Private ruling: Work related deductions
Date of advice: 25 October 2024
Published: 9 December 2024
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim a work-related deduction for fitness equipment? | A1: No.

Relevant facts and circumstances: You are employed by Employer Z. In addition to your basic level of service, you perform capabilities as part of a specialised team. You became a member of the specialised team some months after you began your employment with Employer Z. You carry out specialised team duties when required. You present for a medical assessment every couple of years as a minimum fitness standard to maintain suitability for deployment. You have access to a gym at your workplace.

Relevant legislative provisions: Income Tax Assessment Act 1997 (ITAA 1997) Section 8-1

Reasons for decision: Summary: The cost incurred for fitness equipment is considered a private expense and not allowable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature, or relate to the earning of exempt income. Generally, fitness expenses such as the cost of a gym membership or fitness equipment are considered to be private in nature and are therefore not deductible under section 8-1 of the ITAA 1997. Taxation Rulings TR 95/13 and TR 95/17 deal with the deductibility of gymnasium membership fees for police officers and Australian Defence Force (ADF) members respectively. TR 95/13 states that a deduction is not allowable for fitness expenses for police officers as it is considered to be private. The exception is if a police officer's income earning activities involve strenuous physical activities on a regular basis. Police Academy physical training activities, members of special emergency squads, diving squads and police officers who work regularly with police dogs and train them, may be able to demonstrate that their income producing activities demand a high level of physical fitness. TR 95/17 sets down a similar view for ADF members in that fitness expenses are not deductible. However, a deduction is allowable for these costs if the ADF member can demonstrate that strenuous physical activity is an essential and regular element of his or her income earning activities and that these costs were incurred to maintain a level of fitness well above the ADF general standard An example provided in the addendum of TR 95/17 refers to a member of the Special Air Services Regiment (SAS) who is paid to maintain the very highest level of fitness, and plainly differentiates between the level of fitness required of a SAS member and that of an ordinary infantryman. Clearly TR 95/13 and TR 95/17 follow the principle that unless a taxpayer's normal duties require an advanced (above and beyond normal) fitness level, deductibility of expenses will be denied. | Detailed Reasoning - Application to your circumstances: In your case, there is no doubt that these duties require a certain level of fitness and strength, and the fitness equipment would help that however, it is not required in order for you to perform your employment duties. Your employer provides a gym for you to maintain your fitness. We do not consider the level of fitness required in your case is at a level comparable to that of a physical training instructor or an officer in special combat or emergency squads. Furthermore, the strenuous activity is not done with such frequency to be considered a regular part of your duties. The cost of the fitness equipment is therefore considered to be a private expense and not incurred in relation to your employment. Accordingly, the cost of fitness equipment is not allowable under section 8-1 of the ITAA 1997.