Do you know how much people in the same job and tax bracket as you, claim as deductions and their main sources of earnings?
You might find that you’re far more generous with charitable donations than people with similar status to you, that a lower proportion of people have private health insurance than you might expect, or that members of your profession are big investors in shares.
Who makes tax deductions?
All up, we collectively disclosed $36.5 billion worth of tax deductions on our returns in 2016/17, an average of $3445 for every person who made a deduction.
But not everyone is boosting their tax return – the Tax Office data shows about one in four people who filled out a tax return did not claim a single cent in deductions.
Among the most common work-related tax deductions were uniform or clothing expenses. About 6.4 million Australians (or 46 per cent of those who filed a tax return) claimed back the cost of their work uniform, protective clothing or the costs of dry cleaning their work gear.
About 44 per cent of people who filled out a return claimed for the cost of managing their tax affairs, 33 per cent disclosed charitable donations, 26 per cent racked up work-related car expenses and 10 per cent had work-related travel expenses.
But the types of work-related expenses you can claim for vary greatly depending on your job. Uniform expenses were claimed by more than 90 per cent of train drivers, paramedics, prison officers and police.
But hardly any authors, economists, statisticians or university lecturers made clothing expense claims. (These are the careers to pursue if you want to wear casual clothes every day.)
Tourism advisers were most likely to claim travel expenses, Defence Force members to claim car expenses, and police were the most charitable profession, with about three out of every four officers disclosing a donation or gift.
Which jobs claim the biggest tax deductions
When it comes to the jobs that accrue the biggest work-related costs, flight attendants have the most expensive uniforms, real estate agents were among those with the highest car expenses and pilots accumulated the highest travel expenses.
You can claim work-related car expenses if you are required to use your own car as part of your job, while travel-related expenses include costs such as meals and accommodation if you’re away from home as part of your job. Some employers provide employees with allowances to cover such costs, and if you are given an allowance you cannot double-dip and claim a deduction.
Chief executives are the most generous givers, averaging almost $8000 in gifts or donations. Among CEOs in the top bracket, almost half disclosed a donation as a tax deduction, with the average amount being just over $20,000 (but at their tax rate that would have meant they got $9000 back from this donation when they handed in their tax return).
As people move up the income ladder they are more likely to claim tax deductions, and the amount they claim rises as well.
Surgeons claim the largest amount in deductions on average, with the typical surgeon disclosing almost $21,000 in 2016-17. But surgeons also have the highest average income of any job – $414,767, in case you’re wondering – so that’s not altogether surprising.
A better way of looking at the jobs that claim the most is in a proportional sense – looking at how much the deducted amount cuts into their total income.
On this metric, the jobs that make the biggest deductions are shearers, actors, legislators (parliamentarians, local government officials) and religious leaders. Their deductions account for almost 10 per cent of their total income on average.
Shearers are more likely to rack up sizeable car and travel expenses, religious leaders tend to donate a decent chunk of their income, while legislators appear to claim a lot for assorted work-related expenses such as subscriptions, phone bills and home office costs.
The jobs that claim the least are switchboard operators, payroll clerks, call centre workers and checkout operators.
Source : Sydney Morning Herald paper – Dated 18th June 2019