A union fees tax deduction generally increases your tax refund, or reduces the amount of tax you need to pay. There are a few things to consider in relation to tax deductions for union fees, so read on and get all the info you need to claim union fees on your tax.
Unions play a significant role in protecting the rights and interests of workers across various industries. A union membership involves the payment of regular fees to support the union’s activities.
A question frequently asked by union members is, are union fees tax deductible? In this blog, we will explore the topic of union fees tax deductions and the criteria that determine their tax deductibility as well as where in your tax return you should enter your union fees.
What is a tax deduction
A tax deduction reduces your taxable income and the amount of tax you need to pay. The end result of a tax deduction is generally a bigger tax refund.
To claim a tax deduction you need to tick the following three boxes:
- you must have spent the money yourself and not been reimbursed by your employer
- it must be directly related to earning your taxable income
- you must have a record to substantiate it like a receipt.
Remember if your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims. As union fees are generally over $300, keep your receipts or payslips showing that you have paid union fees.
Are union fees tax deductible?
The short answer is that union fees are tax deductible. However, there is few things we need to consider because they are not always tax deductible. The ATO provide guidelines for whether you can claim a union fees tax deduction.
The ATO guidelines include:
- The union must be a registered union. The union must be registered under the Fair Work (Registered Organisations) Act 2009. Most major trade unions in Australia do meet this requirement.
- Employment related. The union fees must be directly related to the member’s employment activities. This means that the union fees paid should be to protect or advance the member’s work-related rights and interests.
- Voluntary union membership. A union fees tax deduction is only possible if the membership is voluntary. If the union membership is a requirement of employment or a condition of the employment agreement, the union fees are not tax deductible.
- You need documentary evidence. It is crucial to keep receipts or pay slips demonstrating that union fees have been paid. You will need to substantiate the union fees tax deduction.
These guidelines summarise the union fee tax deductible question and provide insight into some of the lengths the union must take to ensure that union fees are tax deductible for it’s members.
How to pay union fees
Union fees are recurring payments made by members of trade unions. These fees fund the union’s operations, including collective bargaining, industrial advocacy, legal representation, and other member services. The amount of union fees can vary depending on the specific union and the member’s employment agreement.
Union fees are typically paid through regular deductions from a members employment wages or salary. In many cases, employers deduct these fees and transfer them directly to the union on behalf of the employee. However, some unions may require members to make direct payments to the union themselves. How they are paid doesn’t impact the union fees tax deduction, but it does impact what substantiation documentation you need.
Where to claim union fees on tax return
Where to claim union fees on tax return now that we know whether the union fees pay are tax deductible is always the next question! Are union fees tax deductible, yes! Where to claim union fees on tax return – other work related expenses. All you need to enter on your online tax return is the total amount you have paid during the financial year for your union membership.
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Dealing with an online tax agent is the easiest way to complete your tax return. Just log in and select the year. Best thing is that like union fees, you can claim your online tax agent fees as a tax deduction. So, your union fees and your tax agent fees both increase your refund! One Click Life can also help with your Mortgage, Will, and Health Insurance, so you can spend more time on things that matter while saving money!