An important role of human resource management is to manage compliance with internal human resource policy and external human resource legislation, including compliance with employee and employer tax obligations. Considering it is tax season, it is timely to devote this edition’s column to advice on the tax obligations of security industry employees.
Any legitimate expenditure made in the course of your employment is deductible. Like law enforcement and the military, security industry employees have unique tax employment circumstances that entitle them to legitimate tax deductions. All employees receiving fortnightly pay should be aware that, for the 2015–16 tax year, you should have paid more tax per fortnight than normal. The reason is that for this year only there are 27 tax periods, but you have only paid tax on 26, which means that if you paid ‘normal’ tax per fortnight, you would not have paid enough tax. The result of this is that you will either owe the Australian Taxation Office (ATO) a small amount when your return is submitted or your tax return will be smaller than expected.
If you started with a new employer this year, ensure you have provided them with your tax file number. Further, ensure you and your employer keep that number secure to avoid the potential for identity theft. If you do not supply your employer with your tax file number, you will be taxed at the highest marginal tax rate.
If you have a higher education (HELP) debt, ensure your employer takes out additional tax to cover the ATO rule. If you do not, you will owe the ATO money which will be either taken out of your return or sent to you as a tax liability. If you forgot to tell your employer of the debt last year, ensure you tell them this year.
Your payment summaries should have been given to you in the first week of July. If not, you need to see the human resources department or, in smaller businesses, your boss. If you do not have a tax agent acting for you, you have until the 31st of October this year to submit your tax return. If you have a tax agent, you have until the 15th of May next year (2017).
The tax-free threshold is $18,000. This means that if you earned less than $18,000 last financial year, you will not pay any tax. However, it is to your advantage to submit a tax return so you can receive a refund for the tax you have paid this year. To assist you in compiling your tax return, the ATO produces and makes available a ‘Pre-fill’ form. This form provides information to assist you in accurately declaring dividends and interest earned. The form is readily available from your MyGov site.
As previously stated, the security industry is in a unique position in so far as the list of allowable deductions is concerned. In relation to your motor vehicle, if you use the motor vehicle in the course of your employment, then any associated expenses could be deductible. These include travel to and from courses or places of education. You are entitled to claim up to $150.00 for laundry and an unlimited amount for dry cleaning of uniforms, uniform maintenance and purchase of protective clothing. You are also entitled to claim:
- union fees
- the cost of applying for and renewing your security licence
- the purchase cost of a pistol and ammunition if you are licensed to possess one and need it for your occupation
- gun safe if you are entitled to store your weapon at home
- repair and maintenance costs for your pistol
- tools such as leatherman, knives and pouches
- the cost of your mobile phone, provided you use it for your employment
- any stationary you use for your occupation
- any industry and union journals
I hope this assists you in compiling your tax return. Please be advised that this is general advice only and you should refer to a tax professional for any issues you have regarding your personal tax situation.
Note: Advice from a professional tax agent was sought to assist in compiling the information in this column.