Amounts you do and don't include
You must include all the income you receive during the income year as an employee in the real estate industry in your tax return, this 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 your salary and 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, mobile phone allowance
- as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, working in extreme weather conditions
- 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 |
Health and safety representative Working in extreme weather conditions |
No These allowances don't help you pay for deductible work-related expenses |
|
An amount for certain expenses |
Mobile phone 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 allowable
Mark is a real estate agent and is the health and safety representative for his office. Mark's employer pays him an allowance for each week during the year that he holds that position.
At the end of the income year, his employer reports the allowance on his income statement.
Mark must include the amount of the allowance in his tax return, but he can't claim a deduction for any expenses against the allowance.
The allowance compensates Mark for his special additional duties. It is not to cover any expenses he might incur.
End of example
Example: allowance assessable, deduction allowable
Ronaldo is a property manager. His employer requires him to wear a compulsory uniform which he must buy, launder and repair.
Ronaldo's employer pays him a uniform allowance which is shown on his income statement. Ronaldo regularly washes his uniform and in winter, he has his jacket dry cleaned.
Ronaldo must declare the uniform allowance as income in his tax return.
Ronaldo can claim a deduction for cost of buying, laundering and dry cleaning his compulsory 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.
Example: reimbursement of mobile phone expenses
Michelle is a property management agent. Michelle uses her own phone for work purposes. At the end of each month, Michelle highlights the work phone calls on her bill and lodges a reimbursement claim with her employer. Michelle's employer reimburses her for the cost of her work phone calls.
Michelle doesn't include the amount of the reimbursement as income in her tax return and she can't claim a deduction for the cost of her work-related mobile phone expenses.
End of exampleFind out about real estate employees':