Did you know that as a hospitality worker, you can claim more than your usual expenses? Whether taking an advanced barista course to level up your career or spending on personal protective gear while serving customers, you can claim all these expenses under the hospitality workers’ tax claim section on your annual tax return. Wait, there’s more! In this blog, we will find out what hospitality workers can claim on taxes and what expenses are not eligible for deductions.
In the bustling hospitality industry, every dollar counts. Hospitality Tax deductions are a game-changer in putting more of your hard-earned money back where it belongs – in your pocket! But to do that, you must understand hospitality tax deductions and what you can claim.
Who would have thought that your everyday grind as a waitress, event manager, barista, or mixologist would lead to unexpected financial benefits? From consoling loners to dealing with crazy drunks, you’ve weathered it all with a smile. It’s time to turn the tables and treat yourself with hospitality tax deductions.
What Can Hospitality Workers Claim on Tax?
A hospitality worker’s tax claim is eligible under two situations:
- Your expenses are related to your existing job role and responsibilities
- Your expenses have not been covered or reimbursed by your employer
- You spent the money out of your pocket (i.e., you did not get any relevant allowance from your employer)
- You must have a proper expense record (preferably receipts) to show as proof
Let’s find out what you can claim as a hospitality worker:
Workwear and Clothing (Including Footwear)
Who knew that you could claim the cost of those snazzy aprons and branded shirts your boss made you wear on the clock? Well, we did!
You can claim the purchase, hiring, repairing, and cleaning expenses for work-wear clothing under the following categories:
- Protective clothing for work-related risks (e.g., gloves, aprons).
- Compulsory uniforms are required by your workplace (e.g., logo-embroidered shirts).
- Occupation-specific clothing that identifies your role (e.g., chef’s pants and hat).
- Non-compulsory AusIndustry registered uniforms (check with your employer).
What You Can’t Claim?
- Conventional clothing expenses, such as basic black pants or white shirts, which your employer requires for you to look proper.
- Workwear expenses are reimbursed by your employer.
You can claim car expenses for driving your car for:
- work-related trips between separate jobs on the same day (for example, travelling from your first job as a barista job to your second job as a cleaner)
- travelling to and from an alternate workplace for the same employer on the same day (for example, travelling from your hotel kitchen to an event venue for catering)
There are two methods for calculating hospitality worker tax claims on car expenses:
- Logbook Method (keep a logbook for 12 consecutive weeks) or
- Cents per Kilometre Method (claim a fixed rate per business kilometre). ATO has a fixed rate of 78 cents per kilometre – applicable up to 5000 kilometres per year.
What You Can’t Claim?
You cannot claim the cost of trips from your home to the regular workplace, even if you live far away or work outside normal business hours.
Keep accurate records of car fuel, maintenance, and repair costs. Log every work-related trip to streamline your claims on your annual tax return.
Travel expenses are not to be confused with car expenses.
For example, you may use your car to drive to different work locations and claim the car expenses. However, travel expense claims are applicable when you use other modes of transportation to go to work-related conferences or trade fairs.
Here’s what you can claim under travel expenses:
- Bus fare, taxi and train tickers
- Flights and airfare
- Car hire fees
- Overnight stay meals
- Overnight accommodation
What you can’t claim?
If your employer has given you a travel allowance within Australia, it should be included as your Income under your Payment Summary during your annual tax return. You can not claim deductions on expenses covered by your allowance.
Self-Education and Learning
Hospitality workers are encouraged to take new self-education courses to grow in their careers. Like others, you mustn’t hold yourself back from learning and growing in your job – and the fact that you can claim the self-education expenses makes career growth worthwhile.
ATO offers hospital workers tax deductions for the following types of expenses:
- Self-education and study expenses for taking a course directly related to your current job (for example, taking a barista course if you are working in a coffee shop)
- Eligible expenses include the cost of courses that maintain or improve your existing skillset and knowledge (for example, course fee to improve your mixology skills)
- Course expenses that will likely increase your income from your current employment
Expenses you can claim:
- Course fees or Tuition fees
- Cost of study text Books and equipment (test books, software, etc.)
