Deductible expenses for wage and salary earner

For wage and salary earner, DA 2(4) ITA 07 applies to deny a deduction for an amount of expenditure or loss to the extent to which it is incurred in deriving income from employment. Thus, this employment limitation prohibits employees to claim deductions.

However, wages and salary can claim these following expenses.

• Accounting fees if you apply through a tax refund company or an accountant.
• Donation paid through the financial year. Wage and salary earner can get a tax credit back for their donations, as they have to file IR 526. Normally, it will be 33.33% of the donated amount.
• Income protection insurance can also be claimed as deduction. The employment limitation does not apply to wage and salary earner, because any benefit received under the policy is not income from employment. However, please note: if you receive any benefit under this insurance, that amount will be recorded as income for you.

If you want to apply for tax refund, please seek professional advice on what expenses can you claim. 

Disclaimer: The following answer necessarily sets out general principles only. The facts of particular cases always need to be considered carefully, and it may be necessary to obtain advice from a tax expert.

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