Tool Allowance

What is the tool allowance in Australia?

The tool allowance in Australia refers to a specific type of allowance provided to individuals who are required to provide their own tools or equipment to perform their work or services for an employer. This allowance is reported as “tool allowances” with the allowance type TD (Tool Allowances).

For example, if a chef is required to bring their own knives or a diver needs to provide their own tanks, they may receive a tool allowance to compensate for the cost of these tools. Similarly, trade workers who use their own tools or employees who require a phone for work purposes may also receive a tool allowance.

Previously, this allowance was reported under “Other Allowances” with a description of the allowance type. However, it is now required to be reported separately as “tool allowances” with the allowance type TD.

Note: Services Australia categorises this type of allowance as an Expense Allowance.

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