Deductibility of Vaccination Expenses - employers

Is an employer entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for medical expenses incurred to vaccinate employees against Q fever, which is a well recognised occupational hazard in the cattle industry?

Yes. The medical expenses are necessarily incurred in carrying on a business for the purpose of gaining the employer's assessable income and are, therefore, deductible in accordance with paragraph 8-1(1)(b) of the ITAA 1997.

The taxpayer operates a business that requires its employees to be directly exposed to cattle that may be infected with Q fever on a regular basis. Q fever is a well recognised occupational hazard within the cattle industry.

The taxpayer incurred medical expenses to vaccinate employees against Q fever. Only those employees who are likely to come into direct contact with potentially infected animals and who are at most risk of contracting the disease were vaccinated.

Medical expenses incurred by an employer to vaccinate employees who are at risk of contracting Q fever are regarded as arising directly from the employer's income earning activities. Consequently, the medical expenses are of a business nature and an allowable deduction in accordance with paragraph 8-1(1)(b) of the ITAA 1997.