Kalkine : ATO Clarifies Makeup Claims During Tax Season in the Australia Equity Market

Highlights

• ATO confirms makeup is not a general tax deduction, with few exceptions.

• Only specific roles such as performers and flight attendants may qualify.

• Grooming products largely private, even when required by employers.

In the Australia equity market, companies involved in finance, retail, and public services, including those listed on the ASX 200 and All Ordinaries indexes, often see increased attention around the tax season. However, the Australian Taxation Office (ATO) has again emphasized the limits on what can be claimed in personal grooming deductions, a point often misunderstood by taxpayers.

Makeup Claims Not Generally Allowed

The ATO has reiterated that makeup and grooming products are not deductible under standard tax rules, even when a workplace mandates a specific appearance. These items are generally viewed as personal in nature, which excludes them from allowable work-related expenses. Products such as foundation, concealer, mascara, and skincare are covered under this category.

Specific Exceptions for Performers and Flight Crew

There are limited instances where such claims can be accepted. Individuals working in performance-based roles—such as actors or stage performers—may be eligible to deduct costs related to stage makeup. The product must be distinct from everyday consumer cosmetics and used strictly for professional performances.

In the case of flight attendants, a unique allowance is made. Due to the nature of their work environment, certain hydrating products used for skin and hair care may qualify. The conditions must directly relate to working in high-altitude or enclosed settings where atmospheric conditions can affect physical wellbeing.

Sun Protection for Outdoor Roles

While makeup is largely excluded, the ATO noted that sun protection items might be deductible when the occupation involves extended exposure to sunlight. This is applicable in fields like construction or agriculture, where workers spend significant time outdoors and require protection against ultraviolet exposure.

Workplace Expectations Do Not Qualify Expenses

A key clarification provided by the ATO is that employer expectations around appearance do not override the personal nature of grooming expenses. Whether employees are in client-facing roles or required to maintain a polished look, this does not make cosmetic products a deductible item.

No Blanket Claims for Personal Items

The tax office stresses that attempts to broadly claim grooming or cosmetic products as work-related deductions are incorrect. Each case is evaluated based on the specific nature of the job and how the product is used in a professional setting.

Caution Urged During Filing

Professionals handling tax returns are encouraged to ensure that deductions related to makeup and skincare are filed only in accordance with the strict guidelines issued by the ATO. Misreporting these items can result in queries or adjustments during audits.

This reminder aligns with broader trends in the Australia equity market, where service-oriented companies like Qantas Airways Limited (ASX:QAN), and entertainment firms such as Village Roadshow Limited (ASX:VRL) are affected by industry-specific taxation standards, often based on employment roles and their operational context.

Hydration Products for Specific Roles

Another point emphasized by the ATO involves the use of hydration products. These can be accepted under limited conditions, particularly in aviation or underground sectors, where environmental exposure may warrant the use of specialized skin and hair care.

As the financial year approaches its end, individuals across multiple sectors listed in the ASX 100 and other indexes are being urged to understand their obligations clearly. This measure is expected to reduce errors and ensure accurate reporting across the tax system.