Tax Returns for Fly-In and Fly-Out Workers
Fly-in Fly-out (FIFO) workers in Australia are subject to special tax rules and deductions that can help you save significantly. Here is a summary of the key points you need to be aware of.
REMOTE WORKERS – ZONE TAX OFFSET
If you live or work in a remote or isolated area of Australia (excluding offshore oil and gas rigs) for at least half of the tax year, you may be eligible for a “zone tax offset”. Zone Tax Offsets help compensate remote workers with the high living costs associated with isolation and uncongenial climates.
It is important to keep in mind FIFO and DIDO (drive-in drive out) workers are not included in the Zone Tax Offset when their normal residence is not within a zone, as of July 1, 2015.
You are eligible for the zone tax offset if you reside or work in a specified remote area for more than 183 days in the tax year.
If you are a FIFO worker and your normal residence is in a different tax zone than your work zone, you will retain the zone tax offset associated with your normal place or residence.
To make sure you are properly taking advantage of the Zone Tax Offset, and determine which zone you live and work in, contact one of our specialists.
Example 1: If you work in a prescribed tax zone for more than 183 days in the year, but your home address is not eligible for the Zone Tax Offset, you will be unable to make a claim.
TRAVEL
Under FIFO arrangements, your employer must nominate a departure spot (such as an airport) and you can not claim travel expenses between your home and that spot. If you are required to move closer to a new employment site you also cannot claim relocation expenses.
However, as a regular traveler for work you can claim a deduction for the cost of your luggage, including travel bags, suit packs, suitcases, overnight bags and luggage trolleys. Individual items or luggage sets more than $300 are not entirely claimable. Instead, the amount of depreciation is calculated and used as your claim.
WORKING OFFSHORE
Australians are subject to a worldwide income tax. Flying to and working in an international site will still subject your income to Australian tax law. The tax laws of the foreign country you are in also need to be considered. Because everyone’s situation is unique, speaking to an Australian tax law specialist is recommended so you properly set up your affairs and maximize the income you keep.
The cost of your visa, vaccination, and other international travel expenses should be deductible if your main residence is in Australia but you work overseas.
PHONE AND INTERNET
Work related phone calls and handset rentals can be claimed if you are on-call or required to phone your employer while away from your workplace. An accurate deduction must be calculated by dividing costs into work and private use. A portion of your internet fees are claimable if you need to be available through email or if you do online training from home.
CLOTHING
Clothing is deductible if it relates solely or primarily to the work you do or the environment you work in. Compulsory uniforms and protective gear fall within this category if you have to purchase it yourself. Laundry costs associated with work uniforms and protective clothing is also claimable.
Other deductions include equipment your employ might not provide such as gloves, masks, winter jackets, goggles or rubber boots.
Normal everyday clothing items can not be claimed. Sunglasses, sunscreen, hats and other outdoor items are claimable if you work outside or drive a vehicle outside. Individual items costing $300 or more can not be claimed in full, and must instead be written off over several years as they depreciate in value.
TOOLS AND EQUIPMENT
Tools and equipment costing less than $300 is claimable immediately in full. An item which costs more than $300 is claimable over several years, with the deductible amount equal to the amount of depreciation in that year. Organisers, tablets, laptops, GPS units, mobile phones, accessories, carrying cases, protective cases, work related books, magazines and journals are also all claimable under the same rules.
LICENCES AND TICKETS
The cost of renewing a licence related to operating special machinery is deductible as long as it is required by your current job. The cost of obtaining the original license and regular drivers licences are not deductible.
SELF EDUCATION
Prerequisite courses for employment are not deductible. However, self-education expenses such as university or TAFE courses can be claimed if they are related to your current work and not reimbursed by your employer.
Travel expenses, such as meals and accommodations may be deductible if you are required to attend a course or seminar that is away from your usual place of work.
MEDICAL EXAMINATIONS AND TESTING
The cost of obtaining medical examinations, drug tests, alcohol tests or other medical expenses are deductible if required by your employer.
THE MOST IMPORTANT PART OF MAKING TAX DEDUCTIONS… KEEP GOOD RECORDS!
A wide variety of work related expenses can be written off each year if the proper records are kept. Maintain a journal of work-related activities and expenses, including dates and times and keep copies of receipts, invoices, bank statements and credit card statements. Paper and electronic formats are acceptable. Everyone’s situation is unique and there may be expenses not listed here that you can deduct. Keep your receipts for anything work related, even if you are not sure if they apply. Our specialists will include the eligible expenses when preparing your tax return.