COVID-19 Tests for work are tax deductible

For Business | Tax
July 29, 2022

Throughout the COVID-19 pandemic, we have collectively adapted to a different way of life. Some of the biggest changes we have had to get across have been in the workplace – how we work, where we work, and when it comes to tax time, what we can and can’t claim. In all of this, you might have missed ATO’s announcements that COVID-19 testing expenses will be deductible at tax time.

With the accessibility of rapid antigen tests (RATs) and the necessity to have a PCR test before coming back to work or to travel again for work safely, employees and employers have both at times had to cover the cost of these tests.

Early this year, the ATO announced that the Government “make clear that work‑related COVID‑19 test expenses incurred by individuals will be tax deductible. This applies both when an individual is required to attend the workplace or has the option to work remotely.”

This change takes effect from the beginning of the 2021-22 tax year and will be in place permanently. To claim the deduction:

  • the test must have been used for a work-related purpose
  • you had to have paid for the test (Note: if you are the employee and were reimbursed by your employer for the test, then the employer can claim the expense, not you).
  • you need a record of the cost (i.e. receipt).

To determine whether your RAT can be claimed under ‘work-related purposes’ consider if the results directly affect your ability to work. For example, figure out whether you are able to physically attend your job or if you need to isolate. If a spouse, one of your children or another person using one of the tests you purchased, that test now becomes ineligible for claiming as it is not directly related to your income.

For more information visit the COVID-19 Test Expenses on the ATO website and if you are still unsure whether you are eligible to claim your COVID-19 tests get in touch with us today to speak with one of our professional advisors.

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