Tax Deductions for Factory Workers
If you're working as a factory workers, there are 27 categories of work-related expenses you may be able to claim. Below you'll find every deduction the ATO lists for your occupation — in plain English.
This guide covers 27 deduction categories with 208+ specific items, plus income types and record-keeping requirements — all sourced from the ATO.
Deduction Categories
27
Specific Items
208
Income Types
0
Work-Related Deductions (27)
Amounts you do and don't include
- salary and wages, including cash or bonus payments
- compensation and insurance payments – for example, payments made under an income protection insurance policy to replace salary and wages.
- You must include all the income you receive during the income year as a factory worker in your tax return, this includes:
- Don't include as income any reimbursements you receive.
- Your income statement or payment summary will show all your salary, wages and allowances for the income year.
Allowances
- to help you pay for a work expense – for example, tools and equipment
- as compensation for an aspect of your work such as working conditions or industry peculiarities – for example, handling hazardous materials
- as an amount for having special duties, skills or qualifications – for example, first aid qualifications.
Allowances not on your income statement or payment summary
- don't include it as income in your tax return
- can't claim any deductions for the work expenses the allowance covers.
- include the allowance as income in your tax return
- include a claim for the work expenses you incur in your tax return
- must have records of your expenses.
Allowances and claiming a deduction
- The following table sets out allowances you may receive and when you can claim a deduction.
- Example of allowance type
- Deductible (Yes or No)
- Compensation for an aspect of your work that is unpleasant, special or dangerous or for industry peculiarities
- Artificial fertilizers and chemicals allowance
- Cleaner, greaser or oiler allowance
- These allowances don't help you pay for deductible work-related expenses
- An amount for certain expenses
- Motor vehicle allowance
- If you incur deductible expenses
- An amount for special skills
- A first aid certificate
- Mario is an employee factory worker. Mario's employer snap freezes fresh fruit and vegetables and packages them. Mario's role requires him to work in a particular section of the factory that must be kept at below 0 degrees Celsius.
- Mario's employer pays him a cold places allowance of 66c per hour. The allowance is shown on his income statement at the end of the income year.
- Mario must include the cold places allowance as income in his tax return.
- The allowance compensates Mario for an aspect of his work that is special. It is not to help him pay for deductible work-related expenses.
- Mario can't claim a deduction because he hasn't incurred any expenses.
- Doris is an employee factory worker. On 5 occasions during the income year, Doris is asked to work overtime. Under the terms of the industrial award, Doris's employer pays her an overtime meal allowance of $15.24 each time she works overtime.
- On her overtime meal break Doris buys and eats a meal at the cafeteria onsite. Doris usually spends $20 on her meal.
- At the end of the income year, Doris's employer shows the total overtime meal allowance paid to Doris on her income statement ($15.24 × 5 = $76.20).
- Doris must include the total amount of the allowance ($76.20) as income in her tax return.
- Doris can claim a deduction of $100 ($20 × 5 = $100) for overtime meals in her tax return.
Reimbursements
- don't include the reimbursement as income in your tax return
- can't claim a deduction for them.
- If your employer pays you the exact amount for expenses you incur (either before or after you incur them), the payment is a reimbursement .
- A reimbursement is not an allowance.
- If your employer reimburses you for expenses you incur, you:
Example: reimbursement for protective eyewear
- Deductions for work expenses
- Record keeping for work expenses
- Beth is an employee at a factory manufacturing items that require certain chemicals. Beth needs to wear protective eyewear to protect her eyes from the risk of damage that may occur if the chemicals splash into her eyes. Beth has the option of wearing the protective eyewear her employer provides or she can buy protective eyewear that meets specific requirements and request a reimbursement.
- The protective eyewear Beth's employer provided doesn't fit her face so she buys a pair that fit her better for $50. Beth's employer reimburses her $50 for the protective eyewear.
- Beth doesn't need to include the reimbursement from her employer as income in her tax return.
- Beth can't claim a deduction for the cost of protective eyewear.
- Find out about factory workers':
Car expenses
- live a long way from your usual workplace
- have to work outside normal business hours (for example, weekend or early morning shifts).
- the tools or equipment are essential to perform your employment duties
- the tools or equipment are bulky, meaning that because of the size and weight, they are awkward to transport
- they can only be transported conveniently using a motor vehicle
- there is no secure storage for such items at the workplace.
