Deduction for COVID-19 test expenses

From 1 July 2021, if you’re an employee, sole-trader or contractor and you have paid for a COVID-19 test for work-related purposes, you can claim a deduction.

From 1 July 2021, to claim a deduction for the cost you incur to pay for a COVID-19 test, you must:

• use the test for a work-related purpose, such as to determine if you can attend or remain at work
• get a qualifying COVID-19 test, such as a
  • polymerase chain reaction (PCR) test through a private clinic
  • other tests in the Australian Register of Therapeutic Goods, including rapid antigen test (RAT) kits
• pay for the test yourself (that is, your employer doesn’t give you a test or reimburse you for the cost)
• keep a record to prove that you incurred the cost (usually a receipt) and were required to take the test for work purposes. https://www.flyonit.com.au/

You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.    

You can’t claim the cost of a COVID-19 test where any of the following apply:

• you use the test for private purposes – for example, to test your children before they return to school or day care
• you receive a reimbursement for the expense from your employer or another person
• you work from home and don’t intend to attend your workplace.

You also can’t claim a deduction for the travel or parking expenses you incur to get your COVID-19 test because these expenses don’t have a sufficient connection to you using a COVID-19 test.

Example: COVID-19 tests you can claim

Anne is a casual employee at a local café. In April 2022 Anne buys a qualifying multipack of COVID-19 tests, which she only uses before commencing a shift if she has any COVID-19 symptoms or has been in contact with a COVID19 case. Her employer doesn’t reimburse her for the cost of the COVID-19 tests.

Anne can claim a deduction for the cost of these COVID-19 tests.

Example: personal and work-related use and deductibility

Mark buys a qualifying 2 pack of COVID-19 tests at the local pharmacy. Mark uses one test to confirm he doesn’t have COVID-19 before attending a local sporting event. A week later he realises that he has been exposed to COVID-19 and uses the other test to check his COVID-19 status before attending his place of work.

As Mark used one test for personal use and one test for work purposes, he can only claim a deduction for half the cost of the COVID-19 tests.

You need to keep records of COVID-19 tests to demonstrate that you paid for the test and the test was required for work related purposes. This may include a receipt or invoice, and correspondence from your employer stipulating the requirement to test.

Contact Expert Tax on 0449 952 855 (Williams Landing) or 0404 667 909 (Doreen) for further assistance.