This week’s question comes from a beauty therapist who is an employee in Sydney and isn’t sure what, if any, work-related expenses she can claim on her taxes. Find out what beauty therapists and other professionals in the beauty industry can claim on their taxes. We consulted the Australian Taxation Office to find out what’s fair game for claiming this year and they’ve provided Professional Beauty readers with an incredibly comprehensive answer. Read on to learn more.
Q “Thanks for taking questions like this. What I want to know is what can I claim on my taxes with regard to work? What expenses am I allowed to claim? I don’t know, and I don’t want to make any assumptions and get it wrong. Thank you!”
A “The deadline for lodging your tax return is 31 October. If you plan to lodge through a tax agent you usually have longer to complete your return, but make sure you contact them before 31 October. Do you know what deductions you can and can’t claim in your tax return?
Lodging your tax return is easy with the Australian Taxation Office’s (ATO) work-related expenses guide for hairdressers and beauty therapists available at ato.gov.au/hair2021.
The ATO’s hair and beauty guide provides tailored information on common deductions for people working in the industry. It also includes tips and tricks to help you get your deductions right this tax time.
To claim a deduction for work-related expenses you can only claim a deduction for the work-related portion of an expense. You can’t claim a deduction for any part of an expense that is not directly related to earning your income or that is private.
ATO, Assistant Commissioner Tim Loh noted that COVID-19 has changed up people’s work habits, so we expect their work-related expenses will reflect this. “You can’t simply copy and paste previous year’s claims without evidence,” says Tim.
“if your specific duties require physical contact or close proximity to customers or clients, or your job involves cleaning premises, you may be able to claim items such as gloves, face masks, sanitiser or anti-bacterial spray.”
The ATO also shared some tips on common deductions for hairdressers and beauty therapists below such as; car expenses, tools and equipment, grooming expenses and seminars, conferences and training courses.
These common deductions are:
You can’t claim a deduction for normal trips between your home and work. These are private expenses, even if you live a long way from your usual workplace and/or must work outside normal business hours (for example, weekend or early morning shifts).
You can claim a deduction for the cost of using a car you own, lease or hire (under a hire-purchase agreement) when you drive:
- between separate jobs on the same day – for example, from the salon to your second job as a TAFE trainer
- to and from an alternate workplace for the same employer on the same day – for example, driving from the beauty salon to a client’s home for a make-up booking.
Tools and equipment
You can claim a deduction for tools and equipment you purchase to perform your duties as a hairdresser or beauty professional. For example, scissors, electric clippers, combs, curlers and razors.
You can only claim a deduction for the work-related use of the item. For example, if you purchased a spray tan gun and you use it to tan your friends on the weekends, you can’t claim a deduction for the non-work-related use.
A helpful tip to remember is if a tool or item of equipment is only used for work and:
- cost $300 or less – you can claim an immediate deduction for the whole cost
- cost more than $300 – you can claim a deduction for the cost over the life of the item (that is, decline in value).
You can’t claim a deduction for tools or equipment that are supplied by your employer or a third party.
You can’t claim a deduction for hairdressing, cosmetics, hair and skin care products you personally use, even though:
- you may be paid an allowance for grooming, or
- your employer expects you to be well groomed when at work.
All grooming expenses are considered private expenses.
Seminars, conferences and training courses
With new products and techniques being constantly released in the hair and beauty industry, keeping-up your training is essential. You can claim a deduction for the cost of seminars, conferences and training courses that relate to your work as a hairdresser or beauty professional. For example, attending a conference explaining new techniques into anti-ageing for a beauty therapist or attending an advanced colouring or cutting training course for a hairdresser.
The costs you can claim includes fares to attend the venue where the seminar, conference or training course is held and registration costs. If you need to travel and stay away from home overnight to attend such an event, you can also claim the cost of accommodation and meals.
Where you have a dual purpose for attending the seminar, conference or training course, for example you add a holiday after the training course, then you can only claim the work-related portion.
Remember to report all income in your tax return and apportion your expenses based on your work-related use.
For more information, or to download the guides available for specific occupations, visit http://www.ato.gov.au/occupation21.”
Have a business question for us? Email us firstname.lastname@example.org and we’ll do our best to get you an answer and post it here.
Read the current issue of our digital magazine here:
For more news and updates, subscribe to our weekly newsletter.
Have an idea for a story or want to see a topic covered on our site and in our pages? Get in touch at email@example.com.