Claiming Self-Education Expenses: What You Need to Know

Deductibility of Self-Education Expenses

Many Australians invest their own money in education and training to build skills, improve career prospects and increase earning potential. A highly skilled workforce benefits not only individuals but also productivity across the broader economy. 

From a tax perspective, the deductibility of self-education expenses is not always clear. The key distinction lies between education that supports your current role and education undertaken to move into a different role. 

When Are Self-Education Expenses Deductible?

To be deductible, self-education expenses must have a sufficient connection to your current income-earning activities. This connection will generally exist where the course or training either: 

• Maintains or improves the specific skills or knowledge you need for your current employment; or 
• Results in, or is likely to result in, an increase in your income from your current employment activities. 

Importantly, self-education expenses incurred while you are not employed or self-employed are not deductible. 

What Courses of Study Are Eligible?

The following examples illustrate situations where self-education expenses are generally deductible: 

• An apprentice hairdresser working in a salon four days a week and attending TAFE one day a week is undertaking study that directly improves their hairdressing skills and knowledge. 
• A person with a Diploma of Nursing working as an enrolled nurse undertakes a Bachelor of Nursing. On completion, the qualification is likely to increase their income as a nurse.
• A system administrator pays for a course to learn a specific programming language used in their role. After completing the course, their employer increases their salary. The course is deductible as it resulted in increased income from their existing employment. 
• A pilot working for a domestic airline completes an aircraft conversion course to gain certification to fly their employer’s international aircraft, leading to higher pay. The course upgrades existing qualifications and is likely to increase income. 

What Courses of Study Are Ineligible?

By contrast, the following situations generally do not qualify for a deduction: 

• If the person studying for a Bachelor of Nursing had instead been working as a personal care worker, the necessary connection would not exist. The duties of a personal care worker are materially different from those of a nurse, and the course would be preparing the individual for a different occupation. 
• In a recent case, a person qualified as a dentist overseas and was working in Australia as a dental technician while studying to qualify as a dentist locally. Despite employer support, the Administrative Appeals Tribunal found the dentistry course was not sufficiently connected to the individual’s role as a dental technician.
• Courses undertaken to gain new employment are not deductible. For example, a teacher’s aide completing a Bachelor of Education would not be entitled to a deduction, as teaching students is substantially different from assisting a teacher. 
• Personal development or self-improvement courses are generally not closely enough related to current income-earning activities to qualify for a deduction. 

What Expenses May Be Claimed?

Where the required connection to your current employment is established, a range of expenses may be deductible.

Any employer reimbursements must be offset against your claim, and appropriate records must be kept. It can also be helpful to have confirmation from your employer explaining how the course relates to your current duties. 

Depending on your circumstances, deductible expenses may include: 

• Tuition, course, conference or seminar fees;
• Textbooks, journals and other general course materials; 
• The decline in value of depreciating assets, with apportionment where required; 
• Travel expenses, from local transport to interstate or overseas travel where relevant; 
• Accommodation and meals where overnight travel is required; and
• Interest on borrowings used to fund eligible expenses. 

What Expenses Cannot Be Claimed?

• Tuition fees that are paid by someone else, reimbursed by your employer or another third party;
• Tuition fees paid upfront, or through a HECS-HELP loan for Commonwealth-supported university or higher education courses;
• Repayments of study and training loans, including: 
  • Higher Education Loan Program (HELP), including FEE-HELP and HECS-HELP;
  • Student Financial Supplement Scheme;
  • VET Student Loans (VSL);
  • Student Start-up Loans and former ABSTUDY Student Start-up Loans; and 
  • Australian Apprenticeship Support Loans (AASL).
• Accommodation and meal expenses where you are not required to stay away from home overnight.

Wilson Pateras & Maximising Your Self-Education Expenses

Self-education deductions can be complex, but that shouldn’t deter you from claiming legitimate expenses.

With the right advice, these claims can be managed confidently and correctly.

Get in touch with our team if you would like assistance assessing whether your self-education expenses are deductible.