- directly between separate jobs on the same day(provided neither of the workplaces is your home) – for example, driving from your job as a factory worker to your second job as a bar assistant
- to and from an alternative workplace for the same employer on the same day – for example, driving between a warehouse and another work site
- from home directly to an alternative workplace – for example, travelling from home to your employer's head office to attend a meeting.
- own the car
- lease the car (directly from the finance company)
- hire the car under a purchase agreement (with the car dealership or a finance company).
- vehicle with a carrying capacity of one tonne or more (such as a ute)
- vehicle that can transport 9 passengers or more (such as a minibus).
Example: travel from home to work
- Geoffrey uses his car to travel between his home and the factory he works at. He carries his steel-capped boots that is he must wear when working and some hand tools which uses.
- Geoffrey can't claim a deduction for the car expenses he incurs for the trips between his home and the factory every day. The tools and equipment Geoffrey carries each day to work are not bulky. The travel is a private expense.
Example: travel between workplaces for different employers
- Mick is an employee in a factory manufacturing beds. Mick also works at a bar part-time. On a Thursday and Friday, after his shift at the factory finishes, he travels directly to his shift at the bar.
- Mick can claim a deduction for the car expenses he incurs for the trips directly from the factory to the bar on a Thursday and Friday.
Example: travel to an alternative workplace
- David is an employee factory worker. Once a month, David drives from the factory he works at to his employer's head office to attend a meeting. After the meeting, David drives home.
- David can claim a deduction for the expenses he incurs for the trips from the factory to his employer's head office. David can also claim a deduction for the expenses he incurs for the trips from his employer's head office to his home.
Child care
- You can't claim a deduction for child care (including school holidays and before and after school care) when you're working. It's a private expense, and the expenses have no direct connection to earning your income.
Clothing and uniform expenses (including footwear)
- protective clothing – clothing with protective features or functions you wear to protect you from specific risks of injury or illness at work. For example, steel-capped boots, fire-resistant clothing, or boiler suits that protect conventional clothing. Conventional clothes you wear at work are not regarded as protective clothing if they lack protective qualities designed for the risks of your work. This includes jeans, drill shirts, shorts, trousers, socks, closed shoes.
- occupation-specific – clothing that distinctly identifies you as a person with a particular profession, trade or occupation. For example, a judge's robes or a chef's chequered pants). Items traditionally worn in a profession are not occupation-specific where the clothing is worn by multiple professions.
- a compulsory uniform – clothing that your employer strictly and consistently enforces you wear by workplace agreement or policy and distinctly identifies either you as an employee working for a particular employer
- the products or services your employer provides
- a non-compulsory uniform – a uniform that is not compulsory to wear and that your employer registers on the Register of Approved Occupational Clothing.
Example: compulsory uniform with logo
- distinctive items with the employer's logo
- compulsory for him to wear at work.
- Mike has to buy and wear shirts with his employer company logo embroidered on it. As part of his uniform, he also has to wear plain black pants and black shoes.
- Mike can claim a deduction for the cost of buying and maintaining the shirts as they are:
- However, he can't claim the cost of buying or cleaning his black pants or shoes as they are items of a conventional nature.
Example: employer registered uniform with AusIndustry
- Leda is a factory worker, and she also works in the reception area for a number of hours each day. Reception staff wear a polo shirt in the company's colours monogrammed with the company logo. It's not compulsory for a staff member to wear the polo shirt, but the employer encourages staff members to do so. Leda's employer has registered the shirt with the Register of Approved Occupational Clothing and she wears the uniform at work.
- Leda can claim a deduction for the cost of buying and maintaining the polo shirt The shirt is a non-compulsory uniform that has been registered with the Register of Approved Occupational Clothing and she wear the uniform at work.
Example: protective clothing
- Renee is an employee factory worker. At the end of her shift, Renee must use a high-pressure water hose to wash down the equipment in her section of the factory. To protect herself from getting wet and from the dirt that comes off the equipment, Renee wears a waterproof jacket, waterproof pants and gum boots. Renee's employer provide these items.
- The waterproof jacket, waterproof pants and gum boots are protective clothing. The items protect her from the risk of illness and injury and they also protect her clothing. However, Renee can't claim a deduction for the protective clothing because she did not buy them.
Drivers licence
- You can't claim a deduction to get or renew your drivers licence , even if you must have it as a condition of employment. This is a private expense.
- You can claim a deduction for additional costs you incur to get a special licence or condition on your licence to perform your work duties. For example, the cost you incur to get a heavy vehicle permit.
Fines and penalties
- You can't claim a deduction for any fines or penalties you get when you travel to work or during work. Fines may include parking and speeding fines or penalties.
