Self-education expenses are an essential consideration for many Australians who are pursuing education, training, or professional development related to their current or future work. If you’re in a position where you are spending money on education and learning activities that relate to your employment, you may be entitled to claim these costs as a deduction on your tax return. The deduction of these qualified costs reduces your taxable income which decreases your amount of tax liability.
This guide will detail self-education expenses along with claiming types and requirements for eligibility while demonstrating appropriate tax deduction handling techniques for maximum tax benefit utilization.
Understanding Self-Education Expenses
Self-education expenses refer to the costs you incur when you are undertaking courses, attending seminars or conferences, or engaging in self-paced learning related to your current employment. The ATO allows tax-deductible claims for these expenses when they satisfy their stated requirements. Here’s a breakdown of situations where self-education expenses apply:
- Undertaking formal courses at an educational institution (including both undergraduate and postgraduate studies).
- Attending work-related conferences or seminars.
- Self-paced learning or study tours, which can even include overseas study if it’s relevant to your career.
- Enrolment in distance education courses that align with your employment.
When Can’t You Claim a Deduction?
While claiming self-education expenses may seem straightforward, there are certain situations where you cannot claim a deduction. You are not eligible to claim self-education expenses if:
- The education is not related to your current employment: For example, if you are studying a completely new field (like transitioning from being a nurse to becoming a doctor), you cannot claim these education expenses as they don’t have a sufficient connection to your current job.
- You are not employed: If you are not working, you cannot claim self-education expenses even if the course you are taking may be related to a potential future job.
- The education only vaguely relates to your job: For instance, if you’re working as a casual sales assistant and enrol in a full-time fashion photography course, this is not directly related to your current job. Therefore, it may not qualify as a deductible self-education expense.
- The education is for obtaining new employment: If the course is undertaken to change careers entirely, like moving from one industry to another, the costs cannot be deducted.
Expenses you can claim
If your self-education expenses meet the eligibility criteria, you can claim a deduction for the following expenses:
- Tuition, course, conference or seminar fees
- General course expenses
- Decline in value of depreciating assets
- Car and other transport expenses
- Accommodation and meal expenses (incurred when the self-education requires you to travel and be away from your home for one or more nights)
- Interest on borrowings
Tuition, Course, Conference, or Seminar Fees
One of the most common deductions Australians claim is tuition fees. This includes any course-related fees such as student fees or conference registrations that are paid for your education. Your eligibility to claim deductions for eligible expenses ends if your employer gives reimbursement.
Tuition fees for a university or higher education institution can be deducted, including those paid through FEE-HELP or VET Student Loans. The loan repayments themselves cannot be claimed in your tax return.
General Course Expenses
In addition to tuition, there are other costs directly related to your education that may be deductible:
Computer consumables (e.g. printer cartridges)
Equipment repairs (e.g. repairs for your computer)
Internet and data usage (excluding connection fees)
Phone calls related to study
Postage, stationery, student union fees
Textbooks, academic journals, and other course materials
If you use your computer or other equipment for both personal and educational purposes, you will need to apportion the costs accordingly.
Depreciation of Depreciating Assets
A depreciating asset is something that loses its value over time, like a laptop or desk. If you use these items for your work-related self-education, you can claim a deduction for the decline in value (depreciation) over the asset’s useful life.
Assets under $300: If the asset costs $300 or less, you can claim the full deduction in the year of purchase.
Assets over $300: For items costing more than $300, you’ll need to claim the depreciation over time, based on the effective life of the asset.
Car and Other Transport Expenses
If you need to travel to your place of education or a seminar, you may be able to claim the transport costs, but only if the travel is directly related to your education and work activities. You can claim travel expenses between:
Home and your place of education
Work and your place of education
You cannot claim travel between your home and work unless it’s for a work-related purpose.
Accommodation and Meal Expenses
While accommodation and meal expenses are usually considered private living expenses, you may be able to claim them if you’re required to stay away from home for work-related self-education activities.
This applies when your education requires you to travel for an overnight stay. The expenses must relate to education and not personal enjoyment.
Interest on Borrowings
You can also claim interest on loans used to pay for self-education expenses. However, principal loan repayments are not tax-deductible.
Expenses You Can’t Claim
There are certain expenses you cannot claim in relation to self-education:
- Tuition fees reimbursed by your employer
- Commonwealth supported places at universities
- Repayments for student loans such as HELP, FEE-HELP, and VET Student Loans
- Accommodation and meals unless you are temporarily away from home
- Costs related to education that doesn’t connect directly to your current employment
Apportioning Expenses
If you use an item or incur an expense for both work-related and personal purposes, you will need to apportion the expense. You can only claim the portion of the cost related to work-related self-education.
Keeping records for self-education expenses
You must keep receipts for all self-education expenses you incur, including:
- Course fees
- Text books
- Stationery
- Depreciating assets such as computers, laptops and office equipment
- Transport and travel expenses.
You also need to be able to explain how the course directly relates to your employment activities at the time you incurred the self-education expense.
If you are claiming a deduction for a depreciating asset that you have used for self-education, you must keep:
- Your receipts or invoices that clearly show the cost of the depreciating asset and the date of purchase
- Details of how you worked out the effective life of the depreciating asset where you haven’t used the effective life determined by the ATO
- Details of how you work out your claim for decline in value, including which method you used and the opening adjustable value
- Details of the percentage of time you use the asset for self-education.
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FAQs On Claiming Self Education Expenses In Tax Return
Yes, you can claim a portion of your phone expenses on tax if it’s used for work-related purposes. You’ll need to determine the percentage of your phone usage that is work-related and only claim that portion. Keeping a log of your calls and usage can help substantiate your claim.
Yes, if you use your internet for work-related purposes, you can claim a portion of your internet expenses on tax. Similar to phone expenses, you’ll need to calculate the percentage of your internet usage that is work-related. Maintaining records of your usage can support your claim.
A laptop is generally not 100% deductible in a single year unless the cost is below the immediate deduction threshold. For more expensive laptops, you may need to depreciate the cost over several years according to the Australian Taxation Office (ATO) guidelines. If the laptop is used for both work and personal purposes, only the work-related portion is deductible.
Yes, antivirus software is tax deductible if it is used on a device that is necessary for your work or business. The deduction should correspond to the percentage of work-related use of the device. Keeping records of your software purchase and usage is advisable.
The Education Tax Refund was a government program in Australia that provided financial assistance to eligible families for education-related expenses. However, it was replaced by the Schoolkids Bonus, which has since been discontinued. Currently, eligible education expenses may be claimed under different tax deductions or government programs.
A tax refund in Australia occurs when the amount of tax you’ve paid throughout the year exceeds your tax liability. After filing your tax return, the Australian Taxation Office (ATO) calculates whether you’ve paid too much tax, and if so, the excess amount is refunded to you. Tax refunds may also result from claiming deductions and offsets that reduce your taxable income.
