What Work Expenses Are The ATO Targeting This Year?

What Work Expenses Are The ATO Targeting This Year?

Each financial year, the Australian Taxation Office pays special attention to certain work expenses as it attempts to flush out people deliberately rorting the system. In 2015, the ATO adopted a broad targeting strategy to ensure deductions were appropriate. This year, it’s going after particular work expenses — and you’re probably claiming at least one of them.

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While the ATO checks for all illegitimate claims at tax time, certain expenses are put under the spotlight. This year, the ATO announced it would be targeting rental property owners (e.g. — excessive deductions for rental properties and holiday homes) and expenses relating to cars, mobile phones, broadband and travel.

If you claim any of the above work expenses, it’s imperative to keep detailed records and secure the backing of your employer. For example, the ATO expects motorists to keep logs of distances travelled for work and will also contact employers to corroborate expenses. Simply providing a fistfull of petrol receipts may not be enough to satisfy an audit.

In addition to the above, the ATO will also be looking for expense claims that are much higher than other people in the same occupation. If your work expenses are significantly higher than in previous years, you might want to seek advice from an accountant prior to filing your tax return.

Remember: for a work expense to be claimable, you need to have spent the money yourself and not been reimbursed by your employer. Obviously, it must also relate to your job and you need to keep a record to prove it.

If you don’t want an unpleasant phone call from the tax man, be honest — and keep your receipts.

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  • I thought there was a threshold for KM’s and work travel? Eg traveling from site to site under 5000 km/year did not need receipts. True, or am I’m crossing all my digits that I don’t get audited in the next couple of years?

    • From the ATO website:

      Cents per kilometre method:

      “You can claim up to a maximum of 5,000 kilometres. You don’t need written evidence but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of work-related trips)”

      Logbook method:

      “You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.”

      • This concerns me a little.

        Submitted my tax return a while back using a well known online accountant.
        They had put 5k down for kms traveled.

        I commute to a client site everyday, though I have been here for several months now, am I in the okay lol?

        The only evidence I would have is confirmation from corporate and the client site I visit :S.

        • ATO: How did you work this out?

          YOU: I travel to this site every day. The distance is x km. I multiplied that by the number of working days this year.

  • Is the fact all my targeted advertising is for rubbish I price matched for work sufficient proof of using my mobile data?

  • Is it likely you’ll get the dreaded phone call if you’ve always claimed around the same amount? I’ve been slack in record keeping.

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