Private ruling: Self-education expenses
Date of advice: 28 November 2025
Published: 12 January 2026
Ruling period: 1 July 20YY to 30 June 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Are you entitled to claim a deduction for course fees under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes.

Relevant facts and circumstances: You provided a copy of your employment contract as at DD MM 20YY with Company A signed and dated DD MM 20YY. You provided details of the skills and knowledge required to complete your employment duties You have enrolled in a Graduate Diploma in xx (Diploma) at a university and will complete specific subjects. You advised that you will be a full fee-paying student and will be studying part-time while continuing to work full-time. You provided a letter dated DD MM 20YY issued by the Managing Director of Company A confirming that you are not provided any financial assistance, reimbursement or sponsorship for the Graduate Diploma course.

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 xx [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 xx 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. Taxation Ruling TR 98/9 (TR 98/9) provides the Commissioner's view for the circumstances under which self-education expenses are claimable as a deduction. TR 98/9 provides that a deduction is allowable for self-education if a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v xx (1961) 106 CLR 60, (1961) 12 ATD 348). Similarly, if the study of a subject of self-education objectively leads to or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future a deduction is allowable. | Detailed Reasoning - Application to your circumstances: 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 your university fees and your current income earning activities in your current position. 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 Commissioner is satisfied on the occasion that you have shown connection to your employment activities for the specific subjects ruled on by providing your employment contract and an explanation from yourself and your employer as to how each subject relates to these activities. | Detailed Reasoning - Summary:: You have demonstrated that there is a sufficient connection between the undertaking of the specific subjects detailed in your facts and your income earning activities in your current position. You are therefore entitled to a deduction for your self-education expenses under section 8-1 of the ITAA 1997.