Deductibility of COVID-19 tests

The government announced on 7 February 2022 that they will ensure COVID-19 testing expenses are tax deductible for testing taken to attend a place of work.

This will also mean fringe benefits tax will not be incurred by employers if they provide COVID-19 tests to their employees for this purpose.

Assistant Minister The Hon Michael Sukkar MP said the change will take effect from the beginning of the 2021‑22 tax year and will be in place permanently.

“To remove any doubt, the Government will introduce legislation to make clear that work‑related COVID‑19 test expenses incurred by individuals will be tax deductible,” he said.

“This applies both when an individual is required to attend the workplace or has the option to work remotely.

“This action recognises that COVID‑19 tests are an important tool for mitigating transmission risks and absences from the workplace.”

This measure is not yet law. The ATO will provide more detailed advice and guidance once the measure is enacted.

In the interim, if you have incurred expenses for COVID-19 tests, you should keep a record of those expenses.