Agricultural workers – income and work-related deductions

Agribusinses Insights

Tax time hints, tips, and information if you are working as an employee in the agricultural sector.Tax time hints, tips, and information if you are working as an employee in the agricultural sector.

Read on for a simple guide on how to be prepared and ready for your accountant.


Income

Just like any other employee out there, your employer now reports your income on a regular basis to the ATO.

Through Single Touch Payroll an employer must notify the ATO, as part of their payroll process, gross wages, PAYG withholding and superannuation (amongst other things) for their employees.

This means that an employer no longer provides their employees with a paper summary at year end, but instead the amount is available to employees on their myGov account. Your accountant can also access this information through the Tax Agent Portal which means the process is simplified and you have one less thing to worry about providing to your accountant.


AllowancesJust like any other employee out there, your employer now reports your income on a regular basis to the ATO.

Your employer may provide you with any allowances which either compensate you with any aspect of your job, or help with paying for certain expenses, such as meals while you travel for work.

In these instances, an accountant may need to see evidence of money that you have spent, so it is a good idea to keep receipts that relate to any allowances. The allowance may be taxable, and you may be entitled to a tax deduction, however, a discussion with your accountant will provide you with clarity for each specific circumstance.


Reimbursements

You may also be reimbursed by your employer for any expenses that you have incurred.

A reimbursement is not an allowance, these payments are not income, and the corresponding expense is not tax deductible. 


Deductions

Some work related expenses may be treated as a tax deduction.

To claim a deduction you must have spent the money yourself and not been reimbursed, it must be directly related to earning your income and you must have a record to prove the expenditure.

There are various apps available to help you keep track of deductions, including the ATO’s myDeductions tool in their app.

These programs provide you with an easy way to capture information and can make tax time quicker, as all your expenses are tracked and in the same place, ready for your accountant.

Common agriculture industry deductions include:

  • Vehicle expenses
  • Clothing, footwear and laundry expenses including, hats and sun cream
  • Licence, permits and cards
  • Tools and equipment, as well as repairs, such as chainsaws or fencing tools
  • Working dog or working horse expenses
  • Travel expenses, if you are required to travel away from home overnight in the course of performing your employment duties.

Want to learn more?

If you would like to know more about employee deductions, your local RSM adviser will be happy to help.