This question is about self-education expenses that are related to your work as an employee, and that you incur when you do a course to get a formal qualification from a school, college, university or other place of education.
To claim a deduction for self-education expenses, you must have met one of the following conditions when you incurred the expense:
- the course maintained or improved a skill or specific knowledge required for your then current work activities
- you could show that the course was leading to, or was likely to lead to, increased income from your then current work activities, or
- other circumstances existed which established a direct connection between the course and your then current work activities.
You cannot claim a deduction for self-education for a course that:
- relates only in a general way to your current employment or profession, or
- will enable you to get new employment.
The law has been changed so that, for the 2012 year and later years, you cannot claim a deduction for study expenses you incur that relate only to your receipt of Austudy, ABSTUDY and Youth Allowance.
Example
Louis is a computer science student. His studies are focused on system analysis, software design and programming. Louis also works at the university laboratory installing computers. His course and job are only very generally related. The work only requires a low level of computer knowledge which Louis already had before starting his employment.
The high-level professional skills Louis acquires from the course are well beyond the skills required for his current employment. Consequently Louis cannot claim a deduction for his course because it:
- does not maintain or improve his specific knowledge or skills in his current job
- relates in only a general way to his current employment, and
- will enable him to get new employment.
If, when you incurred your expenses you satisfied the conditions necessary to claim a deduction, you can claim the following:
- your tuition fees payable under FEE-HELP (FEE-HELP provides assistance to eligible fee-paying students, who are not supported by the Commonwealth, to pay tuition fees)
- your tuition fees payable under VET FEE-HELP [VET FEE-HELP provides assistance to eligible full-fee paying students doing vocational education and training (VET) accredited courses with an approved VET provider]
- self-education expenses you paid with your OS-HELP loan (OS-HELP is a loan to cover expenses for eligible Commonwealth supported students who wish to study overseas towards their Australian higher education award)
- the cost of your meals during temporary overnight absences from home to participate in self-education
- your other expenses such as textbooks, stationery, student union fees, student services and amenities fees, course fees, and the decline in value of your computer (apportioned depending on private use and use for self-education)
- expenses for your travel in either direction between:
- your home and your place of education
- your workplace and place of education.
Only the first leg of the trip is deductible if you went from home to your place of education and then to work, or the other way around.
You cannot claim contributions you, or the Australian Government, make under HECS-HELP or repayments you make under the Higher Education Loan Program (HELP) or the Student Financial Supplement Scheme (SFSS).
Do not include at this item deductions for the cost of:
- formal education courses provided by professional associations
- seminars, education workshops or conferences connected to work.
Include them at item D5 - Other work-related expenses.
Did you have any of these expenses?
NO |
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YES |
Read below. |
Answering this question
To complete this item you will need written evidence. For more information about what is written evidence, see Keeping your tax records.
You can use the self-education expenses calculator to work out your claim, then go to step 4 under Completing your tax return. Otherwise, follow the instructions below.
To work out the deduction you can claim at this item for car and travel expenses, see question D1 - Work-related car expenses and question D2 - Work-related travel expenses.
If you received assessable income from your work as an employee outside of Australia that is shown on a PAYG payment summary - foreign employment, you must claim any work-related self-education expenses you incurred in earning that income at this item.
If you received assessable foreign income that is not shown on a PAYG payment summary - foreign employment you must claim your deductions against that income at item 20 - Foreign source income and foreign assets or property.
Completing your tax return
To complete this item, you must add up your self-education expenses under the following categories because, in working out what you can claim, certain costs are reduced by $250.
Worksheet |
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Category |
Your amount |
|
A |
General expenses that are deductible, including textbooks, stationery, student union fees, student services and amenities fees, course fees and public transport fares. Also include car expenses (other than the decline in value of a car) worked out under the 'logbook' or 'one-third of actual expenses' method. For more information, see question D1 - Work-related car expenses. |
$ |
B |
Deductions for the decline in value of depreciating assets used for self-education, including computers and cars for which you are claiming deductions under the 'logbook' or 'one-third of actual expenses' method. |
$ |
C |
Expenses for repairs to items of equipment used for self-education. |
$ |
D |
Car expenses related to your self-education for which you are claiming deductions under the 'cents per kilometre' or '12% of original value' method. (If you have included deductions for the decline in value of or repairs to your car under category B or C, you cannot claim car expenses under this category.) |
$ |
E |
Self-education expenses that are not deductible, which are:
Do not include contributions you made under HECS-HELP or repayments under HELP or SFSS. |
$ |
Use the amounts you have written in the worksheet above to complete the steps that follow.
Step 1
If you had any category A expenses, go to step 2. Otherwise, read on.
Add B, C and D. |
$ |
(f) |
Transfer the amount at (f) to D item D4. Go to step 4.
Step 2
Add C, D and E. |
$ |
(g) |
If the amount at (g) is less than $250, go to step 3. Otherwise, read on.
Add A, B, C and D. |
$ |
(h) |
Transfer the amount at (h) to D item D4. Go to step 4.
Step 3
Take the amount at (g) away from $250. |
$ |
(i) |
Take the amount at (i) away from your category A amount. If the result is zero or less, write 0 at (j). |
$ |
(j) |
Add B, C and D. |
$ |
(k) |
Add (k) and (j). |
$ |
(l) |
Transfer the amount at (l) to D item D4.
Step 4
Select from the list below the code letter that best describes your self-education.
K |
At the time you incurred the expense the study maintained or improved a skill or specific knowledge required for those work activities. |
I |
At the time you incurred the expense you could show that the study was leading to, or was likely to lead to, increased income from those work activities. |
O |
At the time you incurred the expense, other circumstances existed which established a direct connection between your self-education and your work activities as an employee. |
Step 5
Print your code letter (K, I, or O) from step 4 in the CLAIM TYPE box at the right of D item D4.
More information
For more information, see:
- Guide to depreciating assets 2012 (NAT 1996) about deductions for decline in value, balancing adjustments and immediate deductions for certain depreciating assets
- Taxation Ruling TR 98/9 - Income tax: deductibility of self-education expenses incurred by an employee or a person in business.
Tax tip
To make working out your deductions easier next year, start keeping your records now. For more information, see Keeping your tax records.
Where to go next
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