Private ruling: Deductions - work related expenses
Date of advice: 28 November 2025
Published: 12 January 2026
Ruling period: Year ended 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you entitled to a deduction for the cost of post-graduate course fees under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for your self-education expenses incurred from DD MM 20YY to DD MM 20YY? | A1: No. You are not able to claim a deduction under section 8-1 of the ITAA 1997 for the expenses incurred for self-education while undertaking the post-graduate course from DD MM 20YY until DD MM 20YY as the expenses are incurred at a point too soon to be regarded as incurred in gaining or producing your assessable income. | Q2: Are you entitled to a deduction for the cost of post-graduate course fees under section 8-1 of the ITAA 1997 for your self-education expenses from DD MM 20YY to DD MM 20YY? | A2: Yes. | Q3: Are you entitled to a deduction for textbooks, course materials, stationery and printing costs, internet and software expenses while undertaking the post-graduate study course as self-education expenses under section 8-1 of the ITAA 1997 from DD MM YYYY to DD MM YYYY? | A3: Yes.

Relevant facts and circumstances: You are an Australian resident for tax purposes. On DD MM 20YY you commenced a part-time role as an xx assistant with a xx company. Your duties in this role included: • tasks related to organisation and execution of project activities • record management • calendar management • invoicing • website updates • update of procedure manuals. Your employer actively encourages your professional development through enrolment in external courses to develop your xx and xx skills. In early 20YY, your employer enrolled you in, and paid for, online professional development courses with the XXXX XXX XXX. On DD MM 20YY you were promoted to xx (entry level). This position was commuted to full time from DD MM 20YY. Your duties in this role include: • basic copy-edit and proofreading tasks • reference verification and citation editing • use of document formatting and proofing software • accessibility editing • management of outsourced indexing • assist in development of document processing • website development tasks. On DD MM 20YY you enrolled in a Graduate Certificate of xx online course at XXX University. The course of study encompasses four units of study: Subject list supplied You employer supports your study and provides flexible hours and days off to study. Your employer has not reimbursed you for any expenses related to the post-graduate course of study. You have a FEE-HELP loan to cover tuition fees for the course. You have a SA-HELP loan to assist paying your student services and amenities fees. You have purchased textbooks, xx software, course materials, stationery, such as printer supplies, for the study. You have incurred internet costs for the study as it is conducted in online format. You have incurred the following costs relating to the graduate certificate program: • Tuition fee for each subject. • Student services and amenities fees on DD MM 20YY and DD MM 20YY. On DD MM 20YY you paid a compulsory repayment amount toward your HELP loan. You will complete the course on DD MM 20YY.

