With the rising popularity of online learning platforms like LinkedIn Learning, many Australians are wondering if they can claim tax deductions for the fees paid to access these courses. LinkedIn Learning provides users access to thousands of online courses taught by industry experts on topics ranging from business software to creative skills. For many professionals, investing in skills development through platforms like LinkedIn Learning is an important part of their career strategy. But can the costs be claimed as tax deductions in Australia?
The general rule for deducting education expenses
When it comes to claiming education expenses in your tax return, the general rule is that the course must have a sufficient connection to your current work activities. In other words, the course needs to be relevant to earning your current income, rather than being designed to open up a new income source or being private in nature.
The Australian Taxation Office (ATO) provides some guidance on what is considered a sufficiently relevant deduction for self-education expenses. Some key points include:
- The course maintains or improves the specific skills or knowledge you require in your current work activities.
- The skills or knowledge gained are utilized in practical ways in your current employment.
General education without a clear application to your current income source does not meet the deductibility criteria. The ATO also notes that the intention behind the learning activity should be to maintain or improve your competency or skills in your current role. Learning for a future role or to open up new income opportunities in the future does not satisfy the deductibility tests.
Claiming LinkedIn Learning subscriptions
When assessing if a LinkedIn Learning subscription can be claimed, the key considerations are:
- Is your purpose for using LinkedIn Learning relevant to performing your current work duties?
- Does the platform enable you to maintain or improve skills applicable to your current role?
Some examples where LinkedIn Learning use may meet deductibility requirements:
- An accountant accesses courses on new accounting software programs they are required to use in their current firm.
- A graphic designer strengthens their skills in tools like Photoshop that are relevant to producing client work.
- A project manager keeps their professional certification up to date through completing mandatory CPD courses.
These instances demonstrate a strong connection between the learning activities and the taxpayer’s current income source as an employee or business operator. The expenses support them in earning their current income, rather than gaining skills for future career aspirations.
Partial deductions
For many taxpayers, the scenario may be that some of their LinkedIn Learning use has a direct relevance to their current work, while other use is more general skill development not related to current duties. In this case, they may be able to claim a partial deduction for the portion of expenses related to their current employment.
It’s important to be able to logically estimate and apportion expenses between deductible and non-deductible use. Records of the purpose behind courses accessed can help to evidence and quantify this breakdown.
Substantiating your claim
To successfully claim education expenses like LinkedIn Learning costs, you need to be able to substantiate your deduction if required by keeping records such as:
- Receipts/tax invoices showing your payment of subscription fees.
- Certificates of completion for courses you have finished.
- A schedule detailing the courses completed and their relevance to your current employment.
You should also ensure any claims are for costs you have paid for yourself, rather than being subsidised or reimbursed by your employer.
Types of LinkedIn Learning expenses
Common expenses that may be deductible include:
- Subscription fees – The monthly or annual fees paid for your personal LinkedIn Learning account access. Note that deductibility depends on your usage being relevant to current work skills.
- Course fees – Fees for individual courses accessed on a one-off basis without an ongoing subscription.
Non-deductible expenses may include:
- Initial trial periods – Generally the initial free trial offered with LinkedIn Learning subscriptions is a non-deductible private expense.
- General personal use – Any component of subscription fees estimated as relating to building general skills rather than maintaining professional skills is not deductible.
Claiming deductions
To claim your deduction for eligible LinkedIn Learning expenses:
- Keep records such as receipts to substantiate your expenses.
- Apportion expenses between deductible and non-deductible use if required.
- Total your deductible expenses for the year and input this as a deduction when completing your tax return.
- If your deduction is greater than $300, you must also complete the Self education expenses section of your tax return.
- Retain your records for 5 years to support your claim if reviewed by the ATO.
Maximizing your deductions
Some tips to maximize the tax deductions available for your LinkedIn Learning expenses include:
- Clearly identify the courses that are relevant to improving skills in your current role and focus your learning on those areas.
- Maintain records not just of the expense amounts but also documenting the purpose behind accessing courses.
- Correctly apportion expenses where some use relates to deductible upskilling and some to non-deductible general learning.
- Don’t prepay subscription expenses substantially ahead of when the learning occurs, as prepayments may need to be apportioned over the period they relate to.
Common questions
Do I need to show my learning led to increased income?
No, you do not need to demonstrate that completing courses actually led to greater income from your current employment. As long as your purpose was relevant to your current role, the expenses can be deductible.
What if my employer reimburses me?
You cannot claim deductions for any components that are reimbursed by your employer. Only unreimbursed out-of-pocket expenses are deductible.
Do limits apply to deductions?
Yes, you can only claim the amount of expenses that reasonably relate to maintaining or improving skills relevant for current duties. Any component estimated as personal or relating to future career goals is not deductible.
Case studies
Jenny, architect
Jenny is an architect who pays $499 for an annual LinkedIn Learning subscription. She estimates that 70% of her course use relates to design skills relevant to her current projects. She has kept records showing the courses completed and their relevance.
Jenny can claim a $349 deduction for the portion of her subscription fees relating to her current employment ($499 x 70%).
Lee, property manager
Lee pays monthly LinkedIn Learning subscription fees of $29. His use is split between:
- Property management courses – deductible as relevant to his current work.
- Finance courses – to improve career prospects in future. Not deductible.
- Photography courses – personal interest. Not deductible.
Based on his usage logs, Lee estimates his breakdown between deductible and non-deductible use as 50% each.
So Lee can claim deductions for 50% of his annual subscription fees ($29 x 12 months x 50% = $174).
Conclusion
In summary, LinkedIn Learning subscription fees and online course expenses can be deducted in an Australian tax return in cases where the learning supports skills relevant and applicable to your current employment or business activities.
General principles for deductibility include:
- The learning relates specifically to your current work activities.
- It maintains or improves skills, knowledge and competencies used in your current role.
- Expenses are apportioned appropriately between deductible and non-deductible use.
Records should be maintained to evidence the purpose behind courses completed, and appropriate portions of expenses claimed. Subject to these conditions, investing in LinkedIn Learning access can form a valid tax deduction for many Australian professionals and businesses.