Products to Restock or Upgrade Before EOFY

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it pays (literally) to be on top of your taxes

As a hair professional, and/or salon owner it’s important to understand what expenses you can and can’t claim. You may find you are eligible to make some extra tax-related purchases, before 30 June 2023.

There are a few golden rules about when to claim a deduction for work-related expenses:

  • You must have spent the money yourself and weren’t reimbursed
  • The expense must be directly related to earning your income
  • You must have a record of payment, such as a receipt or tax invoice

Top Tip: The myDeductions tool in the ATO app can help you keep track of expenses and receipts throughout the year.

COMMON TYPES OF CLAIMS FOR HAIR SALONS

Upgrade Tools and Equipment

According to the Australian Taxation Office (ATO), as an employee, you can claim a deduction for the cost of tools and equipment that you use for work if it costs:

  • More than $300 – you can claim a deduction for the cost over several years (depreciated)
  • $300 or less – you can claim an immediate deduction for the whole cost

You can claim a deduction for the cost of any necessary repairs to work tools and equipment.

As a Salon owner/business owner, you could claim 100% of an assets/ equipment cost outright (uncapped for businesses with less than $50m of turnover) up to 30 June 2023.

Note that you can’t claim a deduction if the tools and equipment are supplied by your employer or another person.

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Equipment may include the following

Clothing Expenses and Laundry

You can claim a deduction for the cost of buying, hiring, mending, or cleaning specific uniforms that are unique and distinctive to your job i.e containing a business logo or name. You can also claim a deduction for protective clothing you or your employer want you to wear, such as aprons, face masks, and gloves.

You can’t claim a deduction if your employer buys, mends or cleans your clothing. You also can’t claim a deduction for the cost of buying or cleaning plain clothing (such as a plain black shirt) even if it's only worn at work.

You can’t claim a deduction for personal grooming and beauty products (hair and skin care products), even if your employer tells you to use them, as they are classified as personal expenses.

Self-education and study expenses

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You can claim education expenses if your course relates directly to your current job and it:

  • Maintains or improves the skills and knowledge you need for your current role; such as colouring, cutting and styling courses, all found under our Studio Courses
  • Results in or is likely to increase income from your current employment

Browse the range of education opportunities at Haircare Group. Our best-selling courses include:

Travel Expenses and Car Expenses

You can claim if you are required to travel away from your home overnight, for example, to a mobile job, a conference, seminar, training course or industry promotion. This could include meals, accommodation and incidental expenses that come out of your pocket.

You can claim a deduction for the cost of using your car when you drive:

  • Between separate jobs on the same day – for example, from your hairdresser job to a second job with another employer
  • To and from an alternate workplace for the same employer on the same day, such as a different salon
  • Business-related travel to places such as a non-full-day training session, visiting a supplier

For employees, car costs can be claimed under cents per km or the logbook method. Find out details on claiming motor vehicle expenses

You can’t claim if the travel is paid for, or you are reimbursed by your employer or another person. Receiving a travel allowance from your employer doesn’t mean you can automatically claim a deduction. You still need to show that you were away overnight, you spent the money yourself, and the travel was directly related to earning your employment income.

You generally can’t claim the cost of normal car trips between home and work, even if you work outside normal hours. This includes parking fees and tolls when you drive to and from work.

Other Expenses

You may be able to claim using the shortcut method, if you are a business owner or employee required to work from home to carry out part of the role - e.g. bookkeeping, administration work etc.

As a salon professional, there are other expenses you may be able to claim on tax:

  • Salon Merchandising
  • The cost of purchasing work-related books, magazines, journals
  • Work-related internet usage
  • Computers, software, telephones, and other telecommunications equipment - used for work or business purposes.

We hope this general summary will help when budgeting for your salon. We highly recommend you seek professional advice from your accountant or the ATO website and its Tax Time Tool Kit can provide tailored advice for you and your salon. For more news, inspiration and education for salon professionals, explore The Hub from Haircare Group.

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