Woof Woof - it's nearly tax time. Can you claim the office dog as a deduction?

Office pets have become the 'in thing' for a lot of workplaces. When staff returned from COVID lock downs many people returned to the office with their dog.

According to Coco Hou CPA, CEO of Platinum Accounting Australia, many pets have become office therapy pets and an integral part of a business' operations.

Coco Hou CPA is a highly respected accountant, tax specialist and business advisor who works with businesses across the country to help them grow and manage their operations, accounting and tax affairs in an effective manner.

"With tax time coming up, a lot of people are starting to ask me about their office dog. They want to know if their dog is tax deductable," Hou said.

"The answer is not so simple. There are a few things to consider."

Hou outlines the considerations when it comes to dogs, work and the ATO.

Can I pay a dog

"To receive an income in Australia, you must be registered with the ATO. Dogs can not be registered tax payers in Australia. So no, you can not pay a dog," Hou said.

"While you may own a dog and pay for its upkeep and take it to work as part of your role, the dog can not receive a wage. The expenses associated with the dog may be considered from a tax point of view."

Office dogs

"The ATO is very clear that in Australia, expenses for an office dog are generally not tax deductible unless you can demonstrate that the dog is essential for carrying out the duties of the business," Hou said.

Security dogs

"Some businesses may have dogs as a form of security and protection. For instance, a security dog at a warehouse might have associated costs that are deductible, such as training, food, veterinary care and other maintenance expenses directly related to its work," Hou said.

"In this situation, as long as the expenses being claimed are directly associated with the cost of the dog and its work, then the ATO may consider these costs as business expenses."

Service dog

"If a dog is brought into a workplace and it is more of a pet or for the employees' comfort and doesn't perform specific security or operational duties essential to the business, its expenses would not typically be tax deductible. The ATO tends to be quite strict on what constitutes a legitimate business expense," Hou said.

"However if the dog is part of the business' operations and plays a critical role in the business day to day, then the expenses associated could be considered by the ATO.

"Expenses may include, transport, food, insurance, veterinary bills, uniform and other items."

Hou emphasised that business owners or managers should discuss the situation with their accountant and tax advisor to work through how to treat pet related expenses.

"The end of financial year is fast approaching so I recommend having those conversations now," Hou said.

About Platinum Accounting Australia 

Platinum Accounting Australia is a national network of accounting and bookkeeping businesses that specialise in providing strategic and practical taxation, business and accounting advisory services. Platinum accountants understand their customers' businesses and goals and help clients plan for their futures. Since 2008, Platinum has built a solid reputation for providing its clients with high quality timely services.