Self-education is highly important towards improving your skills and advancing in your career. At times, this can be very costly.
On a brighter note, if such costs are associated with your job, you can actually recover such a cost as an expense under tax.
If you want to advance or improve your skills, then it’s crucial what are the tax implications and how you can save money by claiming them under deductions.
This comprehensive blog will take you through claiming your self-education expenses in your Australian tax return.
What Are Self-Education Expenses?
Self-education expenses are costs incurred when you engage in activities to either maintain or enhance existing skills used in your current work.
Some examples:
- Courses at educational institutions
- Courses by professional or industry associations
- Conferences or seminars that you have attended in relation to your work
- Self study and study tours
Eligibility Criteria For Claiming Self-Education Expenses
Not all self-education expenses are tax-deductible.
To claim a deduction, you must meet the following requirements:
1. Connection to Employment
At the time of incurring the expense, it must be directly related to your employment. This means that the course or training should either:
- Maintain or improve the skills required for your current job.
- Lead to an increase in your income from your current job.
2. Current Employment
You must be employed at the time of incurring the self-education expenses. If you’re unemployed or the education is meant to help you get a new job, you cannot claim a deduction.
3. Sufficient Connection
The self-education must relate specifically to the tasks or duties of your current role. For example, a full-time sales assistant who takes a course in fashion photography cannot claim a deduction, as the course isn’t directly related to their sales role.
What Self-Education Expenses Can You Claim?
If your expenses meet the eligibility criteria, the following types of costs are deductible:
| Expense Type | What You Can Claim |
|---|---|
| Tuition, course, conference fee | Fees for courses and conferences, unless reimbursed by employer |
| General course expenses | Computer consumables, stationery, phone calls, textbooks |
| Depreciation of assets | Decline in value of equipment like computers or desks |
| Car and transport expenses | Travel between work and place of education |
| Accommodation and meal expenses | Only if the course requires overnight stays |
| Interest on borrowings | Interest on loans taken out for self-education |
Specific Expense Categories In Detail
- Tuition and Course Fees:
You can claim the fees for tuition, seminars, or conferences if you’re not reimbursed by your employer. However, fees for Commonwealth supported places, such as HECS-HELP loans, cannot be claimed as deductions. - General Course Expenses:
This includes costs like textbooks, stationery, phone calls, internet usage (for study purposes), and membership fees for professional journals or organisations related to your work. - Decline in Value of Depreciating Assets:
If you purchase equipment like a computer or desk for your self-education, you can claim the decline in its value over time. For items costing $300 or less, you can claim the full amount in the year of purchase. For items costing more than $300, you will need to calculate the depreciation over the asset’s effective life. - Transport Expenses:
You can claim travel between your home and place of education, as well as travel between your work and place of education. However, trips from your place of education to home after work are not deductible. - Accommodation and Meal Expenses:
You can claim these only if you need to stay away from home overnight for your self-education, such as attending a conference in another city. - Interest on Borrowings:
If you take out a loan to cover your self-education expenses, the interest on that loan is deductible. However, you cannot claim deductions for repayments of the loan principal.
Expenses You Cannot Claim
There are several expenses you cannot claim when it comes to self-education:
- Fees paid by someone else, such as your employer
- Fees for Commonwealth supported places (e.g., HECS-HELP loans)
- Repayments of student loans, including FEE-HELP, HECS-HELP, and VET Student Loans
- Accommodation and meals for courses that don’t require you to stay overnight
- Self-education costs related to income from a qualifying Australian Government allowance
Apportioning Expenses
If your self-education expenses are used for both work-related and private purposes, you must apportion the costs accordingly. For instance, if you purchase a computer and use it for both study and personal use, you can only claim the percentage of time you use it for study purposes.
Maximise Your Self-Education Tax Deductions With Leading Tax Experts
Need help understanding self-education expense deductions? Our trusted tax agent in St Albans, can guide you through the process and ensure you’re claiming all eligible deductions. Whether you’re upgrading your skills or pursuing a new qualification, we’ll help you make the most of your tax return. Get in touch with LTE Tax today for personalised tax advice and efficient services.