Example: speeding fine
- Chris works in a factory as a supervisor. He travels from the factory to the warehouse to pick up some parts that are required. On his way to the factory, Chris gets a speeding fine which he pays.
- Chris can't claim a deduction for the speeding fine even though he was travelling for work purposes at the time he was fined.
First aid courses
- a designated first aid person
- need to complete a first aid training course to assist in emergency work situations.
- Factory worker expenses G–O
- Factory worker expenses P–S
- Factory worker expenses T–W
Glasses, contact lenses and anti-glare glasses
- You can't claim a deduction for prescription glasses or contact lenses , even if you need to wear them while working as these are private expenses.
- You can claim a deduction for the cost of protective glasses if you wear them to reduce the real and likely risk of illness or injury while working. Protective glasses include anti-glare or photochromatic glasses, sunglasses, safety glasses or goggles.
- You only claim a deduction for the work-related use of the item.
Laundry and maintenance
- protective (for example, a hi-vis jacket)
- occupation specific and not a conventional, everyday piece of clothing such as jeans
- a uniform either non-compulsory and registered by your employer on the Register of Approved Occupational Clothing or compulsory.
- $1 per load if it only contains clothing you wear at work from one of the categories above
- 50c per load if you mix personal items of clothing with work clothing from one of the categories above.
Example: laundering a deductible compulsory uniform
- Che is an employee factory worker. Che must wear a compulsory uniform whenever she is on duty and is also responsible for washing it. Che washes her compulsory uniforms 3 times a week in a mixed laundry load. During the income year, Che works for 50 weeks.
- Che calculates her deduction for laundry expenses as follows:
- 3 washes per week × $0.50 per load by 50 weeks = $75
- As Che's claim is less than $150, she isn't required to keep written evidence of her laundry expenses. However, if asked, she will still need explain how she calculates her claim.
Licences, permits and cards
- You can’t claim the costs to get your initial licence, regulatory permit, cards or certificates in order to get a job.
- You can claim a deduction for the additional costs you incur to get or renew these expenses in order to continue to perform your work duties. For example, if you need to have a forklift licence to get your job, you can’t claim the initial cost of to get it, however you can claim the cost of renewing it during the period you are working.
Meal and snack expenses
- overtime meal expenses , but only if you buy and eat the meal while you are performing overtime and you receive an overtime meal allowance under an industrial law, award or agreement
- the cost of meals you incur when you are travelling overnight for the purpose of carrying out your employment duties ( travel expenses ).
- You can't claim a deduction for the cost of food, drink or snacks you consume during your normal working hours, even if you receive a meal allowance. These are private expenses.
Example: meal expenses not deductible
- Sylvie works at a pharmaceutical manufacturing factory. The factory runs 24 hours a day and Sylvie does the early morning shift which starts at 4:30 am and finishes at 1:30 pm.
- During her meal break, Sylvie buys breakfast and a coffee.
- Sylvie can't claim a deduction for the cost of her breakfast and coffee which she buys while working her normal early morning shift. The expenses are private expenses.
Music streaming services, CDs, audio books or podcasts
- You can't claim a deduction for the cost of music streaming services, CDs, audio books, podcasts or devices that you use at work. Even if they're used to keep you motivated or occupied at work, these items aren't essential to earning your income. They are private expenses.
Newspapers and other news services, magazines and professional publications
- a direct connection between your specific work duties and the content
- the content is specific to your employment and is not general in nature.
- The cost of newspapers, other news services and magazines are generally private expenses and not deductible.
- You can claim a deduction for the cost of buying or subscribing to a professional publication, newspaper, news service or magazine if you can show:
- If you use the publication for work and private purposes, you can only claim the portion related to your work-related use.
Overtime meal expenses
- you receive an overtime meal allowance under an industrial law, award or agreement
- the allowance is on your income statement or payment summary as a separate allowance
- you include the allowance in your tax return as income.
- up to reasonable amount, you don’t have to get and keep receipts
- more than the reasonable amount, you must get and keep receipts for your expenses.
Example: overtime meals
- Factory worker expenses A–F
- Factory worker expenses P–S
- Factory worker expenses T–W
Parking fees and tolls
- You can't claim a deduction for parking at or near a regular place of work. You also can't claim a deduction for tolls you incur for trips between your home and regular place of work. This is a private expense.
- You can claim a deduction for parking fees and tolls you incur on work-related trips.
Phone, data and internet expenses
- provides you with a phone for work and pays for your usage
- reimburses you for the costs you incur.
