “corporate” uniform or wardrobe is a collection of inter-related items of clothing and accessories that are unique and distinctive to a particular organisation. It is pivotal to a deduction being allowed that the wearer is clearly identified to the public as an employee of a particular employer.
Accessories – shoes, stockings and socks
The general rule is that expenditure on shoes, socks and stockings is private in nature and not deductible. However, a deduction is available where there is a sufficient connection between the expenditure on shoes, socks and stockings and the income-earning activities of a taxpayer.
Expenditure on shoes, socks and stockings which form an integral part of a distinctive compulsory uniform in accordance with the written policy document or guidelines provided by the employer will be deductible. These guidelines should:
- stipulate the characteristics of the shoes, socks and stockings that qualify them as being a distinctive part of the compulsory uniform; and
- Be strictly and consistently enforced with breaches of the uniform policy giving rise to disciplinary action
Non-compulsory uniform or wardrobe
A deduction is not allowable for the purchase and maintenance costs of non-compulsory uniform or wardrobe clothing. This basically means that these items are not deductible unless the taxpayer is able to claim them under some other category, e.g., they are protective, steel-capped boots etc.
Taxpayers will generally not be entitled to a deduction for the costs associated with acquiring conventional clothing. Costs associated with acquiring conventional clothing are generally considered non-deductible because they are seen as expenses which allow a taxpayer/employee to be in a position to derive income and not seen as expenditure incurred in deriving income.
Laundry expenses – Claiming up to $150 without receipts
Taxpayers who would be entitled to a claim for the cost of their deductible clothing can deduct up to $150 for their laundry expenses without obtaining written evidence. This is not an automatic deduction of $150.
Even though up to $150 in laundry expenses is not subject to substantiation, if the taxpayer is claiming laundry expenses, he or she must still be able to demonstrate that:
- They incurred the expenditure for a deductible purpose (i.e., it was an acceptable corporate uniform, protective clothing, etc.); and
- The claim was made on a reasonable estimate, rather than just blandly claiming up to $150.
It is important to remember that dry cleaning costs are not included in the $150 substantiation exemption. As such, a taxpayer may be required to substantiate all of their dry cleaning expenses even though the claim is below $150.