Do you know which work-related expenses you can claim as an agricultural worker?
Are you confident you’re reporting your income correctly and maximising your tax deductions?
Well, understanding the rules around tax returns and deductions is crucial to ensure compliance and avoid missing out on eligible claims.
This blog helps you get proper clarity on claimable deductions and how you can maximise your income tax return.
Understanding taxable income for agricultural workers
As an agricultural worker, you must declare all income received during the financial year, including:
- Salary and Wages: Payments for your work, including any bonuses or overtime.
- Allowances: Payments received for specific job conditions, such as tools, travel, or dangerous work.
- Other Income: Compensation or insurance payouts, such as income protection policies.
What not to include as deductions?
Reimbursements—where your employer refunds expenses you’ve already paid for—are not included as income, nor can you claim deductions for reimbursed costs.
Income And Allowances Overview
| Type | Declare in Tax Retur | Claim Deductions |
|---|---|---|
| Salary and Wages | Yes | Yes Yes, for work-related expenses. |
| Allowances (e.g., tools) | Yes, if taxable | Yes, for eligible expenses. |
| Reimbursements | No | No, costs already covered. |
Claiming work-related deductions
To claim a deduction for work-related expenses, you must meet three conditions:
- You paid for the expense yourself and weren’t reimbursed.
- The expense directly relates to earning your income.
- You can provide evidence (receipts, invoices, etc.) to support the claim.
If an expense is partly for work and partly personal, only the work-related portion can be claimed.
Deductible expenses for agricultural workers
| Category | Examples | Claimable |
|---|---|---|
| Protective Clothing | Steel-capped boots, gloves, sunhats | Yes | Tools And Equipment | Fencing tools, pruning shears, chainsaw | Yes |
| Vehicle Expenses | Travel between job sites | Yes, conditions apply |
| Uniforms | Compulsory branded or registered uniforms | Yes |
| Laundry | Washing protective or uniform clothing | Yes |
| Self-Education | Courses improving your current work skills | Yes |
| Travel Expenses | Overnight accommodation, meals, and travel | Yes, for work-related travel. |
Protective clothing:
Clothing specifically designed to protect you from risks in your work environment—such as steel-capped boots, gloves, or high-visibility vests—is deductible. Conventional clothing, even if required by your employer, such as jeans or shirts, cannot be claimed.
Tools and equipment:
Tools like pruning shears, chainsaws, or fencing equipment used exclusively for work purposes are deductible. For items costing $300 or less, you can claim the full amount in the same year. More expensive tools must be claimed as depreciation over their effective life.
Vehicle expenses:
In the case of travelling for professional purposes like moving from one office to another or carrying a bulky weight for tools, costs incurred on such travelling can be claimed by making necessary deductions. You cannot, however, deduct costs related to travelling to and from your actual home to a regular workplace. You will have to choose between the two methods: Cents Per Kilometre or the Logbook method.
Uniforms & laundry:
- Uniforms: If your employer requires you to wear a specific uniform (e.g., branded workwear) or if it’s registered on the ATO’s list of approved occupational clothing, you can claim the cost of purchasing, repairing, or replacing it.
- Laundry: Cleaning work-related clothing is also deductible. This includes washing, drying, ironing, or dry-cleaning costs for uniforms or protective clothing.
- Claim Calculation:
- $1 per load if washing only work-related clothing.
- $0.50 per load if washing work and personal clothing together.
- For laundry claims under $150, you don’t need to keep receipts, but you must be able to show how you calculated the claim.
- Claim Calculation:
Travel expenses:
Travel requiring overnight stays for work purposes is deductible, including meals, accommodation, and incidentals. Regular commuting from home to work, however, is not claimable.
Self-Education:
Courses that directly improve skills or knowledge required for your current job are deductible. General education or unrelated studies are not eligible.
Key exclusions to watchout for!
While agricultural workers can claim many deductions, some items are explicitly excluded:
- Conventional clothing (e.g., jeans, shirts) and grooming expenses.
- Costs for obtaining employment, such as initial licenses.
- Commuting expenses for traveling between home and your regular workplace.
- Fines or penalties incurred during work.
Specific scenarios: vehicle and travel expenses
Agricultural workers are mostly dependent on the use of the vehicle during work that might make them deductible in some specific instances.
- Eligible travel might include moving from one site of work to another, transporting bulky tools-when there is no safe place to keep it, and travel to non-regular places of work.
- Ineligible travel includes traveling from home to a permanent place of work.
Calculation methods for vehicle expenses:
- Cents per Kilometre: Make a claim on a fixed amount per km for working travel.
- Logbook Method: Keep an accurate log of work-related use of the vehicle to derive proportionately deductible expenses.
For non-standard vehicles (e.g., motorcycles or utility vehicles), deductions must be based on actual costs, including fuel, repairs, and depreciation.
Understanding the tax landscape as an agricultural worker doesn’t have to be tough. By understanding your income obligations and deduction entitlements, you can streamline your income tax return process and potentially reduce your taxable income.
It does not have to be so difficult understanding the tax environment as an agricultural worker. Understand your earning obligations and tax deduction claim entitlements so that you can simplify your income tax return process and reduce your taxable income.
For personalised assistance with your tax returns, contact any registered income tax accountant to make sure you maximise benefits and comply with ATO regulations.
Need help with your tax return?
KPG Taxation understands that agricultural workers face unique challenges when it comes to filing tax returns and claiming deductions. Let our well-experienced team guide you in the completing process, so you can claim every eligible deduction while being careful about compliance.