- Mobile phone, mobile internet and other devices
- Home phone and internet expenses
Protective items
- supplies the protective items
- reimburses you for the cost you incur to buy protective items.
- You can claim a deduction for the cost of protective items if you wear them to protect you from the real and likely risk of injury or illness in your work environment or while performing your work duties.
- To be considered protective, the equipment must provide a sufficient degree of protection against the risks of illness or injury you are exposed to in carrying out your work duties. Protective items can include safety glasses, helmets and breathing masks.
- You can also claim the costs you incur to repair, replace or clean protective items.
- You can't claim a deduction if your employer:
Example: deduction for protective equipment
- Wiremu works in a food manufacturing factory. Wiremu buys a pair of safety glasses and good quality ear plugs as he must wear them while his on duty. If Wiremu doesn't wear these items, he is at risk of injuries to his eyes and damaging his hearing.
- Wiremu can claim a deduction for the cost of the safety glasses and ear plugs. These items protect him from the risk of injury while he is carrying out his employment duties.
Repairs to tools and equipment
- You can claim a deduction for repairs to tools and equipment you use for work. If you also use them for private purposes, you can only claim an amount for your work-related use.
Self-education expenses
- maintains or improves the skills and knowledge you need for your current duties
- results in or is likely to result in an increase in your income from your current employment.
- doesn't have a connection with your current employment
- only relates in a general way to your current employment
- enables you to get employment or change employment.
- travel between your home and the place of education and then back home
- the first leg of the trip   when you travel from home to the place of education and then on to work
- when you travel from work to a place of education and then home
- travel between work and the place of education and then back to work.
- Higher Education Loan Program (HELP) (FEE-HELP and HECS-HELP)
- VET Student Loans (VSL)
- Australian Apprenticeship Support Loan (AASL)
- Student Financial Supplement Scheme (SFSS)
- Student Start-up Loan (SSL).
Example: course to improve skills and knowledge
- Frank is an apprentice metal machinist. He works in a factory and attends technical college to undertake his apprenticeship course for 2 consecutive days each fortnight.
- Frank's employer's pay for his course fees but they don't pay for any of his other expenses. Frank travels from his home to the technical college by public transport and buys the textbooks he needs for his apprenticeship course.
- Frank can claim a deduction for the cost of taking public transport to and from his home to the technical college and for the cost of his textbooks. The course Frank is taking improves the skill and knowledge he requires for his current duties. The course will also result in an increase in pay from his current employment.
- Frank can't claim a deduction for the course fees because he doesn't incur the cost. His employer pays for the course fees directly.
Example: course doesn't have connection with current duties
- Paolo works on a production line in a factory. He has recently arrived from overseas and is doing a language course to improve his English speaking skills. Paolo's enrols in the course after encouragement from his employer.
- Paolo can't claim a deduction for the costs of this course. The course doesn't relate to his current income-earning activities. Even though Paolo's employer encourages him to enrol in the course, the expenses are private. The course is too general.
Seminars, conferences and training courses
- You can claim for the cost of seminars, conferences and training courses that relate to your work as a factory worker.
- The costs you can claim includes fares to attend the venue where the seminar, conference or training course is held and registration costs. If you need to travel and stay away from home overnight to attend such an event, you can also claim the cost of accommodation and meals.
- You may not be able to claim all of your expenses if attending a seminar, conference or training course is for both work-related and private purposes. If the private purpose is incidental, such as a catered lunch or a reception for delegates, you can still claim all your expenses. However, if the main purpose is not work-related, such as attending a conference while on a holiday, you can only claim the direct costs. Direct costs include the registration costs.
- Where you have a dual purpose for attending the seminar, conference or training course you can only claim the work-related portion. For example, you add a holiday of one week to a training course that runs for one week.
Example: work-related training course
- Ethan works as a production manager in a factory producing solar panels. He attends a 5 day training course in Sweden dealing with how to reduce the environmental impact of manufacturing solar panels and the cost efficiencies it creates.
- Ethan's employer pays for the training and his flights to Sweden but Ethan pays for his accommodation and meals while he is there.
- Ethan arrives the night before the course commences and travels home the day after it finishes.
- Ethan can claim a deduction for the cost of his accommodation and meals while he is in Sweden attending the training course. The course relates to his current duties as a production manager in a solar panel factory and his sole purpose for the travel to Sweden is to attend the course.
- Ethan can't claim a deduction for the cost of the training or his flights because he did not incur that cost. His employer pays for those expenses directly.
