Self-Education Expenses and Deductions

‍If you’re considering up-skilling yourself for your current job or adding to your set of skills so you can improve your income, you’ve generally got the option of deducting the cost to do so.

This kind of deduction is formally called a self-education expense, and the word “generally” is relevant as there are some details to be aware before undertaking such study, which we’ll cover below.

How does it work?

To be eligible to claim a deduction for specific expenses relating to your self-education and study it must first be sufficiently relevant to your employment or earning your income. There are some conditions (direct from the ATOs website) you’ll need to satisfy that would make you eligible, such as:

• You're upgrading your qualifications for your current employment – for example, upgrading to a Masters qualification from a Bachelor qualification.
• You're improving specific skills or knowledge you use in your current employment – for example, a course that will allow you to operate more machinery at work.
• You're a trainee employee and the course you are undertaking forms part of that traineeship – for example, an apprentice hairdresser doing a certificate III in hairdressing which is a compulsory component of their apprenticeship.
• You can show that at the time you were working and studying, your course led, or was likely to lead, to an increase in employment income – for example, a teacher who will automatically get a pay increase as a result of completing the course.

 If however the study you are looking to undertake is only generally related to your employment, then you will not be eligible.

As an example, you are employed as an administrative assistant at a company that sells computers and you choose to study computer science at university. Although the course is generally related to your work, the high-level professional skills you’re learning at university aren’t specifically aligned with your current employment status, leaving you unable to claim the deduction.

If however, you were employed to build computers for the same employer and you selected the same course, you may be able to show that the skills you’re learning will progress your employment, allowing you to potentially even increase your income. 

What can be claimed?

Assuming you meet one of the above eligibility criteria, you’ll be able to claim a deduction for a range of self-education expenses. Including:

• General course expenses like; stationery, internet data usage, student union fees, trade, professional or academic journals
• Fees payable under FEE-HELP, VETStudent Loan (formerly known as VET FEE-HELP), but not the repayments on the loan itself. This doesn't include expenses paid under HECS-HELP, and others – Attune can help you check this and advise you as you plan for study.
• Self-education expenses you pay with your OS-HELP loan
• Textbooks, professional and trade journals
• Stationery
• Photocopying
• Computer expenses (see below)
• Student union fees
• Student services and amenities fees
• Accommodation and meals – when the course requires you to travel and be away from home for one or more nights. You can not claim the cost of accommodation and meals associated with day-to-day living expenses
• Additional running expenses if you have a room set aside for self-education purposes – such as the cost of heating, cooling and lighting that room while you are studying in it
• Allowable travel expenses.

And depending on the amount you use your computer for self-education purposes you could also claim a deduction on interest charged to you on any loans used to buy the computer, repairs as well as depreciation of the cost of the computer.

There is a few more details to self-education expenses that are worth understanding if what you see here doesn’t quite sound like you, so reach out and we can assist in clearing it up for you. One of those is the “$250 reduction in expenses” that the ATO applies depending on how you qualify for the deduction, but we won’t go into that detail here either.

We can discuss the finer points with you as part of helping you manage your strategy for studying and guide you through where expenses can be deducted or excluded.

If you’re interested, you can get started with the ATO’s own Self-education Expenses Calculator.

And, if you’re considering studying while you work and looking at how to claim it as a deduction, then speak with the Attune team first. We can help you put the right strategy in place so you’re in the best position you can be at tax-time. Call us on 1300 866 113 or send us an email to start the conversation.  

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