- Travel costs to go to the learning institute
- Learning related phone and internet bills
- Accommodation and meals (if away from home overnight)
Read More: How to Lodge Tax Return in Australia?
What You Can’t Claim?
- You cannot claim expenses for general courses unrelated to your current employment
- Courses designed to help you get a new job outside of hospitality. (for example, you can not claim a course fee to become a chef when you are already working as a server)
Expenses reimbursed by your employer
Keep accurate records of your course fees, textbook receipts, and related expenses for smooth tax claims.
Tools and Equipment
Hospital workers have several tools and equipment in their arsenal. Chef knives, utensils, washers, ironing boards, cocktail mixers, and similar hospitality tools and equipment costs are eligible for hospitality workers’ tax claims.
Expenses you can claim:
- Cost of tools or equipment that you use for work (for example, chef knives or specialized utensils)
- Insurance expenses for your tools and equipment.
- Depreciation expenses over the years on equipment that costs more than $300
- An immediate deduction is eligible for a tool or equipment costs $300 or less (and isn’t part of a set costing more than $300).
Simply put, if a tool is expensive (over $300), you can claim the deduction gradually over time. You can claim the deduction immediately if the tool is relatively inexpensive (up to $300). However, if it’s a set that costs more than $300, an immediate deduction doesn’t apply.
What You Can’t Claim?
- Tools and equipment supplied by your employer or someone else.
- If you use tools and equipment for work and private purposes, you can only claim the work-related use. Insurance costs will also be apportioned between private and work-related use of tools and equipment.
Working From Home? Here is a Good News for You!
Hospitality workers can claim work-from-home running expenses, such as
- power expenses for heating, cooling, and lighting.
- Home office equipment like computers and printers (up to $300).
- A decline in the value of the equipment (computer, printer, scanner, etc.) costing more than $300.
- Decline in value of furniture and furnishings (tables, chairs, curtains/blinds, floor coverings, light fittings, etc.).
- Cost of work-related furniture and furnishings repairs
- Cleaning costs.
- Work-related phone and internet bills
There are two methods to claim hospitality work-from-home office expenses:
- Actual Cost Method: Record all expenses along with the time and days you used the office space in a diary. Claim the actual expenses incurred through an established pattern of use.
- Revised Fixed Rate Method: Claim a flat rate of 67 cents per hour for the total hours worked from home.
Let’s Find Out What More You Can Claim!
So, we know that hospitality workers can claim work-related clothing expenses, tools and equipment expenses, travel and car expenses, self-education, and study expenses.
But that’s not all!
You can claim several other employment-related expenses. Let’s go through them:
- Union and professional association fees.
- Gaming license renewal fees (you can not claim the actual license cost).
- Renewal expenses for responsible service of alcohol certificates
- Personal protective equipment expenses (PPE), such as gloves, face masks, sanitisers, or antibacterial spray expenses, if you work closely with customers
- Tax agent’s fees for preparing yearly tax returns
- Work-related phone and WiFi bills
- Publications and journals related to your job role
- DGR-approved charity donations
- Sunscreen and sunglasses expenses (if you work in an open-air venue)
- Income protection insurance
Expenses you cannot claim:
- Private expenses like music subscriptions, childcare costs, fines, flu shots, or other vaccinations, even if they are required for work.
- Employer Covered or reimbursed Expenses cannot be claimed as deductions.
What Types of Records You Need to Make Hospitality Workers Tax Claim?
Rock-solid expense records are your secret weapon for a successful refund. Stay organized and keep comprehensive receipt records. Here are some helpful tips to keep you on track throughout the year.
Forget the paper trail! Going digital is the way to go. You don’t have to keep physical receipts anymore. Instead, keep a photo of the receipt or save an email receipt. Just make sure it’s easily legible and includes the following essential details:
- Supplier Name
- Expense Amount
- Nature of the goods or services
- Date the expense was paid
- Date of the document
Tip: No need to keep receipts for expenses under $10 (as long as they don’t exceed a total of $200 cumulatively). It’s a small relief, right?
