As an independent support worker, managing your tax can sometimes be confusing. That’s why we’ve prepared this simple guide to help you understand your GST obligations, work allowances and the expenses you can claim as deductions, so you are not paying more tax than you need to.
If you’re a participant or nominated representative under the National Disability Insurance Scheme (NDIS), your NDIS payments are tax-free. Any expenses you incur cannot be claimed as deductions if you are not required to pay tax.
Do I need to register for GST?
You don’t need to be registered for GST because you are a support worker. However, you will likely be required to register for GST if you earn over $75,000 per annum.
You are not permitted to charge GST unless you are registered for GST. Once you register, you will need to include 10% GST on applicable services.
You must also submit a quarterly BAS (Business Activity Statement).
Under the NDIS scheme, certain supports and services provided to NDIS participants are exempt from GST, which means that you do not need to collect the additional 10% GST for specific services.
It can be a little confusing, so to make sure you are meeting your tax obligations and correctly collecting GST, it is best to have a chat to help you get started.
You can also find more information about GST requirements under the NDIS on the Australian Taxation Office website.
Work Allowances for Independent Support Workers
When preparing your tax return, you must include all the income earned in the financial year. This includes your salary and any allowances your employer has paid you.
Allowances may include payments for car expenses, clothing and laundry. You may also receive travel or overtime meal allowances received under industrial law, award or agreement, which can be seen on your payslip.
If you are a Sole Trader, you must keep records of any expenses, such as travel you undertake as part of your services.
Expenses You Can Claim
Firstly, to claim tax deductions as an independent support worker, you must:
- If you are an employee, ensure your employer didn’t reimburse you for the expense
- Keep a record of any expenses you want to claim. E.g. receipts or invoices
- The ATO has a free app to help you keep track of your records
- If you are a Sole Trader, platforms such as Xero and MYOB can help you keep track of your expenses
- If you are using personal items, such as a phone, for your job, you can only claim the work-related part of your expense
- For mobile phone usage, you cannot include personal time spent on your phone
The following expenses may be claimed as tax deductions for independent support workers:
If you have clothing that is solely used for work purposes, you may be able to claim deductions on the following:
- Protective clothing such as gloves, shoes, scrubs and masks
- Compulsory uniforms that are specified in your employer’s uniform policy
If you rely on various equipment in your work as a disability support worker, these tax deductions may apply:
- Buying and repairing equipment you use at work (including medical equipment, computers, and mobile phones)
- Any materials or supplies that you buy for use at work, e.g. art equipment, sunscreen, face masks and hand sanitiser, learning equipment such as sensory toys
- Stationery, including diaries, work bags or briefcases
Training and Education
If you pay for any courses or training to help increase your knowledge or skills, these tax deductions may apply:
- Short training courses such as First Aid & CPR certifications
- Tertiary-level courses such as a Nursing degree or Certificate IV in Community Services, Disability or Aged Care (not including HECS/HELP)
- The cost of books, stationery, equipment, internet and travel required for your course or training
- Any accommodation you have to pay for to complete a course, e.g. if you live in a regional area and have to stay overnight
The cost of travelling between your home and place of employment is usually considered private and cannot be claimed as a deduction. However, you may be able to claim the following travel expenses:
- The transport of clients during your shift, e.g. to doctors’ appointments or client activities such as the shopping centre or cinema
- Any parking, tolls or public transport you pay for during this time
- Travelling from one workplace to another, e.g. from one client to another or a second job
- Travelling from your home to an alternative workplace, e.g. attending a training course or meeting at a different location than your typical workplace
Meals and Entertainment
In the course of your work, you make need to purchase food and drink or other non-cash entertainment such as movie tickets for you and/or your client.
This is categorised as entertainment for tax purposes. Entertainment expenses are a complex area of your tax return, especially for sole traders who typically don’t have an allowance or expense account for such purchases.
It’s important to understand that the provision of entertainment is a benefit subject to Fringe Benefits Tax (FBT).
Some entertainment costs are not tax-deductible, and GST input tax credits cannot be claimed, depending on how the business values these benefits.
It is always a good idea to discuss with us what you can claim as entertainment, so you know what is and is not a claimable expense.
Other Work-Related Expenses Disability Support Workers May Claim:
- The cost of annual memberships or union fees
- The cost of work-related telephone calls and internet connection fees
- The cost of work related to books, magazines and journals
- The cost of any checks you may need, such as a National Police Check, NDIS Worker Screening Check and Working with Children Checks
Lastly, did you know your tax agent fees are also 100% claimable as a deduction? As Tax Accountants and NDIS Plan Managers, we understand the challenges of managing your expenses as a support worker and offer expert advice to minimise your tax bill and maximise your refund.
Book your appointment today so you can relax and get back to providing care to your clients, knowing that you won’t be paying more than you need to at tax time.
This blog post is intended for informational and educational purposes only. The information provided in this blog post should not be taken as professional accounting advice or recommendations.
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