Private ruling: Self-education expenses
Date of advice: 13 April 2026
Published: 9 June 2026
Ruling period: Year ended XX XX 20XX | Year ended XX XX 20XX
Date scheme commenced: XX XX 20XX

Ruling: Q1: Are you entitled to claim a deduction for the course fees under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No

Relevant facts and circumstances: You are consultant in a medical profession. Consultants in that profession may progress to higher level roles within the umbrella company. You provided a copy of your cover letter which formally expresses your interest in the position. You provided copies of: XXXX KPIs XXXX KPIs Contract You undertook the following courses: • XXXX Course • XXXX • XXXX • XXXX The XXXX Course is listed on the selection criteria expression of interest. The role is within the same professional field, and the skills and knowledge developed directly relate to the private healthcare sector in which you work. The added value of a consultant in your profession in the higher level role is to provide clinical insight from a consultant in your profession who has an understanding and can communicate from a business perspective. Specifically, the skills and knowledge learned from these courses directly impact your day-to-day engagement with stakeholders, optimising my performance within the company. The education maintains and improves your capacity to earn income in my current profession and supports career progression within the same industry. You advised the courses maintain and improve capabilities, knowledge and skills already used in your current employment. Your employer provided allowance for the expenses for the XXXX course and the XXXX courses. A claim is not needed for these courses. The completion of the courses did not lead to an increased salary with your current employment in your current role as a consultant in your profession.

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

Reasons for decision: Summary: Your self-education expenses in relation to the XXXX course, XXXX and XXXX are not deductible as the courses do not have a sufficient connection to your current employment as a consultant in your profession. The courses are designed to prepare a consultant in your profession to progress to higher level roles. Your studies will give you new qualifications and enable you to obtain employment in the field. However, it has not been sufficiently demonstrated how the courses are sufficiently relevant to your present income-earning activities as a consultant in your profession. Expenses to undertake courses aimed at providing you with the knowledge and skills to advance to higher level roles are not considered to be incurred in the course of earning income as a consultant in your profession. In your case, the purpose of you undertaking the studies is for you to obtain a future higher level role rather than to enhance your current employment duties as a consultant in your profession. The courses do not have the relevant connection with your current employment as a consultant in your profession. Accordingly, the self-education expenses associated with undertaking the courses are not an allowable deduction under Section 8-1 of the ITAA 1997. | Detailed Reasoning - Detailed reasoning: 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, or relate to the earning of exempt 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... However, no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to open up a new income-earning activity, whether in business or in the taxpayer's current employment. Such expenses of self-education are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (see Federal Commissioner of Taxation v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161; and paragraph 22 of TR 2024/3). 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. A deduction is allowable for self-education expenses 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. Finn (1961) 106 CLR 60, (1961) 12 ATD 348. For the expense to be deductible it must be in gaining or producing assessable income. Paragraphs 16,18, 22, 23 and 25 of the TR 2020/1 state: 16. For expenses incurred by employees, the fundamental question is whether an expense is incurred in the course of earning employment income. This involves considering the proper scope of the particular taxpayer's work activities to determine if the circumstances of the expense have a sufficiently close connection to earning the employment income. 18. The reason or motive for undertaking the self-education is not determinative of whether the expense is incurred in gaining or producing your assessable income: In many, if not most, cases the objective relationship between an expenditure and that which is productive of income will provide a sufficient answer to the inquiry posed by [section 8-1]. 22. 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. 23. Accordingly, in some cases, expenditure would be regarded as too remote from the income-earning activities or incurred only as a prerequisite to earning income and not incurred in the course of producing that income. 25. Other examples of expenditure that would be too remote from the income-earning activity or incurred at a point too soon to be characterised as incurred in the course of earning assessable income, would be expenses of looking for and securing new employment. This would also be the case for relocation expenses to work in a different city or state. Similarly, education expenses to obtain qualifications for new employment would not be incurred in the course of gaining or producing relevant assessable income. The Commissioner is not satisfied that your study of the courses has the relevant connection to your income earning activities for it to be deductible under section 8-1 of the ITAA 1997. There is only a general link between completing this course and your employment. | Detailed Reasoning - Application to your circumstances: In your case your purpose of undertaking the courses is designed more for a future role at a higher level rather than to enhance your current employment duties. It has not been demonstrated that the courses will lead to an increase in your income from your current employment. Accordingly, the self-education expenses associated with undertaking the courses are not an allowable deduction. It is not sufficient to say that the study will enhance your ability to perform the duties of your employment. The nexus must be direct. It has not been sufficiently demonstrated how the studies are sufficiently relevant to your present income-earning activities. Consequently, the self-education expenses incurred in undertaking the XXXX and XXXX do not have the necessary and relevant connection with the earning of your current assessable income. You are therefore not entitled to a deduction for self-education expenses under section 8-1 of the ITAA 1997.