Private ruling: Deductions - legal expenses
Date of advice: 22 September 2023
Published: 30 October 2023
Ruling period: For the year ended 30 June 20XX | The scheme commence on: | DDMMYYYY
Date scheme commenced: DDMMYYYY

Ruling: Q1: Are you entitled to claim a deduction for legal expenses you incurred to pursue back payment of salary and wages? | A1: Yes, providing that the legal action relates solely to the recovery of wages, the legal expenses are an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 in the relevant income year.

Relevant facts and circumstances: In MMYYYY you suffered a workplace injury at work. On DDMMYYYY you were paid a total compensation amount from the Work Cover provider for $X. The compensation amount consisted of back payment of your underpaid wages, as well as an interest component. You incurred legal fees of $X associated with the pursuing the legal claim with your employer and Work Cover provider.

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