Rapid Antigen Tests (RATs) to be tax deductible for Australian workers

Australians who buy a rapid antigen test to ensure they’re Covid-free before attending work will be able to claim the expense back on tax.

Australians who buy a rapid antigen test to ensure they’re Covid-free before attending work will be able to claim the expense back on tax, while businesses will not have to pay fringe benefits on tests purchased for employees.

As the Omicron wave continues to drop the federal government is turning its attention to boosting the economy after months of lockdowns, restrictions and low confidence left once-busy business districts like the Sydney CBD empty and businesses crying out for staff.

Australians will be able to claim part of the cost of their Rapid Antigen Tests (RAT) back on tax. Picture: Supplied

In contrast to waves of people leaving low-paid jobs overseas, known as the “great resignation,” new jobs data shows Australia’s low unemployment has instead fuelled a “great reshuffle,” with more than 300,000 people leaving one job for another in the past three months in search of better pay and opportunities.

Treasurer Josh Frydenberg will on Monday also confirm RATs are tax deductible, meaning a person paying the average 32.5 per cent tax rate would get about $6.50 back in their pocket for a two-pack of tests costing $20.

If Australians take a rapid antigen test and return a positive result they are required to isolate for seven days. Picture: Odd Anderson / AFP

RATs would also be exempt from Fringe Benefit Tax (FBT) for businesses, with the tax breaks also to apply to the PCR tests, though these are not currently widely purchased by private customers.

Mr Frydenberg said Covid-19 tests were an “important tool” being used to protect workers to ensure businesses could keep their doors open and supply chains running.

“That is why we will bring Covid-19 tests in line with other work related expenses by making them tax deductible for individuals and FBT exempt for businesses,” he said.

“As the pandemic has evolved so has our response, and by making common sense decisions like this, we are making it easier for households and businesses to get on with their lives.”

In a speech to the Australian Industry Group on Monday, Mr Frydenberg will also announce the Productivity Commission will be tasked with developing a road map to boost the economy in the Covid recovery.

Treasurer Josh Frydenberg will use a speech to highlight how people changing jobs can boost Australia’s productivity. Picture: NCA NewsWire / David Crosling

He will reveal new treasury analysis has found a record number of Australians have switched jobs in search of better opportunities.

“Switching jobs allows workers to move up the job ladder for better pay,” Mr Frydenberg will say.

“Treasury’s latest analysis using Single Touch Payroll data has shown that workers that moved jobs typically experienced pay increases of between 8 and 10 per cent.

“They also move to more productive firms, helping those firms grow.”

Mr Frydenberg said this would help lift productivity across the economy, with higher skilled workers being moved into higher skilled jobs.

“When workers are in high demand, businesses are more likely to invest in capital, making workers more productive and businesses more efficient,” he will say.