Fly-In, Fly Out staff (FIFO) have an out-of-the-ordinary work association, and with it comes some distinctive questions on what’s deductible at tax time. The character of their job requires FIFO staff work lengthy steady hours with restricted downtime, and when they’re rostered off, it’s comprehensible that FIFO staff need to profit from their time at residence, not waste it attempting to kind out their funds.

Nonetheless, it’s essential to ensure all of the paperwork is with a purpose to really declare all of the tax deductions you’re entitled to in your private tax return this 12 months. File-keeping is important, and being ready forward of time will guarantee you have got all the things you must maximise your tax return in 2022.

Relating to these tough tax preparations, it’s all the time finest to hunt skilled help from an skilled FIFO tax agent and accountant sooner reasonably than later. Having an skilled advise you in your FIFO tax return makes the method quick, simple, and stress-free, whereas additionally ensuring you don’t miss out on potential deductions.

That will help you get began, this listing of tax deductions and customary tax FAQs for FIFO staff will provide you with some useful data on your 2022 tax return. Learn on to be taught extra about which deductions may be accessible to you this 12 months.

2022 FIFO Tax Deductions in Australia

There are a lot of tax deductions accessible to FIFO staff in Australia. For a mean FIFO employee, figuring out which bills are eligible for tax deduction will be fairly difficult, particularly because the rules round travel-related deductions are sophisticated.

It’s essential to notice that in case your employer reimburses your journey prices, lodging or different bills – both earlier than or after the price is incurred – these prices aren’t claimable in your tax return. A reimbursement is a cost that covers the precise price, whereas an allowance is a extra normal cost, and sure bills associated to an allowance could also be deductible.

To ease up the confusion, right here’s an inventory of tax deductions that each one FIFO staff ought to take into consideration when submitting their returns:

Meals

• Sometimes meals are thought-about a personal expense and aren’t deductible, even for FIFO staff.
• Nonetheless, in case you’re within the strategy of work-related journey that isn’t a part of your common FIFO association, your meals could also be deductible as a part of your journey bills.
• In case your employer offers you with a meal allowance beneath an industrial award or settlement, the price of meals whenever you’re working time beyond regulation will be claimed. Notice that you must maintain these claims beneath $31.90 per meal, per day.

Journey

• Journey as a part of your common FIFO association just isn’t a deductible expense for tax functions, together with journey to the airport and the price of flights.
• You may declare journey bills you incurred in case your job requires you to journey quickly to a different location for a gathering, coaching, seminar, or different work-related exercise.
• In case you’re utilizing your private car for work-related functions, you’ll be able to declare the price of car bills. Nonetheless, this doesn’t embody journey to the airport or transit for DIDO staff, which is a personal expense.
• You may declare automotive bills as a tax deduction if, a) you drive between separate jobs on the identical day, or b) drive to and from totally different workplaces for a similar employer on the identical day.
• If you must transport massive and ponderous objects as a part of your job and there’s an absence of safe storage on the work facility, you might be eligible to assert your journey to and out of your lodging and the job website. This additionally applies in case you have shifting locations of employment (ie. no common work website).

Uniform and/or Protecting Clothes

• You may declare the price for getting a piece uniform so long as it has your employer’s brand. Notice that typical clothes equivalent to socks, sneakers, and underwear that you just put on alongside along with your uniform can’t be claimed as work bills.
• Protecting clothes equivalent to security glasses, masks, metal cap boots, gloves, and reflector vests are eligible for tax deductions.
• The price of cleansing, renting, or repairing work-related and/or protecting clothes will be claimed, topic to the next circumstances:
  • if the claims are beneath $150, you don’t must submit written documentation. The ATO approximates the price of laundry at $1 per load of work-related clothes, or 50 cents per load if different non-work-related clothes is included.
  • you must maintain the receipts if you wish to declare for prices associated to dry cleansing and clothes repairs
• In case your employer pays for, offers and/or maintains protecting clothes, these bills should not deductible.
• Sunscreen, sun shades, hats, and different solar safety tools used for work functions are eligible for tax deductions.

