Work Related Clothing

One query that we often receive is whether you can take a deduction for work related clothing when you are self-employed?  

Most jobs and businesses require you to wear certain clothing, whether that is a suit worn by a real estate agent, or waterproof clothing worn by a farmer working outside.  Often we purchase the clothing specifically for the job, and wouldn’t have purchased it otherwise. But does this make it tax deductible?

Tax deductions are not allowed for anything you could wear in your everyday life

Unfortunately even if you purchase clothing specifically for your work (i.e. there is a link between purchasing the clothing and earning income) the private limitation significantly restrictions tax deductions for clothing.

Broadly you are not allowed a tax deduction for anything that you “could” wear in your everyday life.  This is irrespective of whether you “would” wear that clothing outside of work! For example, suits worn by a real estate agent, office clothing worn by an accountant, or work shorts worn by a farmer, are not tax deductible costs.

So what can I deduct?

If you are self employed, the IRD will allow a deduction for “distinctive work clothing that is not suitable for private use, but is necessary for a particular occupation”. Depending on what the job entails, this could include:

-         Uniforms or distinctive branded clothing which advertises your business

-         Clothing required for health and safety purposes, such as hi-vis jackets, protective eye wear, steel capped boots, and waterproof clothing for working outside.  

If you earn a salary or wages then you can't take a tax deduction, but your employer could provide you a non-taxable clothing allowance/reimbursement or could take a tax deduction when they purchase and provide you with this type of clothing.

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Not sure whether your work clothing qualifies?

Give us a call or drop us an email, we can help answer any questions you might have.

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Please note that this information is of a general nature and specific advice advice should be sought for your situation.