One of the features of the Income Tax Assessment Act 1997 is that as life is complex and can not possibly be contained within the words of the act, it allows you to run like for like substitutions for things in the act. In theory...
Stoves for instance can be gas, electric, charcoal, or wood fired, et cetera. A sofa, a couch, a bench, a lounge, are all roughly the same kinds of furniture. A grader, tractor, plough, digger, and what not, are various pieces of farm implements which are all depreciated at the same rate. When you think about it, of course it makes sense that the legislation is going to treat things which are roughly the same, as being roughly the same for taxation purposes.
So then, what happens when as the title of this blog post suggests, a cat becomes a vital piece of kit?
Again, if we apply the principle of like for like then we find very quickly that...
A cat is a dog.
The ATO on the other hand, does not agree. The ATO does not think that a cat is a dog. In fact as far as the ATO is concerned, they think that the work that cats do, is valueless.
Now the idea that you have a working dog, is hardly a new idea. Dogs have been used for thousands of years as herders, as security guards, as sled pullers, as sniffers, as substitute vision, and probably myriad more occupations. Cats on the other hand, are not likely to be used in very many capacities at all. Really all that they are good for in any real business sense, is for catching mice.
This means that a Working Cat is an edge case and not particularly noteworthy enough to have special legislation written for them. A Working Cat as far as the Income Tax Assessment Act 1997 is concerned, should be identical to a Working Dog but for the ATO, they have no idea.
Working, dogs, falcons, kites, pigeons, pigs, sheep, racehorses, goats, et al small animals, have a working life of 8 years, which is either 12.5% pa straight line, or 25% diminished value. Unless of course your working animal costs less than $300 (and let's be honest here, the Cat Distribution System generally distributes cats on the value of $0), in which case you can write off the entire amount.
As an aside, beasts of burden (horses, oxen, bullocks, donkeys and whatnot) all have a working life of 15 years. This also includes animals for stud.
This also means that the ongoing costs of a Working Cat, such as food, vet bills, uniform, et cetera, should by right just be the normal running expenses of a Working Cat as an asset. There is nothing particularly out of the ordinary here.
I make mention of this because a client of ours who runs a Bakery/Café had two accounts in their Xero setup for Mr Chengse. Mr Chengse was not included in Wages and Salaries and did not have any superannuation payments set aside.
As I found out, Mr Chengse is a valued employee and functionally the first in command at the business because whatever Mr Chengse wants, he gets. Mind you, he doesn't really want very much beyond the other staff opening and closing doors for him, and not to be disturbed in the morning when the Morning Sleep in the sunshine MUST happen.
The service that Mr Chengse provides is keeping the bakery and café free from vermin as well as providing advertising for the business while sleeping in the shop window.
The ATO on the other hand, disses Mr Chengse's vital service and at present doesn't allow a tax deduction for the provision of work that he provides, even though he does a better and more efficient job at a cheaper price than other pest control measures.
It might change though:
https://www.mdpi.com/2076-2615/15/6/800
Farmers preferred having cats on the farm than using poison baits as they viewed the cats as safer, cheaper and more efficient and perceived them to have less impact on wildlife. Additionally, farmers strongly supported the care of working cats being tax deductible, stating that it would reduce financial pressure on farmers and improve cat welfare. It is recommended that the role of working cats on dairy farms be further explored. However, our findings suggest dairy farmers value having working cats on their farm and that the Australian Tax Office permitting their care to be tax deductible may benefit the wellbeing of dairy farmers and cats whilst protecting wildlife from exposure to poisons, toxoplasmosis and excess farm cats.
- "Feline Farmhands: The Value of Working Cats to Australian Dairy Farmers—A Case for Tax Deductibility" - Caitlin Crawford ,Jacquie Rand, Olivia Forge, Vanessa Rohlf, Pauleen Bennett, Rebekah Scotney, 12th Mar 2025
I would expand Crawford, Rand, Forge, Rohlf, Bennett, and Scotney's enquiry to look into Working Cats in more venues that just farms. Surely all venues of employment where cats are providing valuable services such as pest control, companionship, or decorative arts such as Mr Chengse's sleeping in the window, are not only worthy of a tax deduction but perfectly in keeping with the other parts of the Income Tax Assessment Act 1997.
The general principle of deductibility when you have an expense that relates to income is very obviously on display here. Mice and rats getting into flour stores is not only inconvenient and messy but a public health hazard. Very clearly Mr Chengse's vital services of pest control, companionship, and the decorative arts are directly related to the production of income; which means that if for no other reason than there is a link between the expense and the income, then Mr Chengse's services should be deductible under Section 8 of the Income Tax Assessment Act 1997. The Australian Taxation Office though, just knocks all of them off the shelf because the fat cats don't understand what it's like out here for a cat.
 
 
 



