Clothing deductions hung out to dry
Aspen Corporate • 26 August 2018

Clothing deductions hung out to dry

The Australian Taxation Office is closely examining work-related clothing and laundry expense claims of taxpayers submitting their 2017-18 tax returns.

The ATO says that clothing claims are up nearly 20% over the last five years with people either making mistakes or deliberately over-claiming. Common mistakes include people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated.

"Around a quarter of all clothing and laundry claims were exactly $150, which is the threshold that requires taxpayers to keep detailed records. We are concerned that some taxpayers think they are entitled to claim $150 as a 'standard deduction' or a 'safe amount', even if they don't meet the clothing and laundry requirements," Assistant Commissioner Kath Anderson said.

While this particular announcement focuses on clothing related expenses, it has been clear for some time now that the ATO is paying very close attention to work related expenses in general. All claims should be supported by evidence – just in case the ATO decides your claim requires closer scrutiny. We have heard of a number of real life examples in the last year or so where the ATO has queried and challenged very small deduction amounts which could not be supported by appropriate evidence.

What can I claim?
You can only claim a deduction for the cost of buying and cleaning:

  • Occupation-specific clothing - for example, the checked pants a chef wears.
  • Protective clothing – fire-resistant and sun-protection clothing, safety-coloured vests, non-slip nurse's shoes, rubber boots for concreters, steel-capped boots, gloves, overalls, and heavy-duty shirts and trousers, and overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes during your income-earning activities, and
  • Unique, distinctive uniforms – clothes that are designed and made for the employer and not publicly available - like shirts with the company logo.

Just because your employer requires you to wear a suit, this does not mean you can claim the cost of the suit or its cleaning.

If you claim a $150 on clothing and laundry expenses, just be aware that you might be asked to prove these expenses.

by Aspen Corp 2 July 2025
From 1 July 2025, ATO debt may cost you more. Two types of interest charges on Australian Taxation Office (ATO) debt will no longer be deductible.
by Aspen Corp 2 July 2025
Division 296 super tax is the Federal Government proposal to impose an extra 15% tax on total superannuation balance earnings over $3 million.
by Aspen Corp 2 July 2025
The rise of Financial Influencers or ‘Finfluencers’ - the risks of taking advice from unqualified sources can have serious consequences.
by Aspen Corp 2 July 2025
Trust structures have been prized for asset protection and flexibility with income distributions. However, with regulatory changes and mounting administrative complexity has the shine worn off?
by Aspen Corp 2 July 2025
What does the One Big Beautiful Bill mean for Australian investors, especially super funds and small businesses with US exposure?
by Aspen Corp 17 June 2025
If you are involved with running a not for profit (NFP) organisation it is important to be aware of key obligations and requirements.
More posts