Create a simple and reliable tax organization system to make your record-keeping journey a breeze. It can be as simple as a dedicated folder on your computer or a cloud-based storage solution – whatever works best for you. The key is to stay on top of it throughout the year.
Three Ways to Organise Your Hospitality Tax Deductions
Now that you fairly understand what hospitality workers can claim on tax, it’s time to take the next step and organize your hospitality tax information in one place.
There is a right time and place for everything – even for information record keeping.
You wouldn’t want to miss potential tax savings just because you were slacking.
You can streamline your hospitality tax deductions in three ways:
Get Your Hospitality Tax Deductions Checklist
|Items to Gather
|Income and Deductions
|Pensions or government payments/allowances
|Interest earned from banks, building societies, etc.
|Details of rental property income
|Details of any business income
|Details of any other income earned
|Personal car expenses (estimate of kilometers or logbook)
|Travel expenses (flights, taxis, train and bus fares)
|Accommodation costs while working away from home
|Phone costs for work usage
|Work percentage of computer/laptop expenses
|Work percentage of internet costs
|Home office running expenses
|Work-related self-education expenses
|Last year’s tax return fee
|Income protection insurance premiums (paid outside of Super)
|Rental property expenses
|Records of sales and purchases of shares, business, or property
|Private health insurance details
|Details of any government debts
|Work-Related Clothing & Equipment
|Itemized purchase costs of equipment up to $300
|Purchase costs of equipment over $300
|Leasing, repair, and maintenance costs of tools and equipment
|Interest on loans for work-related equipment
|Job-related self-education expenses
|Hospitality books and subscriptions
|Cash and bar shortages
Go to ATO MyTax Section to Manually Manage Your Taxes
ATO my deductions tool is a convenient solution for recording, organizing and tracking hospitality tax expenses.
- Work-Related Expenses: Track travel expenses and other costs directly associated with generating income.
- General Expenses: Record everyday expenses, including gifts and donations.
Come tax time, you can streamline the lodgment process by uploading and sharing your hospitality expense records with your tax agent through the ATO app.
Suggested Read: How Long Does Tax Return Take in Australia?
Here is How to Access the ATO Work-Related Hospitality Expense Summary
ATO website and app provide information in multiple languages. Follow these steps to retrieve your hospitality tax expenses summary:
- Open the ATO website or app and navigate to the homepage.
- Select the desired language from the available options.
- Locate the “Individuals” section.
- Check the list to determine if a summary is available in the selected language.
Get an AI Powered Tax Assistant App to Automate the Process.
Simply enter your personal information, expenses, and income statements to reconcile your tax expenses and see eligible hospitality tax deductions in one place. (Don’t forget to turn on the reminders to stay ahead of the tax season expenses and deductions)
What Happens if You Make a Mistake on Hospitality Tax Returns Information?
Hey, we get it. Mistakes happen, even while filing your tax return. The good news is that you don’t need to panic and can handle it smoothly. We recommend taking corrective action ASAP. Trust us; it’s in your best interest.
When putting your tax return together, be diligent and accurate. Take extra care and enter the right information along with supporting documentation. Only claim legitimate deductions to avoid potential ATO penalties or legal consequences. We want you to stay on the right side of the taxman!
But let’s face it; innocent mistakes can still slip through. If you realize that you’ve submitted incorrect or unsubstantiated claims after self-lodging, don’t panic. The solution is simple:
Contact expert Tax Accountants and get the help you need throughout the correction process.
Got lingering questions about lodging your tax return? Don’t worry; we’ve got your back. Talk to our experienced tax consultants at Taxly.Ai.
Mistakes happen; prompt action and expert guidance can save you from consequences. In the future, use an Automated AI-powered Tax App to avoid making serious mistakes. You’re in good hands with the Taxly.Ai tax app!
So there you have it – knowing all the eligible hospitality worker tax claims is just like finding hidden treasure. Keep accurate records via the ATO app and digital copies of all receipts. And if you need help, reach out for professional advice. Whether serving drinks or managing events, claiming your tax benefits means more money in your pocket. So go ahead, claim what’s yours, and make that money work for you!
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