Retail workers often approach tax time with apprehension and a touch of dread. However, the good news is that if you do your tax deductions for retail workers correctly you could receive a monetary return from the ATO. How can you achieve this? Ensure that every claim you make is legitimate and work with an experienced tax professional who knows how to lodge a retail industry worker tax return.
Our Retail Workers Tax Return and Deduction Checklist
We have created our checklist to help you include all possible work-related expenses in your upcoming tax return.
Currently, thousands of people around Australia are retail workers. If you are a retail industry worker, you will be able to access your ATO income statement, outlining your salary and wages, allowances, and bonuses for the year, directly via your MyGov account. Alternatively, your accountant can access these details for you.
Can Retail Workers Claim Any Deductions?
Retail workers can receive a tax deduction for any amount they spend during the tax year on goods and services directly related to the production of their income. As a retail worker, you need to have personally paid for the goods or services and you must retain a record of the payment, for example, an invoice or receipt.
What Retail Workers Can and Cannot Claim as Tax Deductions
Here are key deductions retail workers can claim:
- The cost of buying and maintaining a compulsory uniform. Or any piece of clothing with a design that an employer has listed with AusIndustry, including any other garment that has the design.
- The cost of meals consumed during overtime work (if you are eligible for an overtime meal budget and if that budget is a part of your reportable income).
- Publications, both technical and professional, relating to your line of work (for example, a health food magazine for a person working in a health food store).
Here are tax deductions retail workers cannot claim:
- Clothing of a particular colour or brand that does not have a company emblem.
- The cost of purchasing meals, snacks, and beverages consumed during the workday.
- Costs connected to personal grooming, including haircuts and cosmetics (even if your profession requires a well-groomed appearance).
Here are additional expenses to use as tax deductions for retail workers:
Meal and Travel
- The cost of taxis, parking, public transport, and tolls, if you need to travel to attend training courses, meetings, and seminars. If you are required to stay away overnight, you could also claim the cost of your accommodation and meals.
- The cost of driving your car as part of work, for example, to pick up supplies or stock for the business, travel between two jobs or stores, or attend meetings.
Work Clothing Expenses
- The cost of dry cleaning or laundry of your work uniforms
- The cost of purchasing any protective clothing or equipment required for working on your business site or in your business shop.
- The cost of work-related training courses, such as OH&S, first aid, customer services, or computer skills courses (not run by a TAFE or University).
- The cost of courses for self-education run by TAFE (including Cert III in Retail) or Universities (not including HECS/HELP fees).
Work Tools and Equipment Costs
- The cost of repairing or buying equipment to use at work, such as laptop computers, tools, and mobile phones.
- The cost of supplies or materials you purchase to use at work, including a diary, stationary or briefcase.
- The cost of sickness and accident insurance premiums or income protection.
- Your tax agent fees.
Factors to Consider: Tax Implications for Retail Workers
You must include all income that you received throughout the tax year in your tax claim for retail workers, irrespective of when you earned the money.
Here are the income details you might need to include:
- Any wages or salary you might have earned as income.
- Any bonuses you could have earned during the year.
- Any allowance you gained to compensate for certain job tasks, or to help to cover specific expenses when you travelled as part of work.
Here are additional income allowances you should include in your tax return:
Allowances an employer pays you based on an estimated figure of what you could spend (for example, cents per km – if you use a vehicle for work). It could also be for the actual sum spent on the expense, after or before you acquire the expense.
Here are other instances where you might receive additional allowances, which you will need to include in your tax return:
- For work that is special, unpleasant, or dangerous
- In recognition of having special skills, including a first-aid certificate
- To compensate for industry oddities, including working on a public holiday.
Your employer might not include certain allowances on your income or payment summary but rather on your pay slips. Such allowances might include overtime meals or travel budgets.
Tax Return Tips for Retail Workers
Tip #1. Retail Workers Must Keep Accurate Records of Their Tax Claims
It is a clever idea to establish a dependable method to help you keep track of your claims and deductions throughout the year. You do not need to retain physical receipts. You can keep digital copies, including email receipts or photos of receipts.
Here are the details that need to be readable on the receipt:
- The supplier’s name.
- The expense amount.
- The type of goods or services.
- The date you paid the expense.
- The date of the document.
You do not need to retain receipts for expenses less than $10 (provided these expenses do not have a total sum of more than $200). Furthermore, you can keep a note of purchases that are difficult to keep receipts for, ensuring that you include the features mentioned above in your notes.
Tip #2. Correct Any Mistakes You Notice on Your Tax Return as Quickly as Possible
To avoid any trouble with the Australian Taxation Office (ATO) and to ensure you will not face the possibility of any criminal charges, you must be careful when supplying accompanying and supporting information for your tax return. Also, make sure you only claim for valid deductions.
If you notice that you have submitted any tax claims that are unsubstantiated or incorrect you should contact your accountant. Your accountant will help you make the required adjustments to your tax return.
Retail employees, including store managers, sales assistants, buyers, and suppliers often wonder what tax deductions for retail they can claim on their annual tax claims for retail workers.
Often workers receive a smaller tax refund than warranted because they do not include all the claimable items.
Carefully keep track of your retail work-related expenses and use our tax return and deduction checklist as a guide, to make sure you receive the tax refund you deserve.