Do you spend your time looking after our future generation? Kudos to you for taking care of our little ones and making a difference in our lives. Childcare workers are an essential part of Australia’s workforce and it’s about time that you get to know more about your finances.
If you are a nanny, a childcare worker, a preschool aide, a childcare assistant or a kindergarten aside, you are eligible for several amazing tax deductions. Please follow our guide on what can childcare workers claim on tax to figure out your eligible deductions.
Key Deductions Childcare Workers Can Claim on Tax
Uniform and Clothing Expenses:
If you’re required to wear specific branded clothing, like shirts, hats, pants, or skirts, those costs are tax deductible.
The rule of thumb is that if the clothing is unique to your workplace and not available to the general public, you can claim it.
Laundry and cleaning expenses for these work clothes can also be claimed. Just remember to keep track of your washes and separate them from personal laundry.
Protective Items:
If your job involves activities like art, cooking, or outdoor play, you can claim the expenses incurred on protective equipment, such as:
- Aprons
- Gloves
- Sun protection (hats, sunscreen, sunglasses)
- Protective footwear can be claimed.
These expenses contribute to your job safety and can be included in your tax return.
Training and Self-Education Expenses:
Training relevant to your role, such as certificates, diplomas, professional development courses, textbooks, equipment, and materials, is usually tax deductible.
Even expenses like travel (flights, transport, meals, accommodation) for training can often be claimed if they’re necessary for your professional growth.
Car Expenses:
If you use your car for work-related tasks, such as picking up supplies, attending meetings, or going on excursions, the associated costs are tax deductible.
However, you can not claim expenses for commuting from home to the workplace.
You can choose between the cents-per-kilometre method or the more detailed logbook method to record your miles.
Child Care Equipment and Materials:
Any items you purchase for the children you care for that are not reimbursed by your employer can be claimed. This includes teaching aids, art supplies, toys, stationery, and more.
Keep those receipts and ensure you’re not being reimbursed for these expenses.
Explore Further: Can You Claim Deductions Without Receipts in Australia?
Mobile Phone Expenses:
If you’re using your personal phone for work-related calls, texts, or emails, you may be able to claim a portion of your monthly phone bill.
Analyze your bills to determine the percentage of work-related usage and claim that portion as a deduction.
For Example:
Let’s say Sarah is a dedicated childcare worker who uses her personal mobile phone extensively for work-related activities, including communicating with parents, coordinating activities, and staying in touch with her colleagues.
She estimates that about 40% of her total phone usage is directly related to her job.
During the financial year, Sarah’s total mobile phone bill amounts to $800.
To calculate Sarah’s potential tax deduction:
- Calculate the Work-Related Portion: Work-related percentage = 40% (0.40) Work-related usage = $800 * 0.40 = $320
- Claim the Deduction: Sarah can claim a tax deduction of $320 for work-related mobile phone expenses on her tax return.
It’s important for Sarah to maintain records of her mobile phone bills and clearly indicate the work-related calls and usage as evidence of her claim.
Other Childcare Worker’s Tax Deductions
Work from Home Office Expenses:
If you perform work-related tasks at home, you could potentially claim a portion of your home office expenses, such as internet, electricity, and office supplies.
Just ensure that you’re genuinely using your home as a workspace for your job.
Union and Professional Association Fees:
Membership fees for unions or professional associations directly related to your childcare profession can often be claimed as a deduction.
Meals and Travel Expenses:
If your job requires you to travel for work-related purposes, you might be able to claim meal expenses incurred during those trips. Be sure to keep records and receipts.
Professional Development and Subscriptions:
Expenses related to professional development, workshops, conferences, and subscriptions to industry-related magazines or journals can be deductible if they’re directly relevant to your role.
Income Protection Insurance:
Premiums paid for income protection insurance, which safeguards your income in case you’re unable to work due to illness or injury, can sometimes be claimed.
Stationery and Teaching Supplies:
Expenses for purchasing stationery, teaching supplies, and educational materials that you personally cover for your job can potentially be claimed.
Safety Equipment and First Aid Courses:
If you need to invest in safety equipment or take first aid courses as part of your role, these expenses might be deductible.
Childcare Equipment Maintenance:
Costs incurred for the maintenance and repair of childcare equipment that you use on the job could be claimed.
Tax Agent Fees:
The fees you pay to a registered tax agent to help you with your tax return can also be deductible.
You Must Meet the Following Conditions to Claim Childcare Tax Deductions
Expenses Must Be Work-Related:
Deductions can only be claimed for expenses directly related to your role as a childcare worker and incurred while performing your job duties.
Expenses Must Be Paid by You:
You can claim expenses that you have personally paid for, not those reimbursed by your employer or others.
Expenses Must Not Be Reimbursed:
You cannot claim expenses that have been reimbursed by your employer or any other source. If you’ve been reimbursed, there is no out-of-pocket expense for you to claim.
You Must Show Proof of Expense Records:
Keep accurate records, including receipts and invoices, to substantiate your expenses.
Expenses Must Be Incurred While Earning Income:
Expenses must have been incurred while actively earning income as a childcare worker.
Expenses Must Be Connected to Your Job Role:
Expenses should be necessary for your job and have a clear connection to your employment duties.
Apportionment:
If an expense has work-related and personal use, you can only claim the portion relevant to your job.
No Double Dips:
Avoid claiming an expense already deducted elsewhere or by someone else.
What Can You Not Claim?
While there are various expenses you can claim to lighten the tax load, there are a few items that don’t make the cut:
- Regular Clothing: Everyday wear that could double as non-work attire, even if you wear it exclusively for your job and bought it for that purpose. So, those jeans or that white T-shirt, for instance.
- Employment Agency Fees: Any upfront, joining, or search fees paid to an employment agency aren’t deductible.
- Meals and Snacks: Even if your employer provides you an allowance for meals during work hours, you can’t claim the cost of meals or snacks consumed in the course of your regular workday.
- Grooming Costs: Expenses for personal grooming, like hairdressing or makeup, even if looking sharp are part of your job’s requirements.
- Home-to-Work Travel: Travel expenses incurred while commuting between your home and workplace, no matter how far you travel.
What Records Do You Need to Keep?
Keeping records might sound mundane, but it’s a game-changer come tax season. Maintaining a tidy collection of receipts is key for a successful tax refund, so it’s wise to set up a simple system to stay organised throughout the year.
Remember, you don’t need to hoard stacks of paper. Digital copies are acceptable as long as they contain:
- Supplier’s name
- Expense amount
- Description of goods or services
- Date of payment
- Document date
Moreover, you’re off the hook for receipts under $10, as long as these small expenses don’t pile up beyond a total of $200. This takes a bit of weight off the record-keeping process.
The Bottomline
There are several tax deductions childcare workers can claim on tax given that the expenses were related to their job role and were paid out of their pocket. Key tax deductions for childcare workers include work-related uniform expenses, personal protective equipment, job-related stationery, phone bills, car expenses and training and personal development expenses.
Expand Your Understanding:
- How do I Find my Tax File Number in Australia?
- How to Lodge Tax Return in Australia?
- How Long Does Tax Return Take in Australia?
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