The hospitality industry is undoubtedly a busy area to work in. It doesn't matter if you are a waitress, chef, event manager or mixologist; endless days and hours of receiving orders, serving customers or rattling pans and pots in a cafe or restaurant can be exhausting. Fortunately, you can get a reward for your efforts during tax time through common tax deductions.
When it's time for tax returns, we all know it can seem like a chore. Gathering the right documents, organising receipts, and calculating what you can and cannot claim may seem like an arduous task.
However, what can you do to ensure that you are prepared for the work-related purchases you have made over the past 12 months? To be ready, you must have performed a proper tracking of payments you have made during the year and clearly understand what you can claim.
Tax deductions for hospitality industry workers are a great way to get back some of your hard-earned money. However, this is only possible if you know the correct deductions to look out for based on your job in the hospitality industry – people in the hospitality sector can make legitimate deductions when it comes to tax. The following are some areas where the deductions are possible;
Tools and equipment
One area where you can get a tax refund as a worker in the hospitality industry is purchasing tools and equipment relevant to your job or work. Essential areas to note include the following;
- Depreciation of equipment costing over $300
- The purchase cost of equipment used in the position or workplace, such as knives, computers, tools, cocktail mixers, etc
- Repair and maintenance costs of work-related equipment
- Interest on loans taken out to purchase work-related equipment
- Leasing costs of equipment used in the job
Of the diverse range of deductions, this is perhaps the most important and well known. We are aware that the hospitality job often requires the use of protective clothing. You can get a tax deduction or refund when you take note of these and understand them properly before making your tax calculations. This means that you stand to get a tax refund or claim purchase costs, maintenance and laundry of the following;
- Work specific clothing such as chef's jackets, chef pants and aprons.
- Uniforms which have a logo, or if an item forms part of the compulsory uniform
- Protective clothing such as boots, gloves or aprons
Note that you cannot claim for conventional clothing such as black shoes or plain white shirts. This is because the wearing of these items is not limited to the workplace alone.
If your hospitality job requires you to travel to conferences or trade fairs, or you are required to travel for training as part of the job, then you can claim a tax refund on your expenses that include;
- Overnight accommodation
- Car hire
- Taxi, train or bus fare
- Flight costs
- Meals (applicable if you are staying overnight)
Also, note that your employer may allow you to cover the cost of any work-related travel. On that note, it will be included as income on your payment summary at the end of the financial year. It would help if you also had this in your tax return; however, you will not need to substantiate your expenses as long as you hope to claim a reasonable amount by the ATO.
Additionally, if you are using your car for work purposes like deliveries or pick up, you can claim car expenses in either of these two ways;
- Logbook method. This method involves keeping a record of work-related mileage in a logbook for at least three months.
- Cents per kilometre method. This method involves claiming 66cents per kilometre. This can be up to 5000 kilometres per year.
If the education or self-education is directly linked to your current position at your workplace, the expenses that you can lay claim to include;
- Associated phone and internet subscription fees
- Tuition fees
- Travel costs
- Accommodation and meals, provided you stay away from home overnight
- Books and study materials purchased for the study, which can include textbooks and software
Finally, you cannot claim self-education expenses if you intend to get the following;
- Money from a new income-earning activity like a new job or business
- A new or different job
As a bonus, there are additional deductions you can claim. Some of these deductions are missed out on by a lot of people, and they include;
- Work-related calls
- Cost of renewing a license and other work-related licenses or certificates
- Work bags
- Journals and publication relating to your position or job
- Income protection insurance
Take advantage of the provided tax deductions and maximise your spending.