Volunteers are valued members of many organisations, ranging from sporting clubs and environmental groups to charities and community services. If you are a volunteer, this might affect what you can deduct and what is treated as assessable income.
Deductions for volunteer work: What Would I Claim as Income?
While most volunteer work is unpaid, occasionally payments are made in the form of allowances, rewards and reimbursements.
These are payments given to a volunteer to cover expected future costs and are paid out even if the full amount of the allowance isn’t spent. These types of payments are rare, and will be classified as assessable income.
This refers to any financial payments made to a volunteer in the form of honorary rewards for contributions or service. Generally, this type of payment is not treated as assessable income, unless they are received for professional services.
For example, Adam is an electrician who volunteers at a local charity. One weekend he performs electrical work around the office and receives $50 as an honorary reward. This reward would be considered a part of Adam’s assessable income as he has provided a professional service.
Reimbursements are payments made to volunteers to cover previous expenses incurred by a volunteer. This is the simplest and most common way that volunteers recover out of pocket expenses. These payments are not treated as income and do not need to be claimed as assessable income.
What Can I Claim as a Deduction?
As previously mentioned, most volunteer work does not contribute towards your assessable income. Therefore any expenses incurred for the purpose of your volunteer work cannot be claimed as deductions.
For example, Daniel is a lawyer and volunteer firefighter and has purchased a pair of boots for the purpose of wearing while performing his duties for the fire station. Daniel would not be able to claim the price of the boots because they were not used in gaining or producing his income.
However, donations or gifts made by the volunteer can be claimed as long as they meet the following criteria:
- Made voluntarily
- Made to a deductible gift recipient
- In the form of money ($2 or more) or certain types of property
This is the same criteria for all tax payers making donations. As a result of this criteria, a volunteer cannot claim their time or services as gift, because there is no money or property being transferred.