As FIFO workers, the last thing you want to be thinking about during your time off is taking care of your taxes. However, your taxes must be done right, to avoid an extreme hassle down the track.
The Premium Mechanical team has put together some valuable tax-time information regarding FIFO tax claims and offsets, the remote zone area rebate, and ATO FIFO deductions, to help you stay on top of your taxes.
FIFO Tax Claims
It is important to be aware of what you can and cannot claim as a FIFO tax deduction. Having this information under your belt will make organising your tax returns a much smoother process.
- You can claim the expenses that arise with regular travel for work – such as the cost of buying luggage. However, for luggage expenses over $300, you can’t claim the total purchase price, only a deduction for the luggage’s depreciation.
- You cannot claim travel expenses for transport from your home to the airport. (E.g. for the Uber to the airport)
- You cannot claim relocation expenses if you are required to move closer to your worksite. However, some organisations over relocation packages.
Equipment and Tools
- You can claim the expenses of equipment and tools essential to your role, under $300.
- For equipment and tools over $300, you can claim a deduction for the amount that the items depreciate each year.
- ‘Tools and equipment’ may also include:
- Laptops or tablets and all related accessories
- Mobile phones and associated accessories
- GPS units and all related accessories
- Diaries and organisers
- Journals, magazines or books essential to your role
Licenses and Tickets
- You can claim the cost of obtaining or renewing a license to operate machinery essential to your role. For example, you can claim the cost of obtaining a forklift license. This doesn’t usually include drivers licenses.
- You cannot claim parking or speeding tickets/fines as a tax deduction.
Phone and Internet
- You can claim the cost of your phone calls/text messages/data usage if it is essential to your role. For example, if it is necessary to contact your workplace when you are offsite or work on-call shifts, you can claim your phone bill’s expenses that pertain to work.
- You can claim the cost of your internet bill if it is essential to your role that you have access to the internet from your home. This may be the case if you are working from home, need to communicate via the internet using video chat, or are undertaking online education from home.
- You can claim self-education expenses for university or TAFE courses if they are useful to your current role, and as long as you aren’t being reimbursed for them by your employer or a government program.
- You can claim expenses related to travelling to go to the education site, if on-site learning is required, away from your usual workplace. This may include transportation, meals and accommodation.
- You cannot claim pre-vocational courses. Check with your employer or your educational institutional to determine whether or not your course is considered pre-vocational.
Physical Examinations and Drug/Alcohol Testing
- You can claim the cost of physical examinations by a doctor, required to make you eligible to work.
- You can claim the cost of having a drug or alcohol test for work.
- You can claim a deduction for expenses relating to the clothing required for work. For FIFO workers, this may include uniforms, high-vis gear, protective gear (such as hats, gloves, safety goggles or sunglasses) and work boots.
- You can claim a deduction on laundry expenses for work clothes only.
- You cannot claim a deduction for ordinary clothing. For example, if you wear jeans and the company uniform of a polo shirt with the logo on it – you can claim the expense of the shirt, but not your jeans.
Keep Records of All Your Expenses
Be sure to keep records of everything you intend to claim as a tax deduction throughout the financial year. This means keeping all documents (as physical or electronic copies) that prove that you undertook the expense. This may include receipts, invoices or bank statements. If all of your records are kept in an organised way, the entire process of claiming your taxes will be much quicker and less stressful.
Try using the myDeductions app provided by the ATO, to make the process of keeping track of your expenses more manageable.
If you are unsure whether you can claim something or not, take a look at the Deduction for Mining Site Employees ATO website, for an even more comprehensive list of what you are allowed to claim as a FIFO worker.
Remote Work and Zone Tax Offset
What is a FIFO zone tax offset?
Living in a remote area can often mean you face higher living expenses, isolation, and unpredictable or uncomfortable climate conditions. A zone tax offset, also known as a zone rebate, compensates workers for living and working in remote locations. The zone rebate essentially reduces the amount of tax payable on your taxable income.
A FIFO worker is only eligible for the zone tax offset if they work in the remote area for over 183 days of the financial year (over 50% of the year). Those working on an offshore gas or oil rig will not be eligible for a zone tax offset. To learn whether your workplace location makes you eligible for a zone tax offset, speak to your employer, and visit the ATO website.
If your home is in a different zone than your workplace, yet both locations are considered eligible for the zone tax offset, you will receive the zone tax offset entitlement connected to your home.
Premium Salary Sacrifice Program
What is a Salary Sacrifice Program?
A Salary Sacrifice Program, also known as a salary sacrifice arrangement or total remuneration package, is an agreement between the employer and employee that the employee will forgo part of their future entitlement to wages, in return for benefits of a similar value. See the specific rules surrounding Salary Sacrifice Programs in Australia on the ATO website.
Salary Sacrificing Programs may sound daunting or confusing. It is important to remember that you aren’t actually missing out on any of your salary. Essentially, your employer pays you the same wage. However, rather than paying all your expenses after you’ve done your taxes, you pay for certain expenses before the tax is taken out. This may mean that your taxable income is actually lower, and in the end, you pay less tax.
What does the Premium Salary Sacrifice Program cover?
Many businesses with FIFO employees offer salary sacrifice programs. Premium Mechanical aims to make tax time as straightforward as possible for our workers, and have had great success with our Premium Salary Sacrifice Program. Our program covers:
- Laptops, Tablets, Mobile Phones
- Interstate flights, airport lounge memberships
- New and used vehicles
- Financial advice on packaging options
- Subscriptions, self-education/courses
- Income protection insurance
- Interest-only investment loans
- Work-related expenses
Premium Mechanical also offers Relocation Salary Packaging. This may include removalist costs, the connection of utilities, and transportation costs.
Seek Professional Financial Advice
It is important to note that this blog is purely for informational purposes, and the legislation and regulations surrounding tax offsets, deductions and claims are subject to frequent change.
Therefore, it is essential that you consistently check the Australian Tax Office Website for the most recent information. The ATO have a specific webpage pertaining to Mining Site Employees and Work Related Deductions, linked here.
Please seek independent advice from a tax accountant or relevant financial professional for further clarification.
FIFO Support at Premium Mechanical
At Premium Mechanical, we are dedicated to finding solutions for our clients, candidates and employees. Our team is always open to answering any question you may have about managing all aspects of the FIFO lifestyle.
Premium Mechanical also provides extensive financial advisory services through our trusted partner company. If you are after more detailed advice or specific guidance, we can connect you with the experts.
For more information about the FIFO opportunities that Premium Mechanical have on offer or the resources available for FIFO workers, please do not hesitate to call us on 08 9314 7182 or visit the Jobs webpage on our website.
This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, financial, or any other professional.