FIFO workers play a vital role in Australia’s resources sector, but when it comes to tax, many are surprised to learn the rules are often stricter than expected.

Recent H&R Block Australia research found nearly half (48 per cent) of Australians have received an unexpected tax outcome, while 6 in 10 later questioned whether they’d lodged their return correctly.

With FIFO workers often navigating unique work arrangements and complex deduction rules, understanding what can and can’t be claimed is one of the best ways to avoid costly mistakes.

The golden rule: work-related vs private expenses

Like every taxpayer, FIFO workers can generally only claim expenses that are directly related to earning their income and that they paid for themselves without being reimbursed. While many FIFO expenses may feel work-related, the ATO treats a number of them as private.

One of the biggest factors is whether your worksite is considered your regular place of work. If it is, many travel and living expenses won’t be deductible, regardless of how remote the location is.

Travel: the deduction that catches people out

Travel remains one of the most misunderstood areas for FIFO workers.

In most cases, the cost of travelling between home and your FIFO worksite, including flights, fuel, airport parking and transfers, is considered private travel rather than work travel and generally can’t be claimed.

There are some exceptions. Travel may be deductible if you:

• travel between different worksites on the same day
• travel directly between separate employers
• transport bulky tools or equipment that can’t be securely stored at work.

Understanding these exceptions is important. H&R Block Australia research found that 71 per cent of Australians have at least one factor that makes their tax return more complex. For FIFO workers, travel rules are often one of the biggest areas of confusion and one of the easiest places to make an incorrect claim.

What FIFO workers can generally claim

Although travel and living expenses are often restricted, there are still a range of legitimate deductions available.

Tools and equipment: If you buy tools, safety equipment or other items required for your job and aren’t reimbursed by your employer, you may be able to claim them.

Protective clothing and laundry: Occupation-specific protective clothing, such as high-visibility gear and safety boots, together with eligible laundry expenses, may also be deductible.

Training and certifications: Training that directly relates to your current role or helps maintain your existing skills is generally deductible. However, study that qualifies you for a new occupation usually isn’t.

Phone and internet: If you use your personal phone or internet for work purposes, you may be able to claim the work-related portion, provided you have a reasonable method for calculating your claim.

Union fees and professional memberships: Industry union fees and professional memberships are often overlooked but are commonly deductible where they relate to your employment.

Expenses you generally can’t claim

Some of the largest costs FIFO workers incur are also the ones they are most surprised to learn aren’t deductible.

These commonly include:

• flights between home and your worksite
• accommodation provided while on site
• meals and groceries during your roster.

Where your worksite is your regular place of work, these are generally considered private living expenses.

The most common FIFO tax mistakes

Every year, the same errors appear in FIFO tax returns.

Claiming travel to site: Many workers assume travel to a remote worksite is deductible. In most circumstances, it isn’t.

Claiming meals and accommodation: Food and accommodation costs while working at a regular FIFO site are generally private expenses, even if you’re away from home.

Assuming allowances are tax-free: Allowances, overtime and bonuses are generally taxable income. Receiving an allowance doesn’t automatically entitle you to a deduction.

Estimating claims: Round-number claims without records or a reasonable basis for calculation can attract ATO attention.

Following advice from workmates or social media: Tax outcomes depend on your own circumstances. Advice that applies to someone else may not apply to you.

The bottom line

FIFO work comes with unique challenges, but tax law doesn’t always reflect the realities of working remotely.

The good news is there are still legitimate deductions available if you understand the rules and keep appropriate records. Focusing on eligible claims, rather than assumptions about what ‘should’ be deductible, can help you maximise your return while remaining compliant.

With H&R Block Australia research showing nearly half of Australians have experienced an unexpected tax outcome and many continue to second-guess whether they lodged correctly, taking the time to understand the FIFO rules before lodging your return can make all the difference. If your work arrangements are more complex or you’re unsure whether an expense is deductible, it’s worth seeking advice before you claim.