Like taxes, laundry is one of life’s certainties. Unless you’re living a full life wearing disposable clothes, you’re probably either doing your own laundry or having someone do it for you.
Regardless of the method you choose to wash your clothes, there are going to be costs involved. Even washing your clothes at home requires expenses for water and electricity and these expenses can add up. Thankfully, if the laundry is for work related clothing, then you should be able to claim the costs as a deduction on your tax return.
While this sounds great in theory, there are many rules surrounding what can and can’t be claimed. If you’re not an Accountant and highly versed in the exact regulations, it can be confusing. We’ve put together a guide to help you understand what you can legally claim on your tax return when it comes to laundry.
What clothing, laundry and dry-cleaning expenses can you claim?
The ATO defines clothing that is eligible to be claimed as a tax deduction as the following:
According to the ATO’s website, protective clothing includes the following:
- fire-resistant clothing
- sun-protection clothing with a SPF sun protection rating
- safety vests
- non-slip nurse’s shoes
- protective boots such as steel-capped boots or rubber boots
- gloves and heavy-duty shirts and trousers
- occupational heavy duty wet-weather gear
- boiler suits, overalls, smocks or aprons you wear to avoid damage or soiling your ordinary clothes during your work activities
Occupation-specific attire is defined as clothing that cannot be worn outside of work. It is clothing that is expected to worn for a specific occupation and allows the public to easily identify your occupation.
This category isn’t as clear cut as the other two, so if you’re unsure about whether your clothing falls under this category, it’s best to check with an Accountant.
Some examples of occupation-specific clothing are below:
- A judge’s robe
- Specific pants a chef wears
- A religious cleric’s ceremonial robes
A registered uniform (either compulsory work uniform or non compulsory work uniform)
A uniform is classified as clothing that is not suitable to be worn as ordinary clothes outside of the workplace. Registered uniforms must display the employer’s logo permanently attached or embroidered to deem it eligible to claim a deduction on.
The uniform should only be available specifically to employees, too, and not obtainable by the general public.
The exception to the above is if the uniform has been registered with AusIndustry. AusIndustry is a department of the Australian government that has support programs for Australian businesses.
Companies that have an optional uniform for employees will have to register the uniform with AusIndustry in order for employees to be able to get tax deductions for renting, buying or maintaining their uniform (like washing or dry cleaning).
How much can you claim on these items?
It’s important to keep in mind that if your laundry claim is over $150 total, or your total claim for work-related expenses is greater than $300, then you’ll need to provide written evidence, like diary entries or receipts.
If you are laundering your own clothing that falls into any of the above categories or having it washing at a laundromat, you can claim a deduction of up to the following amounts:
- up to $1 per load if the entire washing load is made up of work related clothing
- up to 50c per load is the washing load is only partially made up of work related clothing
If you are having your clothing laundered or dry cleaned, you can also claim a deduction for the amount paid. The same rules apply for the amount you can claim without receipts; and only work clothing that falls into the above categories can be allocated towards these expenses.
What clothing, laundry and dry-cleaning expenses can you not claim?
Many Australian’s follow the above criteria, but their laundry claims are deemed unsuccessful. This can be for a number of reasons, but the most common ones include:
Claiming laundry costs for every day clothing that’s worn at work
This is one of the most common mistakes that Australians make when claiming laundry expenses as a deduction on their tax return. Anything that could technically be worn outside of work, does not fall under the occupational-specific clothing category.
This is true even if you are a lawyer and the item of clothing is a suit, if you are a physical education teacher and the item of clothing is gym shorts, or if you are a receptionist and the item of clothing is a blouse. These rules also apply if you work in a retail store and are expected to buy clothing by the store’s label to wear at work.
Even though all of these items of clothing are expected to be worn for that specific occupation, they are items that could be worn outside of work too, so their cleaning costs won’t be eligible for a deduction on their laundering.
Claiming laundry expenses when their company already reimburses some, or all, of their laundry expenses
Some companies reimburse their employees for laundry expenses, including dry cleaning. These businesses may allocate a specific allowance to contribute towards cleaning expenses, reimburse cleaning receipts that are submitted to accounts payable, or simply clean the uniforms or work attire for their employees.
Employees who are offered a contribution towards their cleaning expenses are not eligible to claim laundry costs that are already covered. If work related clothing washing expenses are partially subsidised by a company, the employer may claim for out of pocket expenses.
If a taxpayer claims a deduction for laundry expenses that are covered be their employer, and the ATO has knowledge of their benefit, they may be penalised or have their claim rejected.
Claiming upwards of the threshold without adequate proof
Generally, a taxpayer should have an receipt or proof of payment for everything that’s claimed as a deduction on their tax return, however, in the case of laundry expenses, written evidence won’t be required if the total claim is under $150.
Similarly so, written evidence won’t be required if the total claimed for work-related expenses is under $300. The $300 threshold for work related expenses doesn’t include car, meal allowance, award transport payments allowance and travel allowance expenses. It does include things like education expenses, tools for the job, computers, overtime meals and phone, data and internet expenses.
This means that even if your work expenses come in at $80, and you also claim a work phone as a deduction that costs $400, then you will require written proof and/or receipts for both categories.
To be clear, this does not mean that upwards of $150 cannot be claimed as a deduction for laundry expenses. The total amount of your work-related laundry expenses can be claimed, the tax payer must just have adequate written proof and/or receipts.
Can I claim laundry expenses if I’m self employed?
It will depend on your occupation, but often, the answer is no. If you’re self employed and don’t wear a specific uniform, occupational specific clothing or protective clothing, then you won’t be able to claim any laundry expenses.
The exception to this is if you are self employed, and you do wear clothing that falls under the above categories. An example of this could be a self employed construction worker who wears a safety vest, gloves and heavy-duty shirts and trousers. If this is the case, then you can claim laundry expenses for these items.
I dry cleaned my work uniform, but don’t have a receipt, only a credit card statement – can I still claim a deduction?
Yes. The ATO accepts bank or credit card statements as proof of payment for tax claims. While it’s always best to keep the original copy of your receipt as proof, credit card statements are acceptable.
My claim is over $150 for laundry-related expenses, how do I submit my receipts?
Regardless of their amount, you won’t be required to submit a receipt when lodging your tax return. However, if you’re deduction is over a certain amount (for example, $150+ in laundry expenses) the ATO may ask you for proof if they decide to conduct an audit on your tax return.