Uniforms and PPE – Tax Deductions for Small Businesses

Providing uniforms and personal protective equipment (PPE) is essential for maintaining workplace safety and professionalism. But can you claim uniforms and PPE as tax deductions for your business? Here’s what you need to know to stay compliant and maximise tax savings.

Are Uniforms and PPE Tax-Deductible?

Yes, uniforms and PPE can be tax-deductible for businesses, but certain conditions must be met. According to the Australian Taxation Office (ATO), you can claim a tax deduction for:

  • Compulsory Uniforms: Clothing that is a specific requirement for work, such as branded uniforms or industry-specific attire.
  • Non-Compulsory Uniforms: Optional uniforms that are registered with AusIndustry.
  • PPE: Protective clothing, safety boots, gloves, masks, and other equipment necessary for workplace safety.

What Cannot Be Claimed as a Uniform or PPE Expense?

The ATO does not allow deductions for the following:

  • Clothing that is not work-specific, such as casual wear or everyday business attire.
  • Expenses related to conventional clothing, even if purchased for work purposes.
  • Personal items such as cosmetics or grooming products.

Record-Keeping for Uniform and PPE Deductions

To claim a deduction for uniforms and PPE, you must keep accurate records, including:

  • Receipts and invoices for purchased items
  • Proof of payment, such as bank statements or credit card records
  • Documentation showing that uniforms and PPE are compulsory or registered with AusIndustry

How to Claim Uniform and PPE Expenses

To claim uniform and PPE expenses on your tax return:

  • 1. Gather Records: Collect all receipts, invoices, and documentation related to uniforms and PPE purchases.
  • 2. Categorise Expenses: Separate compulsory uniforms, non-compulsory uniforms, and PPE expenses.
  • 3. Calculate Deductions: Sum up eligible expenses and ensure they meet ATO guidelines.
  • 4. Include in Tax Return: Report the expenses under work-related clothing and PPE expenses.

PPE Expenses During COVID-19

Due to the COVID-19 pandemic, the ATO allows businesses to claim deductions for PPE such as masks, gloves, and sanitiser if they are required for work. Ensure that these expenses are clearly documented as work-related to qualify for deductions.

Benefits of Providing Uniforms and PPE for Employees

Beyond tax deductions, providing uniforms and PPE offers several benefits for businesses:

  • Brand Visibility: Branded uniforms increase brand recognition and create a professional image.
  • Workplace Safety: PPE reduces the risk of workplace injuries and accidents.
  • Employee Satisfaction: Employees appreciate receiving high-quality uniforms and safety gear at no personal cost.

Need Help Managing Uniform and PPE Expenses?

Managing uniform and PPE expenses can be complex, especially when it comes to record-keeping and tax deductions. At Northern Beaches Bookkeeping Solutions, we provide comprehensive bookkeeping services to help you track expenses, claim eligible deductions, and maintain ATO compliance. Contact us today to learn more.

Call Now Button