Despite the many challenges that have faced many industries across the country during COVID-19’s persistence and ongoing effects, the retail sector has continued to progress through their continued, adapted operations. In this article we have a closer look a t Income and Tax Deductions a Retail Worker will need to consider when preparing their tax return.
As a result, retail workers across many stores may find that the changed situation may affect the taxable income from their work. These changes may result from additional income, less income, or stagnation of their taxable income due to stand-downs, business closures or a forced pause in their operations.
No matter the situation, retail workers will still need to accurately report their taxable income.
If you have earned your income in the industry over the previous year, you will need to know what:
- Income and allowances you may need to report.
- Work-Related deductions that are claimable.
- The records are that you may need to keep track of
This information may apply to income earned in the 2020-21 financial year or income earned over the next year.
Income and Allowances That You May Need To Report
On the 30th of June, you should have received an income statement or payment salary that shows what you have earned as a retail worker throughout the year. Income should include your salary, wages or allowances for that income year.
You should include all of the income you received during the year in your tax return, regardless of when you earn it. Income may include any:
- Salary or wages that you may have earned as income.
- Bonuses earned during the year.
- Allowances you may have received to compensate for an aspect of your work or help pay for certain expenses when you have travelled for work.
Allowances can also be if an employer pays you based on an estimated amount of what you might spend (e.g. paying cents per kilometre if you use your car for work). It may also be for the actual amount spent on the expense before or after it is incurred.
You may receive allowances:
- For work that may be unpleasant, special or dangerous
- In recognition of holding special skills, such as a first-aid certificate or
- To compensate for industry peculiarities, such as work on public holidays.
Reporting of Allowances
Your employer may not include some allowances on your income statement or payment summary but may include them on your payslips. These can include travel allowances or overtime meal allowances (as paid per industrial law, award or agreement).
Suppose that allowance isn’t on your income statement or payment summary, and you spend the entire amount on deductible expenses. In that case, it should not be included in the tax return as income or claimed as a deduction. If you spent more than your allowance, you include the allowance as income in your tax return and can claim a deduction for your expense.
If your employer pays for the expenses that you incur exactly, that payment is considered a reimbursement. You cannot include the expense paid by your employer as income or an expense.
Tax Deductions That You May Be Able To Claim – Retail Worker
If you are a retail worker looking for tax deductions that may specifically apply to your profession, you need to have:
- Spent the money and were not reimbursed for the work-related expense
- Proof that the expense directly relates to earning your income
- A record that proves the expense was incurred (a receipt is usually acceptable).
You can only claim a deduction for the work-related portion of an expense. You can’t claim a deduction for any part of an expense not directly related to earning your income or private.
Some of the tax deductions that may be eligible as deductions for retail worker include:
- Car expenses – if you drive between different jobs on the same day or drive to and from an alternate workplace for the same employee on the same day.
- Clothing expenses – the cost of buying, hiring, mending or cleaning specific uniforms that are unique and distinctive to your job or protective clothing that your employer requires you to wear.
- Meal expenses – the cost of overtime meals on the occasions where you worked overtime and took an overtime meal break, and your employer paid you an overtime meal allowance.
- Self-education expenses – if your course relates directly to your current job.
- Seminars and conferences
- Technical or professional publications
- Union and professional association fees
- Phone and internet usage if your employer needs you to use your devices for work.
Record-Keeping Tips
Always keep proof of any expenses that you may have incurred for which you want to claim deductions. The proof is usually a receipt but can be another form of written evidence (such as an invoice). Those records must show what you purchased, when, where, and how much you spent. They must be in English.
There are a few exceptions to the rule. These include small expense receipts, hard to get receipts, overtime meal expense receipts and travel and meal expenses. These have unique rules and conditions that you need to follow if attempting to claim on these.
If you would like further assistance or information on how you can handle your tax return as a retail worker for this current financial year or last year’s return, you can speak with us. We can assist you in the process and make sure that your tax return is correct.
