Draft Taxation Determination

TD 93/D60

Income tax: is an employee entitled to a deduction for work-related expenses reimbursed by his or her employer?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 93/145.

FOI status:

Preamble

1. No. An employee is not entitled to an income tax deduction for that part of an expense that is reimbursed.

2. Where an employee is reimbursed for deductible work-related expenses and the reimbursed amount is not included in the employee's assessable income, section 51AH of the Income Tax Assessment Act 1936 applies to reduce the amount of the expense allowed or allowable as a deduction to the employee by the amount of the reimbursement payment. However, section 51AH does not apply to reduce a deduction for depreciation (see Draft TD 93/D59).

Examples:

1. Employee Y is a member of a work-related professional association and pays an annual membership fee of $200. Y's employer reimburses her for the full amount of the fee. The deductible amount of the membership fee would be reduced to nil.

2. Employee Z pays an annual membership fee of $200 to a work-related professional association.

Z is reimbursed $50 of the fee by his employer. Z would be entitled to a deduction for the unreimbursed amount i.e $150.

Commissioner of Taxation
4 March 1993

References

BO CAN AC 752 Pt 6

Related Rulings/Determinations:

Draft TD92/D59

Subject References:
employment-related expense
reimbursement
work-related expenses

Legislative References:
ITAA 51AH