The ATO recently released a final taxation ruling (TR 2024/3) which consolidates and updates its previous rulings (now withdrawn) on the deductibility of self-education expenses under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Generally, work-related self-education expenses are tax-deductible if they enhance skills and knowledge, or lead to an income increase related to current income-producing work, for the person claiming the deduction. 

Self-education expenses are the costs you incur when you:

• undertake courses at an educational institution (whether or not the courses lead to a formal qualification);
• attend work-related conferences or seminars;
• do self-paced learning and study tours (whether within Australia or overseas).

Self-education expenses are tax-deductible if 

• your income-earning activities are based on the exercise of a skill, or some specific knowledge, and self-education enables you to maintain or improve that skill or knowledge; and/or
• the self-education objectively leads to, or is likely to lead to, an increase in your income from your income-earning activities in the future (e.g. through a real opportunity of promotion, or eligibility for a higher pay grade or bonus).

You cannot deduct self-education expenses if 

• the education is undertaken or designed to obtain employment, obtain new employment, or open up a new income-earning activity (whether in a business or in current employment).
• if you weren’t undertaking income-earning activities to derive assessable income (either by employment, carrying on a business or other means) at the time you incurred the self-education expense. 
• Additionally, you can’t claim a deduction for any government assistance you receive in the form of rebatable benefits (e.g. Youth Allowance, Austudy, ABSTUDY).

For self-education expenses that are only partly deductible, you need to apportion the amounts spent and claim only the part that relates to an income-earning purpose.

If you’d like to know more about this topic or discuss your individual circumstances, please contact Clarity Tax Consulting at (02) 8233 6158 or email us at info@claritytaxconsulting.com.au and we can suggest some solutions.