An Australian accountant has revealed the little-known tax deduction that could be hiding on your school fees statement. Tax time is just around the corner and many people are looking for ways to boost their returns ahead of June 30.

While you can’t claim a tax deduction for child care or school fees, the Australian Taxation Office (ATO) does allow you to claim a deduction for donations to the school building fund of your child’s school. This might be labelled as ‘school building levy’ or ‘building levy fund’.

Accounting Haus chartered accountant Anita Niaz told Yahoo Finance many parents had paid this expense but weren’t aware that it was potentially tax-deductible. But that’s only if you paid the amount voluntarily.

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“It has to be a voluntary payment, which is why it will meet the criteria of being a gift and is kind of like a donation,” she said.

“Some schools make it compulsory and once it becomes compulsory it is not deductible.”

Niaz recommended parents check their school fee statement to see if the levy was listed. Then, they can double-check with the school whether the payment was voluntary.

School building fund levies are generally between $200 and $1,000, depending on the school.

If you are eligible to claim, Niaz said "don't forget" to include it in your 2025 tax return.

When will the school building levy be tax deductible?

Niaz said the school needed to be a deductible gift recipient (DGR) and had to be endorsed with this status by the ATO for you to be able to claim. You can look this up on the ABR website.

The ATO notes you can’t claim a deduction if the donation isn’t truly a gift. For example, if you make a payment to the school building fund as an alternative to an increase in your child’s school fees, or for placement on a waiting list.

The ATO has more information on school building funds here.

Aussies surprised by little-known tax deduction

Niaz shared a video about the tax deduction online and was flooded with comments from parents.

Many Aussies said they didn’t realise they could claim the expense on tax.

“Wish I knew this 12 years ago. My son’s school is $1,130,” one said.

“Thank you!! ours is $850 and is DGR endorsed!” another said.

Other parents said their levy was compulsory, so they weren’t able to claim.

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