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

Reasons for decision: Summary: Section 8-1 of the 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. It is well established that the words 'in gaining or producing assessable income' are to be understood to mean 'in the course of' gaining or producing assessable income and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. An expense will be fully deductible if there is no capital, private or domestic portion of the expense. To be deductible expenditure, there must also be a close relationship, or close connection between the expenditure and what it is that you do to produce your assessable income. To determine whether circumstances exist that support your self-education deductions, it is necessary to determine whether there is a sufficient connection between you incurring the expenses and your current income earning activities. Whether such a connection exists is a question of fact and is to be determined by reference to all the facts in your case. The rules regarding self-education expenses are set out in Taxation Ruling TR 2024/3: Income tax: deductibility of self-education expenses incurred by an individual (TR 2024/3) . Self-education expenses are not incurred in gaining or producing your assessable income if the self-education will enable you to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. These expenses are incurred at a point too soon to be regarded as incurred in gaining or producing your assessable income. Examples 9 to 11 in TR 2024/3 provide illustrations of where the self-education expenses are incurred at a point too soon. In your case, some of the expenses you incurred do not have a sufficient nexus to your income-earning activities at the time you undertook the study and are considered private in nature and therefore not deductible. TR 2024/3 explains partial deductibility of self-education expenses. A partial deduction may be appropriate where only part of your expense is for self-education connected with your income-earning activities or where only part of the self-education is relevant to your income-earning activities. Where a course, when considered in its entirety, is not deductible under section 8-1 but particular subjects, classes or modules within the course are sufficiently connected to your income-earning activities, you apportion the expenses by claiming a deduction only for the expenses relating to those particular subjects, classes or modules that are deductible. Example 21 of TR 2024/3 provides a scenario where the cost of an individual subject is deductible and the whole course is not deductible: James is an employee civil engineer. His duties include designing water and sewerage systems, determining the materials to be used for the systems, carrying out environmental impact studies and project management of the projects he works on. James decides to enrol in an MBA at a university to broaden his career opportunities, including possibly commencing his own firm in the future. The cost of each subject is identifiable from documentation he receives from the University. The MBA course does not have a sufficient connection with James' current employment activities as a civil engineer, so James is not entitled to a deduction for the course fees. However, if James studies a subject on project management as part of his MBA qualification, that particular subject would have a sufficient connection to his current income-earning activities of managing projects. Therefore, James would be entitled to claim the cost of the project management subject as a deduction. | Detailed Reasoning - Course fees - FEE-HELP: Section 26-20 of the ITAA 1997 outlines the availability of deductions in respect of certain student assistant programs. There is nothing in this section or any other taxation provision that precludes a deduction for course fees incurred where a taxpayer has obtained a loan for all or part of the fees for the course under FEE-HELP. You are entitled to claim a deduction under section 8-1 of the ITAA 1997 for expenses you incurred for the course fees where the expenses directly relate to your current income earning activities, even though you have obtained a loan for the payment of those fees under FEE-HELP. A full fee-paying student using a FEE-HELP loan, or a personal loan, can claim a deduction for their course fees (where they are deductible) at the time they pay those fees using the borrowed money. You cannot claim a deduction for repaying the loan, either as part of your income tax assessment or as voluntary repayments. Accordingly, where you meet the requirements of eligibility for a deduction of self-education expenses and are a full fee-paying student, then a deduction for the course fees can be claimed in the financial year in which the expense is incurred. You incur deductible course or tuition fees when the debt becomes a legal obligation you need to pay back and not when you make a repayment. In your case, the subjects undertaken in the period DD MM 20YY to DD MM 20YY and their respective course fees are claimable in the income year when the financial census date passes. The repayments you make to the Australian Government on your FEE-HELP debt are not an allowable deduction. Under section 26-20(1)(cb) of the ITAA 1997 payments you made to reduce a FEE-HELLP loan debt fall under Chapter 4 of the Higher Education Support Act 2003 and any such payments are expressly non-deductible. (Refer to ATO Interpretative Decision ATO ID 2005/27(W) Income Tax Deductions: self-education - payments made to reduce FEE-HELP debt Further information on self-education expenses including how to calculate your claim can be found on our website ato.gov.au and entering quick code QC 72166. | Detailed Reasoning - Student services and amenities fees, textbooks, stationery and internet expenses: Where you meet the requirements of eligibility for a deduction of self-education expenses, student service and amenities fees, textbooks and stationery costs incurred in attending an educational institution where there is a necessary and relevant connection with the earning of assessable income is an allowable deduction under section 8-1 of the ITAA 1997. Therefore, the expenses you incurred for internet, textbooks and stationery costs relating to the post-graduate study you undertook are deductible self-education expenses, apportioned as appropriate where only part of the expenses are for self-education connected with your income-earning activities. | Detailed Reasoning - Decline in Value - software purchase: Paragraphs 158 and 159 of TR 2024/3 state you can deduct an amount for the decline in value of assets such as technical instruments (computer software) if the self-education satisfies the principles of deductibility outlined above. You can claim assets that cost more than $300 over the life of the asset (decline in value). However, if the asset costs $300 or less you can claim an immediate deduction for the full cost of the asset to the extent that you used it for study in the income year you bought it. You must also reduce your deduction by the extent to which you use the asset for other than a taxable purpose. You must reduce your deduction by the extent to which you use the asset for other than a taxable purpose (refer paragraphs 161 and 162 of TR 2024/3). In your case, it is considered that the purchase of computer software in requires a reasonable apportionment to claim a deduction for this item to the extent to which the expense incurred has sufficient direct connection to your income earning activities. | Detailed Reasoning - Guidance on internet expenses: Practice Statement Law Administration - PS LA 2001/6 Verification approaches for home office running expenses and electronic device expenses states that usage of electronic devices in relation to a course of self-education may be deductible where a nexus can be established between the device usage expenses and the income earning activity. However, any personal device usage (as well as by other occupants) must be considered when determining the work-related percentage. Paragraph 6 advises the two primary measures that can impact on work component percentage include: • the time spent by the taxpayer using the device for work/study purposes compared to time spent by all occupants using the device for private purposes (time basis) and • data used for work/study purposes compared to data used for private purposes of all occupants (data basis). Where itemised accounts are not available, a reasonable estimate of work-related self-education expenses, based on diary entries of usage over a period of one month, together with relevant paid accounts, will be acceptable for substantiation purposes. You must keep evidence for each of the expenses you have incurred - for example, if you have incurred internet costs, you must keep at least one monthly or quarterly invoice for this expense. PS LA 2001/6 provides examples of how to calculate deductibility - • Example 1 - internet expenses - sole user - time basis • Example 2 - internet expenses - apportion for other users In your case, reasonable study related internet expenses will be deductible to the extent that these expenses relate to study or other work-related activities.