Private ruling: Work-related expenses
Date of advice: 31 October 2025
Published: 15 December 2025
Ruling period: Years ended 30 June 20XX to 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 20 January 20XX

Ruling: Q1: Can I claim a deduction for self-education expenses? | A1: No

Relevant facts and circumstances: You have been employed by Company A from XX XXX 20XX. You have held a number of positions since commencing employment with Company A. You commenced your XXXX degree at XXXX University on XX XXX 20XX. You expect to finish the course on XX XXX 20XX.

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 or relate to the earning of exempt income. Taxation Ruling 2020/1 Income tax: employees: deductions for work expenses under section 8-1 of the Income Tax Assessment Act 1997 (TR 2020/1) sets out when an employee can deduct a work expense under section 8-1 of the ITAA 1997. The pivotal element of section 8-1 of the ITAA 1997 for work expenses is the requirement that expenses be incurred 'in gaining or producing assessable income'. Paragraph 22 of TR 2020/1 provides: '...the requirement that expenses be incurred in the course of producing assessable income means that it is not enough to show only that there is some general link or causal connection between expenditure and the production of income. The expenditure must have a sufficiently close connection to performance of the employment duties and activities through which the employee earns income.' The High Court majority in Commissioner of Taxation v Payne [2001] HCA 3 said it is well established that these words are to be understood as meaning incurred '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. The majority further stated that the meaning of 'in the course of' gaining or producing income was amplified in Ronpibon Tin NL v Commissioner of Taxation (Cth) [1949] HCA 15 where it was held that: '... to come within the initial part of [section 8-1] it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income, or if none be produced, would be expected to produce assessable income...' Taxation Ruling 2024/3 Income tax: deductibility of self-education expenses incurred by an individual (TR 2024/3) discusses the circumstances under which self-education expenses are allowable as a deduction. TR 2024/3 provides that self-education expenses are deductible where a taxpayer's income-earning activities are based upon the exercise of a skill or specific knowledge, and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge. Self-education expenses are also allowable as a deduction where the study of the subject objectively leads to, or is likely to lead to, an increase in the taxpayers' income from their current income-earning activities in the future. Self-education expenses are not incurred in gaining or producing your assessable income if the following applies: 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 to soon to be regarded as incurred in gaining or producing your assessable income. Several court cases have established the principles followed in determining the deductibility of self-education expenses. | Detailed Reasoning - Incidental and relevant: If a course of study is too general in terms of your current income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist. In Case R60 , 84 ATC 447 ( R60 ), the Board of Review disallowed self-education expenses. The taxpayer was a public servant, and the position required relevant experience or some legal training (which the taxpayer already had) but not legal qualifications as such. In the circumstances, the continuation of the taxpayer's legal studies could not be characterised as a relevant incident of or as part and parcel of his employment. While the legal studies were specified as an advantage for the position held by the taxpayer and the taxpayer's legal training was relied on by the branch he was in, if the studies were discontinued, the branch would not have reacted at all. The branch head saw the encouragement given to the taxpayer as part and parcel of normal staff development. Similarly, in Case Z1 22 ATR 3549; 92 ATC 101 ( Z1 ), a public service clerk studying for a law degree later obtained a legal officer position in the public service. The qualifications as a solicitor were not necessary for her current employment. The expenses were held to have been incurred in getting work as a legal officer not in doing work as an employee and therefore not deductible. At all times the taxpayer was employed in a position where such qualifications were not necessary although the gaining of such qualifications were encouraged. The course was pursued by the taxpayer of her own choice and for her own self-improvement. We also reference, paragraph 42 of Taxation Ruling 98/9 which explains that if a course of study is too general in terms of the taxpayer's income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist, meaning that no deduction for self-education expenses would be allowable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Summary:: You have not demonstrated that there is a sufficient connection between the undertaking of the XXXX degree and your income earning activities in the positions held during your period of study. You are therefore not entitled to a deduction for your self-education expenses. While we accept that the degree may have resulted in a general improvement of your skills and knowledge, may have broaden your knowledge of the principal areas of legal concepts and may have led to you being generally better at your job in the aspects of interpretation of legislation, research and analysis, the outcome on completion of the degree far exceeds this by opening up other employment opportunities.