Stationery
- Factory worker expenses A–F
- Factory worker expenses G–O
- Factory worker expenses T–W
Taxi, ride-share, public transport and car hire
- You can’t claim a deduction for transport expenses (taxi, ride-share, public transport or car hire) between home and work, these are private expenses.
- You can claim a deduction for transport costs if you travel in the course of performing your work. For example, taking a taxi from your regular workplace to another work location.
- You can't claim a deduction if your employer reimburses you for these expenses.
Tools and equipment
- you use it mainly to produce non-business assessable income
- it's not part of a set that together cost more than $300.
- it’s not identical, or substantially identical to, other items that together cost more than $300.
- cost more than $300
- is part of a set that together cost more than $300.
- is identical, or substantially identical to, other items that together cost more than $300.
Example: decline in value of tools
- Stanley is a wood processing factory worker who owns an electric saw. He uses the saw at work during the week and at home on weekends for his home renovations. He bought the electric saw for $650 on 1 October 2024.
- Stanley can claim a deduction for the decline in value of the electric saw. However, he can only claim a portion of the decline in value that relates to his work use of the electric saw. Stanley can also only claim for the period of the income year that he owns the saw.
- Stanley checks the effective life and finds it is 5 years and decides to use the prime cost method. As Stanley uses the saw 5 days per week for work and 2 days for private purposes, he calculates his work-related use as 5 days ÷ 7 days.
- Stanley calculates his deduction as:
- Asset's cost × [days held ÷ 365] × [100% ÷ Asset's effective life]
- $650 × [272 days ÷ 365 days] × [100% ÷ 5 years] = $98.88
- Stanley claims a deduction of $98.88 for the decline in value of his electric saw in his income tax return.
Travel expenses
- travel for work
- sleep away from your home overnight in the course of performing your employment duties.
- you slept in accommodation your employer provides
- you eat meals your employer provides
- your employer or a third party reimburses you for any costs you incur.
- you were away overnight
- you have spent the money
- the travel directly relates to earning your employment income
- how you work out your claim.
- the travel allowance is not shown on your income statement or payment summary
- the travel allowance doesn't exceed the Commissioner's reasonable amount (the reasonable amount is the amount we set each year for determining whether an exception from keeping written evidence applies for accommodation, meal and incidental expenses which are covered by a travel allowance)
- you spent the whole allowance on deductible accommodation, meal and incidental expenses, if applicable.
- you receive a travel allowance from your employer for the expenses
- your deduction is less than the Commissioner’s reasonable amount.
Union and professional association fees
- Factory worker expenses A–F
- Factory worker expenses G–O
- Factory worker expenses P–S
- Income and allowances
- Record keeping for work expenses
✅ Deduction Checklist for Factory Workers
Use this checklist at tax time to make sure you don't miss any deductions.
💡 Practical Tips
📱 Use the myDeductions Tool
Download the ATO app and use myDeductions to record expenses throughout the year. Much easier than collecting receipts at tax time.
🧾 The $300 Rule
You can claim up to $300 in work-related expenses without receipts — but you must have actually spent the money and it must be related to earning your income.
🏠 Working From Home
If you work from home, you can claim 67 cents per hour (revised fixed rate) for running expenses like electricity, internet, and phone. Keep a record of hours worked.
🚗 Car Expenses
Choose between the cents per km method (85c/km, max 5,000 km) or logbook method (actual expenses × business use %). A 12-week logbook is valid for 5 years if your circumstances don't change.
⚠️ Common Mistakes & ATO Audit Flags
The ATO actively audits factory workers claims. Avoid these common errors and know what triggers extra scrutiny.
❌ Common Mistakes
Claiming expenses reimbursed by your employer
Fix: If your employer already paid you back, you can't also claim a deduction. Check your pay slips.
Not keeping receipts for claims over $300
Fix: You must have records for all deductions over $300. Bank/credit card statements alone aren't enough — keep the actual receipts.
Claiming private expenses as work-related
Fix: Only expenses directly related to earning your income are deductible. Personal items worn or used at work don't count.
🔍 ATO Audit Flags
Deductions significantly above average for your occupation
The ATO publishes benchmarks. If your claims are well above the norm, expect a 'please explain'.
Claiming the same expense twice (e.g., WFH and office supplies)
The ATO's data matching catches double-dips. Make sure each expense is claimed once.
Data sourced from the Australian Taxation Office — Factory Workers Guide. Last updated: 2026-03-14.