ATO Self-Education Expenses Ruling 2024 | What You Can and Can’t Claim

Thinking of claiming your study costs on your tax return? The Australian Taxation Office (ATO) has released a new draft ruling on self-education expenses, clarifying what taxpayers can and can’t claim as deductions in the 2024 financial year.

Self-education what you can claim as an deduction ?

This article explains the latest ATO guidance, gives real-world examples, and helps you understand how to stay compliant while maximising your tax benefits.

I. What the New ATO Ruling Says

In early 2024, the ATO issued a draft ruling on the deductibility of self-education expenses.

While it doesn’t introduce new laws, it reinforces existing principles — particularly what constitutes a sufficient connection between your current income-earning activities and the education you undertake.

Simply put, the dominant rule is:

• If your course or study directly helps you perform your current job, it’s likely deductible.

• If it helps you get a new job or enter a different field, it’s not deductible.

II. When You Can Claim Self-Education Expenses

If you’re studying to maintain or improve the skills and knowledge you already use in your job, you can generally claim a tax deduction for related expenses — as long as your employer hasn’t reimbursed them. Crucially, you must be earning income from the job that the study relates to.

Examples of deductible self-education expenses include:

• Course or tuition fees (excluding Commonwealth supported places)

• Textbooks, stationery, and digital learning materials

• Internet and phone costs (apportioned for study use)

• Travel between home, work, and your place of study

• Accommodation and meals when attending courses away from home

• Airfares to attend work-related study events or training (if not local)

There is no cap on the amount you can claim, but the expenses must be directly related to your current income-earning activity.

III. When You Can’t Claim: Common Mistakes

Even if your course feels "related" to your job, the ATO looks at the dominant purpose of your study.

Non-deductible examples:

• A nurse’s aide studying a degree to become a registered nurse – the degree leads to a new occupation.

• A manager attending a stress management course – too general to be linked to specific work skills or knowledge.

• A teacher travelling overseas for a self-organised study tour – primarily private or recreational in nature.

In these situations, the course is considered personal or preparatory rather than directly connected to current employment.

IV. Overseas Study or Conferences: What Counts?

The ATO is strict about overseas education. To be deductible:

• The main purpose of the trip must be directly related to your work.

• You must spend the majority of your time in work-related sessions.

• The trip should ideally be approved or supported by your employer.

If your trip includes both work and leisure, you can only claim the work-related portion — for instance, claiming 50% of airfares if half the trip was personal. Keep detailed travel logs to justify this split.

V. Partially Deductible Courses

Even if an entire course isn’t deductible, specific subjects or modules may qualify.

Example: A civil engineer completes an MBA. The MBA itself might be too broad to fully deduct, but the project management subject within the MBA could be deductible if it directly relates to her current engineering role.

In such cases, course costs, materials, and associated travel must be apportioned between deductible and non-deductible components. This usually involves calculating the time spent on the deductible component versus the total time of the course.

VI. Government Assistance and ATO Red Flags

6.1. Government Assistance and FEE-HELP

If you study under a Commonwealth Supported Place (CSP), you cannot claim the course fees. However, if you are a full-fee paying student and use a FEE-HELP loan to cover the cost, your eligibility to claim remains unaffected. It's the type of enrolment, not the loan itself, that determines your ability to claim the deduction.

6.2. ATO Red Flags: Large Claims

There is no monetary limit on how much you can claim, but the ATO carefully reviews large self-education deductions. Postgraduate courses and professional degrees can be expensive, and the ATO expects a clear, documented link between the study and your current income.

Keep the receipt for self-education to claim deductions

Best Practice for Audit Protection:

1. Keep all receipts, enrolment records, and detailed course outlines.

2. Maintain a log of work-related study hours (if apportioning costs).

3. Be prepared to justify how the course enhances your current job performance in writing.

VII. Key Takeaways and Final Thoughts

Can Claim	Cannot Claim
Courses improving your current work skills	Courses helping you start a new career
Work-related conferences and training	Personal development or stress courses
Airfares to attend relevant study	Overseas travel with mostly leisure
Project-related modules in your current field	Entire degrees for unrelated professions

Understanding what qualifies as a self-education tax deduction can make a big difference at tax time. The new ATO 2024 draft ruling doesn't change the law, but it clarifies the boundaries and reinforces the importance of ensuring a direct connection between study and current employment.

If you’re unsure whether your study expenses qualify, don't risk an ATO audit—speak with a registered tax agent or accountant today to ensure your claims are structured correctly and compliant with the latest ATO guidelines.