Private ruling: Work related deductions
Published: September 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Question and answer | Are you entitled to claim a deduction for wages and superannuation paid to your spouse for services and assistance required in the course of your employment? | Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Summary: 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 where the outgoings are of a capital, private or domestic nature. In your case, you will receive a small base salary and the majority of your income will be earned in the form of commissions. You have engaged the services of your spouse to assist in performing your duties and generating further commission income. ATO Interpretative Decision ATO ID 2006/239 looks at a taxpayer who is a manager in a bank who employs his spouse to assist him with his work. The Administrative Appeal Tribunal allowed a deduction for the expense on the basis that there was a real connection between the services provided by his wife and the taxpayer's increased commissions. It also held that no part of the payment was private. The facts of your case are similar to those in ATO ID 2006/239.You incur the expenses in the gaining of your assessable income. Therefore, you are entitled to a deduction under section 8-1 of the ITAA 1997.

Relevant facts: You have recently commenced new employment in a senior role. | Your role is extremely demanding and accordingly you require assistance in order to perform your duties at the desired level. | You intend employing your spouse to assist in performing your duties and generating further commission income. | Your employer has stipulated that you are responsible for providing your own support services. | Your spouse is a qualified in a specialist field. | You will pay your spouse 3/5 of the market value of a person employed in that specialist field based on the number of days they work with you per week.