Most of us want to better ourselves at work and a large part of doing that is equipping yourself with the skills you need to advance your career.
The good news is that you can often do that, and claim a tax break on the costs you incurred at the same time.
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Self-education expenses are tax deductible when the course you undertake leads to a formal qualification and:
has a sufficient connection to your current job, or
maintains or improves the specific skills or knowledge you require in your current job, or
results in, or is likely to result in, an increase in your income from your current job.
You can’t claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current employment even though it:
might be generally related to it, or
enables you to get a new job.
Example one: You are a nurse and choose to undertake a Masters of Nursing in your chosen field. This will allow you to take on additional responsibilities in your job and should move you on to a higher pay scale. This increases your skills in your chosen field of endeavour and is connected to your current income earning activities. You will be able to claim a tax deduction for undertaking the Masters degree, and all related costs (see below).
Example two: You are a nurse and wish to train to become a doctor. You commence a medical degree. This opens up new income earning opportunities in the future and the cost of the course is incurred too soon to be regarded as being incurred in earning your assessable income. The costs of the medical degree will not be tax deductible.
What can I claim?
course and tuition fees
textbooks and trade, professional or academic journals
fares, accommodation and meals (if you are away from home overnight)
computer consumables (such as paper or ink)
depreciation on assets such as computers or laptops (where the cost exceeds $300)
purchase of equipment or technical instruments costing $300 or less
home office running costs (for any home study) such as heat, light, etc
interest on any money borrowed to fund the course
student union fees and other student services and amenities
Expenses you can’t claim
You can’t claim the following expenses in relation to your self-education:
repayments of Higher Education Loan Program (HELP) loans
Student Financial Supplement Scheme (SFSS) repayments
home office occupancy expenses (such as mortgage interest or rent)
meals where not sleeping away from home
You can’t claim for the first $250 if the course is provided by a school, college, university or other place of education. However, if you incur expenditure on otherwise non-deductible items like childcare, meals where not sleeping away from home and certain non-deductible travel, you can offset these against the $250 and potentially reduce the amount you can’t claim.
Personal development: attending conferences and seminars
Even though attending such an event doesn’t typically generate a formal qualification, you can also claim the cost of attending seminars, conferences or workshops that are sufficiently connected to your work activities. This can include formal education courses provided by professional associations. The requirement to disallow the first $250 of the claim does not apply to these sorts of expenses.
Example: You are a nurse and you attend a two-day professional development conference highlighting the latest advances in your field of nursing. The knowledge you gain from attending this conference will be directly applied in your work when you go back to the hospital where you work. You can claim the costs of attending the course, as well as ancillary costs such as travel, accommodation and meals.
If, as is often the case, the conference or seminar is held somewhere warm and sunny, and you decide to stay on for a short holiday afterwards, you will need to apportion your expenses between conference-related and holiday-related expenditure.
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