FIFO Workers and Deductions.

If you are a fly-in fly-out (FIFO) worker, you may be wondering what tax deductions you can claim on your income. In this blog post, we will explain some of the common deductions that FIFO workers can claim, as well as some of the myths and deductions that they cannot claim. We will also discuss the importance of using the right accountant to get your tax return right.

FIFO workers are employees who work in remote locations for a period of time, and then return to their usual place of residence for another period of time. They typically work in industries such as mining, oil and gas, construction, and agriculture. FIFO workers often incur expenses related to their work arrangements, such as travel, accommodation, meals, uniforms, tools, and equipment. Some of these expenses may be eligible for tax deductions, depending on the circumstances.

According to the Australian Taxation Office (ATO), FIFO workers can claim deductions for expenses that they incur to earn their income or perform their work duties. However, they cannot claim deductions for expenses that are private or domestic in nature or that are reimbursed by their employer. Here are some examples of deductions that FIFO workers can and cannot claim:

• Meals: FIFO workers can claim a deduction for the cost of meals when they work overtime or when they receive an overtime meal allowance from their employer. They can also claim a deduction for the cost of meals when they travel overnight for work purposes, and they receive a travel allowance from their employer. However, they cannot claim a deduction for the cost of meals that are provided by their employer or that are included in their accommodation fees.

• Travel: FIFO workers can claim a deduction for the cost of travel between their home and their work site if they use their own car to carry heavy and bulky equipment over 25kg, such as ladders or toolboxes with multiple tools, and if no secure storage is provided at the work site. They can also claim a deduction for the cost of travel between their work site and their temporary accommodation if they use their own car. However, they cannot claim a deduction for the cost of travel between their home and the airport or between the airport and their work site if they use commercial flights arranged by their employer. They also cannot claim a deduction for the cost of parking fees at the airport or at their work site.

• Uniform and Protective Clothing: FIFO workers can claim a deduction for the cost of buying and cleaning uniforms that are distinctive (such as those with a logo) or compulsory (such as those required by a workplace agreement). They can also claim a deduction for the cost of buying and cleaning protective clothing that is necessary for their work (such as safety boots, helmets, gloves, goggles, etc.). However, they cannot claim a deduction for the cost of buying and cleaning conventional clothing that is not specific to their work (such as jeans, shirts, jackets, etc.).

• Tools & Equipment: FIFO workers can claim a deduction for the cost of buying and maintaining tools and equipment that are essential for their work (such as drills, hammers, wrenches, etc.). They can also claim a deduction for the depreciation of tools and equipment that cost more than $300 each. However, they cannot claim a deduction for the cost of tools and equipment that are provided by their employer or that are used for private purposes (Tools used for private purposes and work can be apportioned).

• Work-Related Phone and Internet Expenses: FIFO workers can claim a deduction for the cost of phone calls and Internet access that are directly related to their work (such as contacting clients, suppliers, colleagues, etc.). They can also claim a deduction for the depreciation of phone and internet devices that are used for work purposes (such as laptops, tablets, smartphones, etc.). However, they cannot claim a deduction for the cost of phone calls and internet access unrelated to their work (such as personal calls, social media, entertainment, etc.). In most cases you will need to show a call log with highlighted work calls to work out the claimable percentage.

Other FIFO Work-Related Tax Deductions

There are some other tax deductions that FIFO workers may be able to claim, depending on their specific situation. These include:

• Self-Education Expenses: FIFO workers can claim a deduction for the cost of self-education courses or programs that are directly related to their current job or that improve their skills or knowledge in their current job. They can also claim a deduction for the cost of textbooks, stationery, travel, fees, etc., related to their self-education. However, they cannot claim a deduction for the cost of self-education courses or programs that are not related to their current job or that enable them to get a new job.

• Licences, Permits and Certificates: FIFO workers can claim a deduction for the cost of renewing or obtaining licences, permits or certificates that are required for operating machinery or equipment in their job (such as crane licences, truck licences, etc.). However, they cannot claim a deduction for the cost of obtaining or renewing ordinary driver's licences.

• Medical Examinations: FIFO workers can claim a deduction for the cost of mandatory medical examinations or tests that are required for their job (such as drug and alcohol tests, fitness tests, etc.). However, they cannot claim a deduction for the cost of pre-employment medical examinations or tests or for the cost of medical examinations or tests that are not required for their job.

• First Aid Courses and Equipment: FIFO workers can claim a deduction for the cost of first aid courses and equipment that are required for their job (such as first aid kits, CPR training, etc.). However, they cannot claim a deduction for the cost of first aid courses and equipment that are not required for their job or that are used for private purposes.

Using the Right Accountant to Get It Right

As you can see, there are many tax deductions that FIFO workers can claim, but there are also many rules and exceptions that apply. To make sure you get your tax return right and maximise your refund, it is advisable to use a professional accountant who specialises in FIFO tax returns. An accountant can help you:

- Identify all the deductions that you are entitled to claim

- Calculate the correct amount of deductions that you can claim

- Keep the necessary records and receipts to support your claims

- Lodge your tax return on time and avoid penalties

- Deal with any queries or audits from the ATO

Using an accountant can save you time, money and hassle and ensure you get the best possible outcome for your tax return. If you are looking for a reliable and experienced accountant to help you with your FIFO tax return, contact us today. We have the expertise and knowledge to handle all your FIFO tax needs.