Instruments & Tools

• Purchases of work-related instruments and tools amounting to lower than $300 {dollars} is claimable in full. For instrument and tools purchases of greater than $300, you might be required to assert for depreciation over the instrument or tools’s helpful life.
• You’ll want to point out in your declare the proportion of utilization of the instrument or tools for work and personal functions. You may solely declare the proportion for enterprise and work-related functions, so in case you additionally use the instrument or tools privately, that portion just isn’t deductible.
• Examples of instruments and tools which are eligible for tax deduction embody energy instruments, computer systems, cell phones, beacons, GPS tools, first help kits, and security gear, plus circumstances and luggage used to move the gear.

Work-Associated Telephone and Web Bills

• If you must keep in contact along with your employer throughout off durations, a part of your cellphone and/or web bills could also be tax deductible.
• Any requirement to do work or coaching from residence can even make you eligible for deductible web and residential workplace bills.

Different FIFO Work-Associated Tax Deductions

• Charges associated to renewal of licences, permits, card or certificates required to function equipment and tools. Notice that normal driver’s licences should not tax deductible, and getting a equipment licence for the primary time just isn’t lined – solely renewal charges.
• Value of any obligatory medical assessments or examinations, together with drug and alcohol exams. This doesn’t embody pre-employment assessments, although.
• Charges for self-education related to your present employment. This doesn’t embody pre-vocational programs however does embody brief programs, TAFE or college research.
• First help course bills could also be claimed if obligatory or in case you’re a chosen first help individual (except the prices are reimbursed by the employer).

Common Bills

Along with the eligibility talked about above, there are normal tax deductions to think about. These can be found in all Australia, regardless of the occupation or occupation of the FIFO employee:

• seminar and convention charges, and journey to attend them
• buying reference books, manuals, and so on
• skilled publications the place work-relevant
• charges associated to work-relevant self-education (aside from pre-vocational programs)
• tax agent charges
• financial donations to registered charities
• prices associated to revenue safety insurance coverage
• yearly union charges or skilled affiliation charges

Tax Offsets for FIFO Employees in Australia

A tax offset means you pay much less tax in your taxable revenue (complete revenue much less any deductions).

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The quantity of tax offset you obtain relies on the quantity of tax required of you to pay in your revenue. Non-refundable tax offsets, equivalent to these categorised as low and middle-income tax offsets, can scale back your tax payable to zero. Nonetheless, you can not declare for a refund for any unused tax offset quantity. Tax offsets can’t lower your Medicare Levy and Medical Levy Surcharge, which constitutes a 2% surcharge of your taxable revenue.

In case your taxable revenue is $18,200 and also you haven’t paid any tax, then your tax payable is already zero. When you have paid tax, you’ll typically get again the entire tax as a refund. Due to this fact, your tax payable is zero as properly. In each circumstances, you aren’t eligible for tax offset.

Nonetheless, in case your taxable revenue is greater than $18,200, the ATO will discuss with your taxable revenue when calculating the quantity of tax you must pay. Then the offset quantity that you just’re entitled to will probably be deducted out of your payable tax.

Low-Earnings Tax Offset

With this transformation, the next offsets are at present accessible for low revenue staff.

Low and Center-Earnings Tax Offset

The ATO has set the low and center revenue tax offset quantity to a base of $255 and as much as $1,080. Though the complete offset quantity is $1,080 per 12 months, you is probably not entitled to the complete offset quantity. This tax offset is offered for the 2018-19, 2019-20, 2020-21 and 2021-22 revenue years. The worth of the tax offset you’re eligible for relies on elements like your current residing circumstances, taxable revenue, and the quantity of taxes you paid.

Test the desk beneath to find out the quantity of tax offset you’re entitled to as per your taxable revenue:

Zone Tax Offset for FIFO Employees

For staff who dwell in distant or remoted components of Australia, the ATO provides a zone tax offset. This concession offset is designed to assist staff cope up with the excessive price of residing, larger charges of facilities and companies, environmental elements, and different challenges related to residing in distant areas of Australia.

It’s a typical assumption that FIFO staff working in distant areas will have the ability to declare the Zone Tax Offset. Nonetheless, this solely applies to folks whose regular residence falls in one of many designated distant zones. Which means the place you reside throughout ‘off weeks’ must be in a distant zone to qualify for the offset.

Employees on offshore oil or gasoline rigs additionally aren’t eligible for the zone tax offset.

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In case your regular residence is in one of many ATO’s distant zones, then you might be eligible for the Zone Tax Offset, relying on the variety of days per 12 months you spend at residence.

