Can I Claim Self-Education Expenses? Here’s What You Need to Know

Many professionals invest significant time and money into further study, whether it’s an MBA, postgraduate qualification, or specialised leadership course, with the hope that it will advance their career.

But a question that comes up every year is:

Can your education expenses actually reduce your tax?

The short answer is: sometimes, but only if strict conditions are met, and the ATO is satisfied that there’s a direct link between your study and your current income.

In this post, we unpack how self-education deductions work in Australia, what the ATO expects, and how you can make sure your claim is legitimate and effective. We use a practical example to explain key concepts like FEE-HELP, HECS-HELP, the nexus test, and employer allowances, and finish with actionable guidance for taxpayers considering further study.

Many professionals undertake further study to advance their careers, often with some level of employer support. In some cases, course fees are paid upfront, while others use the FEE HELP loan system to manage the cost over time. It is also common for employer contributions or study allowances to be included as taxable income.

This often leads to a few important questions:

1. Can course fees be claimed as a tax deduction?

2. Does using FEE HELP affect deductibility?

3. Does an employer study allowance change what can be claimed?

These are questions we’re asked regularly. To answer them properly, it helps to break the tax rules down into clear, practical steps.

The Type of Loan Matters

In Australia, the tax treatment of education expenses depends heavily on the type of loan or funding involved.

HECS-HELP - No deduction

If your university course is a Commonwealth Supported Place (CSP) and you’re under a HECS-HELP loan, the ATO does not allow a deduction for your tuition fees, even if:

• You pay the fees yourself, and

• The course is directly related to your job.

That’s because the Tax Act specifically denies a deduction for HECS-HELP amounts.

This can be surprising for many people, especially those doing postgraduate study, but it’s based on law, not interpretation.

FEE-HELP - Potential deduction

If you’re enrolled in a full-fee paying course, and you’re using FEE-HELP to defer the fee, the rules change.

You may be able to claim a deduction for the actual tuition fees, but only if the study meets the ATO’s criteria for work-related self-education expenses.

Important point: You don’t claim the FEE-HELP repayments later on. You claim the tuition fees at the time they were incurred.

The Nexus Test: Is the Study Linked to Your Current Work?

Even if you qualify because of your loan type, the most critical test is whether your study has a direct link to your current employment.

The ATO calls this the nexus test. In simple terms:

To be deductible, the education must maintain or improve skills you use in your current role, or lead to an increase in your income from that role.

Let’s unpack what that means in practice.

When Self-Education Costs Can Be Deductible

The ATO has said that self-education expenses can be deductible where the study helps you perform your current job better or maintain the skills you already use. For example:

• A store manager is doing an MBA to improve leadership and operational skills.

• A software developer studying advanced programming modules relevant to their current projects.

When Self Education Expenses Cannot Be Deductible

The deduction is not allowed if the study is primarily to change careers or pursue a different field altogether.

For example:

• A sales representative doing an MBA solely to pivot into consulting.

• A teacher studying accounting with the intention of moving into financial services.

That’s because the ATO views the link between the study and the current job as too weak.

Practical Steps to Get Your Claim Right

If you’re thinking about studying or reviewing a course you’ve recently completed, here’s a practical checklist to make sure you stay on the right side of the ATO.

1. Check Your Loan Type

You must confirm whether you’re under HECS-HELP or FEE-HELP. Only FEE-HELP (or private payment) gives you potential deductibility.

This information is usually on your eCAF, course statement, or HELP summary.

2. Gather Supporting Evidence

If you plan to claim a deduction, keep:

• Course outlines or subject descriptions

• Your current job description

• Emails or letters from your employer showing the study supports your work

• Notes on how each subject relates to your role

This documentation helps substantiate the work-related purpose of your study.

3. Claim Only What’s Relevant

You can only claim expenses that are directly tied to your current income-earning activities. Typical allowable items include:

• Tuition fees (that meet the nexus test)

• Textbooks and course materials

• Some travel costs are directly associated with attendance

But remember, you can’t claim:

• HELP loan repayments

• Personal expenses unrelated to your job

4. Be Ready for Review

Large self-education claims can attract ATO scrutiny. If your situation involves a significant amount of study expenses, consider asking for a private ruling from the ATO before you lodge.

A private ruling gives you certainty about whether your specific claim is acceptable.

Key Takeaways

Understanding how self-education deductions work can make a real difference to your tax outcome, but only if the rules are applied correctly.

Here’s what every taxpayer should remember:

• Postgraduate study can be deductible, but only if it’s directly related to your current job.

• HECS-HELP amounts are never deductible, even if the course is highly relevant to your role.

• FEE-HELP and private payments are potentially deductible if the nexus test is satisfied.

• Employer allowances are taxable, but they don’t automatically prevent a deduction.

• HELP loan repayments themselves are not deductible. Only the original course fees may be.

What This Means for You

If you’re considering further study or want to make a self-education claim on your next tax return, here’s what to do.

Plan Ahead

Before you enrol in a course, think about how you will link it to your current employment in evidence and documentation.

Speak to an Advisor Early

Getting tailored tax advice before you enrol or lodge your return can be the difference between a successful claim and an ATO adjustment, which can include penalties and interest.

How Cordner Advisory Can Help

Navigating self-education deductions can be complex. The team at Cordner Advisory can help you:

• Determine whether your course fees are deductible

• Understand the difference between HECS-HELP and FEE-HELP

• Assess whether your study meets the nexus test

• Gather and organise appropriate evidence

• Lodge confident and compliant tax returns

• Apply for ATO private rulings when necessary

We work with professionals across industries to make sure their study investments translate into both career and tax benefits, without surprises at tax time.