Tax Benefits for Employees and Employers with a Corporate Uniform

At JEM Promotional Products we believe that there are many benefits associated with having a Corporate Uniform not only for the company but for the employee also. In our article The Benefits of a Company Uniform we outline what these benefits are, however in this article we are only going to be focusing on the Tax benefits associated with Corporate Uniforms.

Please note that we are not Tax experts and the information below has been copied from the AusIndustry Website . You will need to check the website for any updates to the Approved Occupational Clothing Guidelines since the time when this article was written.

The Textile, Clothing and Footwear Register allows employers to register non-compulsory occupational clothing, thereby avoiding liability for Fringe-Benefits Tax and allowing employees to claim the cost of such clothing as a tax deduction.

Registered uniforms attract the following benefits:

Employers are exempt from Fringe Benefit Tax on any contributions they make toward the uniform.
Employees are eligible for tax deductions for expenses incurred in the rental, purchase or maintenance of approved non-compulsory occupational clothing.

The level of tax deductions is determined by the Australian Taxation Office.

Requirements at a glance

To be approved, the uniform design must meet the requirements of the Approved Occupational Clothing Guidelines. Here are some hints to help you do that:

The uniform must be a complete outfit, eg. dress, shirt and trousers, shorts, and/or skirt.
A company identifier (discrete logo/ name/ initials) must be on all items in the uniform, including accessories.
For garments, the identifier must be at least 80 per cent of a four cm square, or for accessories, such as a tie or scarf, a one cm square.
Identifiers must be in a contrasting colour to the garments they are attached to in order to be seen and legible from two metres away
Identifier must be permanently attached to each garment (eg. embroidered, iron on, heat seal)
A maximum of eight colours (which includes different shades of a colour and excludes those found in the identifier) for the entire garment range is allowed
The number of colour/pattern/print combinations permitted is limited by the number of employees in a class (see paragraphs 31-32 of the Approved occupational clothing guidelines).
Where a variation on a uniform is worn by different groups in an organisation, there must be a common theme between these groups or classes of employees and the male and female uniform
The uniform must be appropriate for the duties of the employee.

A common mistake

A common mistake applicants make is to have too many colour/pattern/print combinations in the different clothing categories of the uniform.

The number of colour/pattern/print combinations permitted in each category is dependent on the employee size of the organisation and each class (see page 8-9, paragraphs 31-32 of the Guidelines and page 2 of the application form).

For example, as outlined on page 9 of the guidelines, an employer with 50 employees in one class (sales, administration and management) who are all wearing the same uniform, may use the following combinations:

What is a class of employees?

A class is the group of employees who will wear the uniform.
There can be one class for the whole organisation which includes people from various departments or work areas.
Only where there is a slightly different uniform for separate groups of employees should two or more classes be nominated.
In this instance there would need to be a common colour in the uniforms to satisfy the requirement of a common theme between classes.

Clothing ineligible for the register

The following items cannot be included on the non-compulsory uniform register:

compulsory uniforms
occupation-specific clothing such as a chef’s check pants and white shirt
protective clothing

Please telephone the Australian Taxation Office on 13 28 61 for details of concessions and eligibility on these uniforms and clothing items. Should you have an enquiry about TCF Corporatewear, please contact the TCF Corporatewear team via the AusIndustry Hotline on 13 28 46 or email hotline@ausindustry.gov.au

If you would like assistance creating a Corporate Uniform please do not hesitate to contact us (02) 8205 1334 or enquiries@jempp.com.au.

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