Removal of Self-education $250 deduction limit

The Government has amended the law to remove the $250 non-deductible threshold for self-education expenses (by repealing S.82A of the ITAA 1936) from 1 July 2022 (i.e., from the 2023 income year).  This will make it simpler for individuals to calculate their self-education expense deductions under S.8-1.

Prior to 1 July 2022, the total amount of a taxpayer’s self-education expenses that could be deductible under S.8-1, which related to a ‘prescribed course of education’ (e.g., a course provided by a university), could not be greater than the amount by which those expenses exceeded $250.  As a result, only the excess of a taxpayer’s self-education expenses over $250 for an income year could be deductible under S.8-1.

Self-education expenses are the costs you incur when you:

  • undertake courses at an educational institution (whether or not the courses lead to a formal qualification)
  • attend work-related conferences or seminars
  • do self-paced learning and study tours (whether within Australia or overseas).

You can claim a deduction for a self-education expense if, at the time you incur the expense, it has a sufficient connection to earning income from your employment activities.

  • maintains or improves the specific skills or knowledge you require in your employment activities
  • results in, or is likely to result in, an increase in your income from your employment activities.

Deductible Expenses

Category Expenses
A Tuition fees, textbooks, stationery, student union fees, student services and amenities fees, public transport fares, car expenses worked out using the ‘logbook’ method (other than the decline in value of a car), running expenses for a room set aside specifically for study.
B Decline in value (depreciation) deductions for items such as a computer, desk, or car for which you are claiming a deduction in Category A under the ‘logbook’ method.
C Repair costs to assets used for self-education purposes. Don’t include car repair expenses here as it is part of car expenses in Category A or D.
D Car expenses using the ‘cents per kilometre’ method – you can’t use this method if you have used the ‘logbook’ method in category A.

If you have questions in relation to the above, or any other matters, please do not hesitate to contact our office on 1300 620 345.

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