No one’s exempt from having to pay taxes – not even your favourite sports stars who may play in the rugby league, rugby union, soccer or Australian Rules football.

Players in our great football codes may have hung up their boots for this season, and many may finally be catching up with their tax returns. A recent guide released by the Tax Office for such footballers reveals some interesting things about their tax affairs.

What unusual deductions are available?

Broadly speaking, individuals are allowed to claim a tax deduction for their expenses if they are able to demonstrate that such costs are directly related to their income earning activities (eg. salary income).

In a Tax Office guide developed for footballers, there are some unusual deductions that professional sportspeople may be entitled to claim in their tax return.

These include:

• protective headgear and mouthguards
• upgrade costs for accommodation and travel, where the club has paid the basic cost and the sportsperson has opted for an upgrade at their own expense
• luggage if it is used for work-related purposes, such as transporting gear used to play an interstate game
• club emblems or embellishments, standard matching shorts or tracksuits, hats or caps with club emblems, jerseys and jumpers with club emblems, and suits that are similarly emblazoned with club emblems
• sunglasses, sunscreens, hats and sunscreen lotions
• gym fees, and gym and training equipment that cost $300 or less, and
• fines, penalties and legal expenses for “on-field” conduct and tribunal decisions.
• The Tax Office however considers that footballers generally cannot claim deductions for the following:
• “conventional clothing” such as tracksuits, shorts, tank tops, running shoes, sweat socks, armbands, headbands and t-shirts
• cosmetics, shaving products, deodorant, general hair products, general skincare products and hairdressing
• a program that is specifically designed to manage weight
• normal food substitutes or foods for special dietary purposes
• vitamins, minerals or sports supplements used pre- or post-game, such as protein shakes, and
• fines, penalties and legal expenses for ‘off-field’ breaches.

What sort of income do footballers earn?

Just like the typical individual taxpayer, professional footballers need to show all assessable income they received during the income year, but their income may include items that are not found on an average individual’s tax return.

The Tax Office guide outlines certain income that may also need to be included in assessable income:

• bonuses – including match payments
• income for services they provide – for instance, private sponsorship or endorsement contracts
• income from running a business – for instance, commercial activities surrounding their public fame, celebrity or image outside of the terms of their playing contract
• income-protection insurance payments received due to injury
• payments from sponsors topping up their playing contracts
• retirement fund payments
• prizes and awards – for instance, “player of the match” awards
• public appearances, product promotions and endorsement payments
• representative player payments
• sign-on fees, and
• sponsorship payments – for instance, from footwear sponsorship.

In some situations, footballers may even need to show in their tax return non-cash benefits that they, their spouse or children received because of their sporting activities or their profile. A benefit could be:

• the use of something – such as a car, house or equipment
• ownership of something – such as items of clothing or a mobile phone, and the
• enjoyment of a privilege or facility – such as staying at a holiday house.

This is particularly so from sponsorship or business arrangements.  Where these benefits are provided by their employers, these may instead be included as a “reportable fringe benefit” in the payment summary of the sports person under certain conditions.