Tax Deductions for Sales Representatives

Average weekly pay:           $1,200 
Employment size:                126,300  
Future growth:                      Stable        
Skill level                                 Certificate II or III       

Sales representatives represent companies to sell their goods and business services to wholesale and retail establishments. Tasks include:

• Promoting and selling their company’s goods and services, visiting clients, quoting prices and credit terms, recording orders and arranging deliveries.
• Monitoring clients’ changing needs and competitor activity, preparing sales reports and submitting records of business expenses incurred.

Typical tax deductions include:

• Motor vehicle expenses incurred visiting clients and attending training. Normally using the log book method maximises the deduction.
• Motor vehicle expenses to and from work if required to carry bulky equipment when visiting clients, i.e. client samples and demonstration equipment that are at least 20 kg.
• Home office occupancy expenses including rent or mortgage interest, council rates and house insurance premiums. Only deductible if the employee’s place of business is their home office as their employer doesn’t provide them with office space.
• Work-related phone calls. Also, phone rental if the employee can show they were on call or had to call their employer or clients regularly while away from the workplace.
• Depreciation on computers, cameras, video recorders, and laptops. Each item that costs less than $300 can be expensed upfront.
• Referral commission and expenses.
• Handbag, satchel or briefcase.
• Meals and accommodation if required to be away overnight on sales trips or for training/conferences. 
• Internet and home office expenses.
• Corporate uniform.
• Renewing a sales certificate or work-related memberships. 
• Non-entertainment gifts bought for work purposes if a salesperson is entitled to receive income from commission or both commission and retainer. Examples of deductible gifts include a Christmas hamper, a bottle of whisky, wine, gift vouchers, flowers, etc.
• Work-related short training courses, for example, first aid, OH&S, bookkeeping, sales techniques, customer service, merchandising, computer skills or management. 
• Self-education course fees, the cost of books, stationery, equipment and travel required for the course.

Non-deductible expenses:

• Advertising –  if earning income from a fixed salary and not entitled to earn a commission.
• Gifts – if earning a fixed income and not entitled to earn a commission.
• Entertainment expenses because they are specifically disallowed under the tax law and they are also a private expense. For example, if buying lunch for a client or business associate, the food and drink expense is ordinarily a private matter, rather than a working or business expense.
• Expenses incurred in attending social functions e.g. monthly sales representative networking breakfasts.