The Accountants

Basic Laundry Deductions: What You Need to Know and Why They Matter

When it comes to tax deductions, many people overlook the importance of laundry expenses. If you wear a work uniform or occupation-specific clothing, you may be entitled to claim a deduction for the cost of washing, drying, and maintaining your work attire. The Australian Taxation Office (ATO) has specific rules around this, and keeping accurate records is crucial to ensuring you receive the deductions you’re entitled to. Here’s why claiming laundry deductions is critical and how to do it correctly.

1. Who Can Claim Laundry Deductions?

Laundry expenses can only be claimed if you are required to wear occupation-specific clothing, a work uniform, or protective clothing that is unique and necessary for your job. This includes:

• Nurses, doctors, and healthcare workers wearing scrubs
• Chefs and hospitality workers wearing employer-mandated uniforms
• Tradespeople wearing protective gear (e.g., high-visibility shirts, steel-capped boots)
• Corporate employees required to wear a registered uniform with a company logo

What you can’t claim: Everyday clothing, even if your employer requires a dress code, is not deductible. For example, a business suit does not qualify.

2. How Much Can You Claim for Laundry?

The ATO allows a standard deduction for laundry expenses:

• $1 per wash if washing only work-related clothing
• 50 cents per wash if washing both work-related and personal clothing together
• You can claim up to $150 in laundry expenses without needing written records.

If your laundry expenses exceed $150, you must keep detailed records, such as receipts for detergent purchases and a diary of washing schedules.

3. Other Work-Related Clothing Expenses

In addition to laundry costs, you may also be able to claim:

• Dry-cleaning costs for work uniforms
• Clothing repairs and alterations
• Replacement of protective workwear

To maximise your claim, keep all receipts and ensure your deductions are directly related to your job.

4. Why Are Laundry Deductions Important?

While laundry deductions may seem small, they can add up over time. For employees who wear mandatory uniforms or protective clothing daily, these expenses can make a difference in reducing taxable income. Every legitimate deduction lowers the amount of tax you owe, putting more money back in your pocket.

Additionally, claiming laundry deductions correctly ensures you comply with ATO regulations and reduces the risk of audits or penalties for incorrect claims.

5. Keeping Records for Your Laundry Expenses

If your claim is under $150, you don’t need receipts, but keeping a log can still be useful if questioned by the ATO. If your laundry expenses exceed this amount, you must keep:

• Receipts for dry-cleaning and washing costs
• A diary of washing frequency (e.g., how often you wash your work uniform)
• Bank statements as proof of purchase for detergents and other cleaning products

6. Common Mistakes to Avoid

• Claiming for everyday clothing: Only job-specific uniforms and protective clothing are eligible.
• Overestimating washing frequency: The ATO may question excessive claims, so be reasonable.
• Forgetting to keep receipts: If claiming over $150, documentation is required.

7. Seek Professional Advice

If you’re unsure about what you can claim for laundry or work-related clothing, consulting a tax agent can help ensure compliance while maximising your deductions.

Final Tip: Don’t Miss Out on Your Entitled Deductions

Many workers are eligible for laundry deductions but fail to claim them. If you regularly wash job-specific clothing, you could be leaving money on the table. Keep records, stay informed, and claim what you’re entitled to this tax season!

The Team at The Accountants and The Finance Brokers are here to help you navigate your cash flow requirements in your business. We offer complimentary cash flow reviews and assist you in understanding your finance needs.