Amounts you do or don't include
You must include all the income you receive as a pilot during the income year in your tax return, which includes:
- salary and wages, including cash or bonus payments
- allowances
- compensation and insurance payments – for example, payments made under an income protection insurance policy to replace salary and wages.
Don't include as income any reimbursements you receive.
Your income statement or a payment summary will show all your salary, wages and allowances for the income year.
Allowances
You must include all allowances your employer reports on your income statement or payment summary as income in your tax return.
An allowance is where your employer pays you an amount as an estimate of costs you might incur:
- to help you pay for a work expense – for example, uniform and cap
- as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, night-time operations
- as an amount for having special duties, skills or qualifications – for example, first aid qualifications.
Your employer may not include some allowances on your income statement or payment summary. Find out about declaring income and claiming deductions for Allowances not on your income statement.
Allowances not on your income statement or payment summary
If you receive an allowance from your employer, it does not automatically mean you can claim a deduction.
Your employer may not include some allowances on your income statement or payment summary, you will find these amounts on your payslip. You don't need to declare these allowances as income in your tax return, unless you're claiming a deduction. Examples include travel allowances and overtime meal allowances.
If you spend the allowance amount on work expenses, you:
- don't include it as income in your tax return
- can't claim any deductions for the work expenses the allowance covers.
If you're not claiming a deduction, you don't need to keep any records of the amounts you spend.
If you spend your allowance on a deductible work-related expense, to claim a deduction you:
- include the allowance as income in your tax return
- include a claim for the work expenses you incur in your tax return
- must have records of your expenses.
If you can claim a deduction, the amount of the deduction is not usually the same amount as the allowance you receive.
Allowances and claiming a deduction
The following table sets out allowances you may receive and when you can claim a deduction.
|
Reason for allowance |
Example of allowance type |
Deduction (Yes or No) |
|---|---|---|
|
Compensation for an aspect of your work that is unpleasant, special or dangerous or for industry peculiarities |
Night operations allowance Location allowance |
No These allowances don't help you pay for deductible work-related expenses |
|
An amount for certain expenses |
Telephone allowance |
Yes If you incur deductible expenses |
|
An amount for special skills |
A first aid certificate |
Yes If you incur deductible expenses |
Example: allowance assessable, no deduction allowed
Archie pilots' aircraft carrying freight. When Archie is required to load and unload the freight, his employer pays him a duty allowance.
At the end of the income year, Archie's employer shows the duty allowance on his income statement. Archie must declare the duty allowance as income in his tax return.
Archie can't claim a deduction as the allowance is for Archie undertaking additional duties. It is not to help pay for any work-related expenses that Archie might incur.
End of example
Example: allowance assessable, deduction allowed
Wendy pilots a narrow body passenger aircraft. When she reports for duty, she must be wearing her compulsory uniform. Although Wendy is provided with the uniform, she is responsible for laundering it.
Wendy's employer pays her a laundry allowance that is shown on her income statement at the end of the income year.
Wendy must declare the laundry allowance as income in her tax return however, she can also claim a deduction for the cost of laundering her uniform.
End of exampleReimbursements
If your employer pays you the exact amount for expenses you incur (either before or after you incur them), the payment is a reimbursement.
A reimbursement isn't an allowance.
If your employer reimburses you for expenses you incur:
- you don't include the reimbursement as income in your tax return
- you can't claim a deduction for them.
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