Tax Deductions for Factory & Manufacturing Workers (2025–26)

Updated for the 2025–26 income year, with 2026–27 changes noted. Reviewed 19 October 2026.

Process workers, machine operators, packers, storepersons and production staff in factories and warehouses can usually claim their protective gear, laundry and licence renewals.

This guide covers 2025–26 tax returns (lodged from July 2026) and flags what changes in 2026–27. It follows the ATO's Factory workers – income and work-related deductions guide, rewritten in plain language with practical examples.

What you can claim

Factory-specific costs

• Protective items: steel-capped boots, gloves, earplugs, safety glasses, hairnets and respirators you buy yourself.
• Renewing a licence you need for your current job, such as a forklift licence.
• Tools you use for work ($300 rule applies).

Uniforms, protective clothing and laundry

Compulsory uniforms, registered non-compulsory uniforms, occupation-specific clothing and protective clothing are claimable, along with the cost of washing them: the ATO accepts $1 per work-only load and 50c per mixed load. Plain conventional clothing (black pants, a white shirt, business attire) is not claimable, even if your employer requires it.

Overtime meals

You can claim an overtime meal only if you received an overtime meal allowance under an industrial award or agreement and it is included in your income. Without receipts, you can claim up to the ATO's reasonable amount ($38.65 per meal for 2025–26), but you need receipts if you claim more. Meals during normal hours aren't deductible.

Training and self-education

Course fees, textbooks and seminars are claimable if they maintain or improve the skills you use in your current job, or are likely to increase your income from it. Study to get a new job, or general interest courses, can't be claimed, and neither can study loan (HELP) repayments. You can't claim costs your employer pays or reimburses.

Union and professional fees

Union fees and subscriptions to professional or trade associations related to your work are claimable. These don't reduce the 2026–27 standard deduction, so you can claim them on top of it.

What you can't claim

• Your ordinary driver's licence.
• Getting a forklift or other licence for the first time.
• Travel from home to the factory, including shift work.
• Music, headphones or streaming for use at work.

Worked example

Example (illustrative figures only – not real client data): Ali works rotating shifts in a food factory. He buys his own boots and gloves, washes his uniform at home, and renews his forklift licence.

2026–27 comparison: only $744.90 of these expenses reduce the standard deduction. On similar figures in 2026–27, it would usually be simpler to accept the automatic $1,000 standard deduction and not claim those items, while still claiming the $450 of union or professional fees on top.

Checklist before you lodge

• Check your overtime meal allowance appears on your income statement.
• Keep receipts for protective gear.
• Check your income statement in myGov is marked 'tax ready' and every allowance is included.
• Remove any expense your employer paid for or reimbursed.
• Apportion anything used privately and keep a note of how you worked out the percentage.

Common mistakes to avoid

• Claiming travel to early or late shifts.
• Claiming overtime meals without an award allowance.
• Claiming a first licence.

Record keeping

• You must have spent the money yourself and not been reimbursed, the expense must be directly related to earning your income, and you need a record to prove it.
• Keep receipts, invoices or bank statements for 5 years from when you lodge. The ATO app's myDeductions tool or photos of receipts are fine.
• If you use something for both work and private purposes, you can only claim the work-related portion – keep a diary or other evidence of how you worked that out.
• 2025–26: if your total work-related claims are $300 or less you don't need written evidence (but must be able to show how you worked the amount out), and laundry claims up to $150 can be made without written evidence using the ATO rates.
• From 2026–27: those $300 and $150 exceptions are removed. A new standard deduction of up to $1,000 applies automatically for eligible employees; if your actual work-related expenses are higher, you can claim them instead with records.

When to see an accountant

Talk to a registered tax agent if:

• you're unsure whether an expense is private or work-related, or your claims are much higher than last year;
• you have an ABN, side business or rental property as well as your job;
• you have received an ATO letter, review or amended assessment.

Related guides

• Meat workers
• Tradies
• all occupation and industry guides

ATO sources for this guide

• ATO: Factory workers – income and work-related deductions
• ATO: Clothing, laundry and dry-cleaning expenses
• ATO myTax 2026: Work-related clothing, laundry and dry-cleaning
• ATO: Overtime meal expenses
• ATO: TD 2025/4 reasonable amounts (2025-26)
• ATO: Self-education expenses
• ATO: Seminars, conferences and training courses
• ATO: Union fees and subscriptions
• ATO: Professional memberships and accreditations
• ATO: Records you need to keep
• ATO: Standard deduction for work-related expenses
• ATO: Copyright notice

This guide is written in our own words. It draws on information published by the Australian Taxation Office, and some short phrases are quoted with attribution. Source material: © Australian Taxation Office for the Commonwealth of Australia. Top Accountants is not endorsed by, or affiliated with, the ATO.