Private ruling: Deductibility of self-educations expenses
Date of advice: 24 March 2026
Published: 11 May 2026
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you entitled to claim a deduction for self-education expenses under section 8-1 of the Income Tax assessment Act 1997 (ITAA 1997)? | A1: Yes. This private ruling applies for the following period: Income year ended 30 June 20YY Income year ended 30 June 20YY Income year ended 30 June 20YY Income year ended 30 June 20YY The scheme commenced on: 1 July 20YY

Relevant facts and circumstances: In MM 20YY, you commenced full time employment with the employer in a managerial position. You are responsible for the assets of your employer in locations throughout Australia. Your day-to-day duties include: • Leading and assisting in the development and review of Business and Strategic Plans. • Provision of commercial and general business support executive team. • Developing strategic insights executive team. • Management and on-boarding of consultants and contractors for major projects. • Identifying and implementing new improvement opportunities; and • Managing direct reports and other members of cross-functional project teams including consultants. Prior to being employed by the employer, you completed an undergraduate degree at a university. While employed by the employer, you have undertaken a course of self-education with the intention of enhancing your financial, people management and leadership skills to be applied in your current role and future roles. An application was prepared and lodged with a university to undertake a Master of Business Administration (MBA). The employer granted approval for you to undertake the study and gave an undertaking of continued employment. The MBA commenced on DD MM 20YY and was completed on DD MM 20YY at the university. The MBA course was undertaken part-time. Your first-year compulsory subjects were completed: Your second-year compulsory subjects were completed and provided a Graduate Diploma. Your third and final year of subjects were completed and resulted in an MBA. You were granted leave of absence to complete assignments and study requirements. You returned to full-time work with the employer on completion of the MBA. The expenses incurred in undertaking the MBA course were fees of $X. FEE-HELP was provided in the form of a loan which was used to pay the course fees. The employer subsidised some of the fees through their funding program. An applicant who is utilising the FEE-HELP scheme is eligible for the funding. The employer provided the following financial assistance: • DD MM 20YY $X • DD MM 20YY $X • DD MM 20YY $X • You received total financial assistance of $X. The application for assistance lodged with your employment supervisor contained a support statement stating: "the content within the graduate Diploma will add to the financial, people management and leadership skills that the applicant can apply to their current and future roles".

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

Reasons for decision: Summary: You are entitled to claim a deduction for your self-education expenses for total MBA course fees paid (less the financial assistance you received) as they have the necessary connection to your income earning activity and you have the required evidence to substantiate your claim. | Detailed Reasoning - Detailed reasoning: 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. The words "incurred in gaining or producing the assessable income" mean in the course of gaining or producing such income. The deductibility of self-education expenses falls for consideration under section 8-1 of the ITAA 1997. Therefore, in considering whether you are entitled to a deduction, it is necessary to consider whether the expenses were incurred in the course of gaining or producing your 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. 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. 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. However, no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to get employment, to obtain new employment or 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). | Detailed Reasoning - Application to your circumstances: In your case you are employed by the employer in a managerial position. While in your employment, you completed an MBA. You incurred costs for course fees in relation to undertaking the studies. You have demonstrated that the MBA will deepen your understanding and capability in performing your role with the employer. It is considered that the study will maintain or improve your skills and knowledge used in your income earning activity by enhancing your skills in (but not limited to) management, leadership, strategy and innovation. This is supported by a letter from the employer. Your self-education expenses are considered to have the relevant connection to your income earning activities as you completed the MBA in order to assist your current job. It is not considered to be opening up a new income-earning activity. In addition, you have the necessary receipts to substantiate your claims. Therefore, the net expenses incurred by you in relation to your MBA course (after deducting the financial assistance you received) are considered allowable as a deduction under section 8-1 of the ITAA 1997 for the income years in which they were incurred. | Detailed Reasoning - FEE-HELP: You are entitled to claim a deduction under section 8-1 of the ITAA 1997 even though you have obtained a loan for the payment of your course fees under FEE-HELP. The deduction is claimed in the income years in which the expense has occurred, that is, when you are liable for the expense. This is the time the costs are incurred by you and, therefore, the date on the university's invoice is the date used when claiming these expenses. However, the repayments of FEE-HELP are re-payments of a loan used to pay the fees and are not deductible.

Question: Are you entitled to claim a deduction for self-education expenses under section 8-1 of the ITAA 1997?