Eligibility for Zone Tax Offset

You’ll want to fulfill some particular standards to qualify for the zone tax offset as a distant employee. As a core requirement, you should be residing in an space labeled by the ATO as distant to be eligible for the zone tax offset. The ATO publishes an in depth Australian zone listing outlining which cities are inside Zone A, Zone B or a Particular Zone.

As well as, you must adjust to any of the next circumstances:

• You lived in a distant zone for 183 days or extra through the 12 months 2019 to 2020, OR
• for 183 days or extra through the interval July 1, 2018 to June 30, 2020, AND
• You haven’t claimed a zone tax offset in your 2018 to 2019 revenue tax return

It’s attainable that you would be able to nonetheless benefit from the zone tax offset in case you’ve resided in a zoned area for lower than 183 days. To be eligible, you must fulfill the entire following circumstances:

• you resided in a zone for a steady interval of lower than 5 years following July 1, 2014
• you lived within the mentioned zone for 183 days or extra within the first 12 months or within the 12 months 2019 to 2020
• you can not declare a zone tax offset throughout that first 12 months since you have been there for lower than 183 days

Zone Tax Offset Charges

A number of elements are taken into consideration when computing for zone tax offset charges, together with marital standing, whether or not you have got any dependents or carer duties, which zones you’ve lived in and for the way lengthy, and some other offsets you might be eligible to obtain.

The ATO web site has some useful assets for calculating your zone offset charges. Nonetheless, the variables will be fairly tough, so speaking to your native tax accountant may also help.

FIFO Tax FAQs

Listed here are some frequent questions we hear concerning FIFO tax deductions and tax offset eligibility.

How are abroad FIFO staff taxed?

Australian residents who work abroad nonetheless must pay tax in Australia. You might also have tax obligations in your nation of labor, so that you’ll must verify with an skilled accountant to learn how this will have an effect on you. The price of a global work visa, journey vaccinations and another prices associated to working abroad could also be deductible relying in your circumstances.

Can FIFO staff declare journey to airports?

As per the ATO, touring out of your residence to your work website is a private expense. Thus, you can not declare deductions for journeys from your property to the airport. Equally, you can not declare tax deductions for airfares between your property and your work website, or the price of gas for DIDO staff.

Can FIFO staff declare residing away from residence bills?

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No. Whereas work journey bills will be deductible, residing away from house is a separate class of tax remedy, and bills equivalent to lodging and meals aren’t deductible. It’s possible you’ll obtain a ‘residing away from residence allowance’ (LAFHA) out of your employer to cowl these prices.

Can FIFO staff declare relocation bills?

No, relocating nearer to your job website – even for FIFO staff – is a personal expense and isn’t tax deductible.

Can FIFO staff declare youngster care bills whereas working away?

No, childcare bills are all the time a personal expense, even throughout college holidays.

Are suitcases and baggage tax deductible for FIFO staff?

The price of suitcases, trolleys, go well with luggage, backpacks, and any baggage that you just use to journey with could also be tax deductible – however solely to the extent of work-related utilization. In case you additionally use baggage for personal journey and holidays, you’ll be able to solely declare the proportion of business-related journey in your tax return.

Can FIFO staff declare zone allowance?

Sure. Nonetheless, they should fulfill sure necessities as mandated by the ATO. As a normal rule, they need to have been residing for 183 days or extra in an space designated by the ATO as a distant space.

Are union charges totally tax deductible in Australia?

Sure, union charges are 100% tax deductible. In case you are a FIFO employee, your union membership charges will be claimed as a tax deduction.

Want Recommendation on Your FIFO Tax Return?

If FIFO tax deductions and allowances depart you feeling confused, you might be lacking out on deductions you’re eligible for at tax time. To make issues clearer, think about chatting with a tax return accountant skilled with FIFO and DIDO tax returns. WealthVisory Accounting has helped numerous FIFO staff in WA declare the tax deductions they’re entitled to, and we’d love to assist along with your 2021-2022 tax return.

E-book an appointment to talk to one in every of our skilled accountants.

Disclaimer:

This text is offered as normal data solely and doesn’t think about your particular state of affairs, aims or wants. WealthVisory makes no warranties concerning the ongoing completeness or accuracy of this data. It doesn’t characterize monetary recommendation upon which any individual might act. Implementation and suitability requires an in depth evaluation of your particular circumstances.