Within Australia, the mining boom of the last two decades have seen many people take up Fly-In Fly-Out, or FIFO, work.
These unique work opportunities are often regional, intensive and high impact on the lifestyle of each worker. FIFO workers also need to be aware of several tax rules and deductions applicable to their FIFO tax situation.
Remember – keep your records! Maintaining the good habit of keeping receipts, invoices, and bank statements for work-related expenses can make your tax return easier. These records can be kept electronically or physically, depending on your preference.
If you’re not sure whether a purchase is deductible, keep the record of it anyway and consult a professional at tax time.
As a fly-in fly-out worker, you are unable to claim expenses incurred between your home and departure spot nominated by your employer. If you’re required to move to an employment site, you are also unable to claim relocation expenses.
As a regular work traveller, however, you can claim tax deductions off the cost of your luggage. This includes items like travel bags, suitcases, luggage trolleys and overnight bags that are under $300. If a purchase if over $300, you can claim a deduction for the depreciation of the luggage price only.
FIFO workers can claim a tax deduction for clothing related primarily to your work, or the environment in which you work. You can claim on compulsory items like uniforms and protective gear not provided by your employer, such as overalls or steel-capped boots.
You can also claim deductions on the cost of laundering those items. Equipment associated with your work can also be claimed too – items like gloves, goggles, masks, boots or cold weather gear.
Fly-in fly-out workers can claim immediate tax deductions for tools or equipment that cost less than $300. If the purchase is above $300, you can only claim the value depreciation of the item each year. You can claim related items such as organisers, laptops, mobile phones, GPS units or tablets and their carry cases too. Similarly, work-related materials like books, magazines or journals are deductible too.
Many FIFO workers require special licenses to operate various kinds of machinery other than a typical drivers license. The cost of renewing that license or ticket is deductible if it is required for your current role. Note, the initial cost of acquiring that ticket or license is not deductible.
If your FIFO position requires a medical exam, drug or alcohol testing, the cost you incur obtaining these will typically be tax deductible.
Due to the nature of fly-in fly-out work industries, such as mining, oil and gas, often workers may gain further industry education. While you cannot claim for pre-vocational courses, you can claim self-education expenses for short, TAFE or university courses if they relate to your current work (only if not reimbursed).
In a similar vein, if your position requires you to attend seminars or courses away from your usual workplace, you can usually claim FIFO tax deductions for the cost of travel, meals and accommodation.
Need help figuring out your FIFO tax return?
With so many technicalities and rules relating to the unique circumstances of Fly-in Fly-out work, it is best to get help.
The professionals at TaxReturn.com.au are dedicated to making tax returns simple and easy for every one of our clients.
Each year, we help countless FIFO workers maximise their tax deductions, so get in contact today!