Dressing for tax effectiveness

Introducing uniforms to the workplace is a fantastic way to encourage a professional image for your company as well as save time and money for your team!

We have just introduced uniforms at Baker Affleck. On Melbourne Cup Day we held a fashion parade to show our new attire and while it may not have been the most colourful “Fashions on the Field” around the nation that day, our staff welcomed the new look and the financial benefits!

One of the challenges of having an office located on the Gold Coast - where the temperature is high and the attitude is casual - is the ability to maintain a professional look. For the team it is important to remain comfortable without having to spend a fortune on a second wardrobe different to their weekend attire. A corporate uniform answers some of these issues and takes the hassle out of dressing each day.

The tax treatment for both compulsory and non-compulsory uniforms is similar. However, for non-compulsory uniforms there are certain procedural requirements which must be met in order for an employee to claim a deduction for the cost and maintenance of the uniform.

A uniform comprises one or more items of clothing and is unique and distinctive to the organisation for which an employee works. Unique means that it is designed for the company specifically and is not simply generic. Distinctive means that it must have the business logo permanently attached to each major item, e g shirt/ blouse and pants/ skirt.

Compulsory means that you must wear the uniform and the policy is strictly enforced. Otherwise it is a non-compulsory uniform.

Baker Affleck has decided on a non-compulsory uniform policy – we have a selection of shirts which have been customized with our brand colour scheme in mind and feature the Baker Affleck logo.

In order for an employee to get a tax deduction for a non-compulsory uniform Baker Affleck was required to register the design with AusIndustry as corporate wear. Our staff are now entitled to claim a tax deduction for the cost of purchasing the uniform, laundry (up to $150 per annum without substantiation) and repairs. No deduction is allowed for shoes, socks or stockings.

As an additional incentive for staff to purchase the uniforms, Baker Affleck will pay for the uniforms upfront then take the cost out of gross salaries over eight pay periods.

For example

Baker Affleck customised shirt = $89.00 ex GST
$89.00 out of gross pay
$11.13 per week ($7.62 reduction in take home)
Plus staff can claim a tax deduction of up to $150 each year (i e $45.00 rebate)

Why introduce a corporate uniform:

less preparation and cost for staff each day;
professional look for the business – uniforms are designed to flatter most body types;
corporate uniforms are designed for easy wash and wear and are built to last;
tax free purchase out of salary; and
tax deductible laundering ongoing.

For more information contact your Baker Affleck accountant.