Quick answer
Self-education and training are deductible in Australia when they have a sufficient connection to your current income-earning activity: the course maintains or improves skills you use now, or is likely to lift your income from your current work. Study to change careers or get a first job is not deductible. The old $250 reduction was removed from 1 July 2022, so the full qualifying amount counts. Businesses deduct staff training as a normal expense.
Is professional development tax deductible in Australia?
The ATO’s test, set out in Taxation Ruling TR 2024/3, is about connection, not accreditation. Self-education has a sufficient connection to your employment or business income if it either maintains or improves the specific skills or knowledge you require for your current activities, or results in, or is likely to result in, an increase in your income from those activities. A bookkeeper doing an advanced payroll unit, a nurse completing a wound-care certificate, or a plumber taking a backflow-prevention course all pass.
Three situations fail. Study undertaken to obtain new employment, study that opens up a new income-earning activity, and general self-improvement that is too remote from the current work. The ATO’s examples are consistent: a law degree taken by someone working in an unrelated field is not deductible however useful it may prove later.
The arithmetic is simpler than it used to be. Until 30 June 2022 you had to reduce your allowable self-education expenses by $250 before claiming. That reduction has been removed for expenses incurred from 1 July 2022, so the whole allowable amount is deductible.
Business owners face the same test on their own development. Where the training is for employees, it is a standard business deduction, and the otherwise-deductible rule means no fringe benefits tax arises where the employee could have claimed it themselves.
How much can you claim?
Everything with a sufficient connection, at the study-use percentage where there is private use. Worked example: a Melbourne employed accountant enrols in a tax specialisation unit directly relevant to her current role. She pays $2,300 in course fees from her own pocket, $240 for textbooks, uses her $1,800 laptop 60% for study (decline in value share $324 in the year), and drives 18 round trips of 24 km to evening classes. The fees, books, laptop share, and travel at the cents-per-kilometre rate are all deductible, with no $250 reduction, giving a claim of roughly $3,250. Had she funded the fees through FEE-HELP they would still be deductible when incurred, but the loan repayments themselves never are.
| Item | Deductible? |
|---|---|
| Course and tuition fees for connected study | Yes |
| Textbooks, journals, stationery | Yes |
| Decline in value of computer and furniture, study-use share | Yes |
| Travel to classes, including car at cents per kilometre | Yes |
| Overnight accommodation and meals for a residential course | Yes, where away from home |
| Study to get a new job or start a new activity | No |
| HELP debt repayments | No |
| Fees for a Commonwealth supported place | No |
Travel follows the Australian travel rules, and a car used for study trips is claimed on the same cents-per-kilometre basis as other work travel.
GST on training
Accredited education by registered providers is GST-free, which means no GST on the invoice and no credit to claim. Commercial providers running seminars, workshops, and conferences charge 10% GST, and a registered business claims the input tax credit on the business share with a valid tax invoice. Employees are not registered for GST and simply deduct the GST-inclusive cost.
Record-keeping requirements
Keep the enrolment confirmation and course outline, not just the receipt; the connection to your current work is what the ATO tests, and the outline is the evidence. Keep receipts for fees and books, a diary of study-related travel, and the usage basis for any equipment. Records must be kept for five years from lodgment. The Australian record-keeping guide covers what counts as written evidence.
How to claim, step by step
- Before enrolling, write down how the course maintains or improves the skills you use in your current role, or how it is likely to lift income from it.
- Collect fees, textbook, stationery, and equipment receipts, and keep a travel diary for trips to the place of study.
- Apportion equipment, internet, and phone to the study-use percentage.
- Employees: claim the total as work-related self-education expenses on the individual return; no $250 reduction applies.
- Businesses: deduct staff training as an operating expense and claim GST credits on taxable courses.
- Keep the course outline with the receipts for five years.
Common mistakes
- Claiming a qualification aimed at a different career because it is “professional development”.
- Still subtracting $250 from the claim out of habit.
- Including HELP repayments as if they were course fees.
- Claiming a GST credit on a GST-free accredited course.
- Leaving out the travel and equipment components of an otherwise valid claim.
Software that helps
- Dext captures course invoices and enrolment confirmations and files them against the expense.
- ExpenseFlow reads training invoices with frontier vision AI, states the deductibility test under each line (whether it has a sufficient connection to current income-earning activity), lowers its confidence so a reviewer decides when the invoice does not show the course or the attendee, and syncs the result to Xero with the document attached, or to QuickBooks Online as a coded bill.
- MYOB supports an employee training expense category that maps to the business schedule labels.
FAQ
See the answered questions above for the connection test, the $250 reduction, included expenses, staff training, and GST-free courses.
From ExpenseFlow
GST coding on autopilot
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