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Guide to Tax Returns & Deductions for Australian Apprentices

What is tax?

Tax is money that is collected by the government to help pay for essential services including health, education, defence, infrastructure, welfare and more. You may need to pay tax if you receive an income from:

  • A job
  • Government allowances and payments
  • running a business
  • other sources (like bank interest)

Tax returns

For an apprentice or trainee, your employer will be withholding an amount throughout the financial year (July 1 - June 30) to help you meet your end-of-year tax liability. This amount is forwarded to the Australian Tax Office (ATO). After the end of the financial year, you will need to lodge a tax return. 
Your tax return calculates how much tax you need to pay for the year. If the amount your employer withheld is different than the amount you have paid, you will be issued with either a bill to pay the unpaid tax, or a tax refund. The amount withheld is calculated so that most people receive a small tax refund.

Tax deductions

A critical step when lodging your tax return is to claim your deductions. A tax deduction reduces your taxable income. To claim a deduction, money must have been spent during the financial year on a product or service that is directly related to earning your income. You will need to have kept a receipt or invoice and it must be money that has come from your own pocket, without being reimbursed by your employer.

Common deductions for apprentices & trainees

Whether you are an apprentice of trainee, there is a wide range of deductions that you may be able to claim. Below is a list of some of the more common tax deductions that can help you to achieve the best tax return possible.

Equipment & tools

You can claim a deduction for a portion or all of the cost of equipment and tools that you have bought for your job. If an item costs less than $300, you can claim a deduction for the full amount, provided that it is not part of a set that costs more than $300.
If an item costs more than $300, you can claim a deduction for the cost over the life of the item. This includes if it is part of a set that together costs more than $300. 

Motor vehicle expenses

You can only claim a deduction for a motor vehicle if it has been used to perform work-related duties. Work-related duties generally do not include your regular travel between home and work. There are some exceptions, so it is best to visit the car expenses section of the ATO’s website for further information. Some examples of work-related duties include:

  • travelling to various job locations throughout a single day
  • picking up supplies
  • meeting with customers
  • travelling to and from your GTO or RTO for off-the-job training

There are two methods for claiming car expenses:

1. Logbook method
Using a logbook enables you to claim a percentage of all your vehicle expenses (registration, fuel maintenance etc.) The logbook method works by recording both the private and work-related travel in your vehicle for a 12-week period. The logbook is used to calculate what percentage of your vehicle is used for business purposes.
It's important to note that you cannot claim capital costs, such as:

  • the purchase price of your car
  • the principal on any money borrowed to buy it
  • any improvement costs (for example, adding paint protection or tinted windows)

2. Cents per kilometre method
The rate under the cents per kilometre method is 72 cents. You are able to claim a maximum of 5,000 work-related kilometres annually. To work out your deduction, calculate the number of work-related km’s you have travelled and multiply it by 0.72. For example, if you were to travel 2,000 work-related km’s between July 1 – June 30 2022, you would calculate 2000 x 0.72 giving you a deduction total of $1,440.
It's important to note that you may be required to produce evidence to support how you worked out your business kilometres.

Please note that if your vehicle has a carrying capacity of one tonne or more, such as a panel van or ute, you can't use the cents per kilometre method or the logbook method. to calculate your claim. You can claim the actual costs you incur for the work-related use of your vehicle.

Self-education expenses

If you are paying for your own apprenticeship or traineeship, you can claim the fees as a work-related self-education expense. If your employer is paying for your apprenticeship outright or is reimbursing you upon completion of your course, you aren’t able to claim a deduction. Detailed information can be found here: Self-education expenses.

Clothing expenses

If your employer requires you to wear a distinct uniform to work, you are able to claim deductions for buying and cleaning your uniform. This also extends to protective clothing you might be required to wear (hi-vis vests, earplugs, face shields, hard hats etc.) More information can be found here: Clothing, laundry and dry-cleaning expenses.

The ATO has many fantastic resources available to help you navigate your way through understanding tax. Their occupation and industry specific guides provide comprehensive information to help you work out:

  • income and allowances you need to declare
  • work-related expenses you can claim as a deduction
  • records you need to keep

Keeping your records

It is very important to maintain up-to-date records of your deductions so that you can claim back all of the money that you’re entitled to, meaning you don’t pay any more tax than is required.
It’s equally important to have maintained your records in the event where the ATO ask you to produce evidence to support any claims. Having all of your records at your disposal will help you or your tax adviser to prepare your tax return.

Using myDeductions in the ATO app is an easy and convenient way to keep your records in once place. You can record:

  • expenses and deductions
  • vehicle trips
  • photos of your invoices and receipts

Need help with your tax?

It’s as important as ever for apprentices and trainees to understand how best to prepare tax returns to avoid penalties and leaving money on the table! If at tax time you find yourself in need of information or assistance with your tax return, you can utilise the ATO’s Tax Help service, which is a free and confidential service.