Deductibility of COVID-19 Tests The Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022 received Royal Ascent on 31 March 2022. The Bill outlines the amendment of the Income Tax Assessment Act 1997 to allow individuals to deduct the cost of taking a COVID-19 test to attend their workplace on or after 1 July 2021. To deduct the cost of taking a COVID-19 test, you must meet the following requirements:
  1. You are an individual;
  2. You incurred the loss or outgoing for a qualifying COVID-19 test; and
  3. The test was taken to determine whether you could attend or remain at your workplace.
Both polymerase chain reaction (PCR) tests and TGA approved rapid antigen tests (RAT) are qualifying COVID-19 tests. As RATs are commonly sold in a multipack, the amount of the deduction must be reasonably apportioned when part of the pack is used for private purposes. As a result of the above changes, an employer will not be liable for FBT where they provide a COVID-19 test to their employee on or after 1 July 2021 to determine whether they are able to attend their workplace. This is due to the 'otherwise deductible' rule applying.