Hairdresser tools and equipment: the $300 rule

Your scissors, clippers, dryer and the kit bag they travel in are the deduction that defines this job, and also the one most stylists claim the wrong way. You bought them because a salon does not hand you a good pair of shears, so the money is yours to claim. What decides how you claim it is a single number. Once the $300 line makes sense, the rest of your tool spend falls into place behind it, and a good pair of shears stops being the thing you either overclaim or quietly leave off.

The $300 line, and why it matters so much to a stylist

The way you claim a tool turns on what it cost, and for a stylist that number bites harder than it does in most jobs. A comb or a set of clips is nothing. A good pair of shears is the opposite, and it tends to land on the wrong side of the line.

• $300 or less. You claim the full cost in the year you buy it. The ATO's own example is Hilary, whose $100 scissors come straight off that year's return.
• Over $300. You claim the decline in value, spread over the tool's effective life, rather than all at once. The ATO's Jeff buys a $500 hairdryer and depreciates it year by year.
• Where the shears sit. Good professional scissors and shears routinely cross $300, so they get depreciated, not claimed in one hit. This is the case people get wrong most often, precisely because it is the tool they spend the most on.
• The two mistakes. One is claiming an expensive pair of shears in full in year one when the cost has to be spread. The other is the flip side, and it is just as common: leaving your tools off the return entirely because someone told you tools are not deductible for employees. Both are wrong.
• Apportion the rest. If you also use a tool at home, claim only the work-use share. If you bought it partway through the year, count only the part of the year you owned it.

The set trap

The $300 line is judged on the whole, not the piece, and this is the part that catches people who try to buy their way under it.

• A set is one thing. A set, or a group of identical or substantially identical items you start to hold in the same year, that together costs more than $300 has to be depreciated, even when each piece on its own is cheap.
• Independent cheap tools are fine. Separate tools that each cost $300 or less, and are not part of a set, keep their immediate deduction. A comb here, a spray bottle there, a couple of clip packs: each stands on its own and comes off in full.

Sharpening, repairs and parts

The $300 line governs buying a tool. It has nothing to say about keeping one working, and the cost of that is deductible in its own right, however cheap the item.

• Sharpening and servicing. Getting your scissors sharpened or your clippers serviced is deductible regardless of the $300 rule. The ATO's Hudson claims the cost of repairing a straightener the same way.
• Blades, batteries and oil. Replacement clipper blades, the batteries for a cordless trimmer, and the oil you run through it are all running costs of a work tool, and they come off too.

Tool insurance and storage

The gear around your tools follows the tools. If it protects or covers your work kit, the work-use share is deductible.

• Tool insurance. A policy that covers your work tools and equipment is deductible for the work-use portion.
• Cases, rolls and kit bags. The scissor roll, the lockable kit bag, the case you carry your gear in: each is a work item and is deductible on the same footing as the tools inside it.

Only what you paid for

The first of the golden rules is that you spent the money yourself. A tool the salon supplied fails it before any of the $300 mechanics come into play.

• Salon-supplied tools are not yours to claim. If the salon owns the dryer, the wax pot or the clippers you use, you have not paid for them, so there is no deduction, no matter how much you use them.
• Your own kit is the claim. The deduction is the gear you bought and were not reimbursed for. That is the line the whole page runs on.

The write-off that isn't yours

Every generic tools-and-clothing article points you at the instant asset write-off. For an employed stylist it is the wrong rule, and reaching for it is how a return goes off the rails.

• It is a business concession. The instant asset write-off lets a business immediately deduct assets up to a cap the ATO sets, and it is turnover-tested. It belongs to businesses running an ABN, not to employees.
• Same shears, two answers. An employed stylist who buys a $900 pair of shears depreciates them over their effective life. A stylist renting a chair on an ABN can write the same shears off at once. The tool is identical; who you are to the tax office is not.
• Which one are you. If you are not sure whether you are a PAYG employee or a chair-renter running your own business, that changes what deductible means for everything, not just tools. Read the employed or chair-renter chapter before you lean on either rule.

The records behind your tools

Every tool above stands on the receipt behind it, and a tool-heavy claim is where the paper trail tends to go thin. You want a receipt showing the date, the supplier, the item and what it cost. For any tool you also use privately, keep a note of how you worked out the work-use share, because that split is the first thing questioned. And if your total work-related claims come to more than $300 across the year, you need written evidence for all of them, not just the shears. The ATO's free myDeductions app will hold your receipts if you enter them faithfully.

The bottom line

Sort every tool by what it cost you. Anything $300 or less comes off in full this year, anything over $300 is spread across its life, and good shears almost always sit in the second group. A set is judged as a whole, so cheap pieces bought together can still tip over the line. Add the sharpening, the servicing, the blades and the tool insurance, claim only what you paid for and not what the salon supplied, and leave the instant asset write-off to the chair-renters it was built for. Do that with the receipts to back it, and your tool bill lands on your return where it belongs.

General information only, not tax advice. Check the ATO or a registered tax agent for your situation.