ato travel allowance rates 21 22

07 3862 2003

Paying Meal and Travel Allowances to Employees

The ATO has issued Tax Determination TD 2021/6 which sets out the reasonable allowances for the 2021/22 year for meals and domestic and overseas travel paid to employees, company directors or office holders.

Where the amount paid falls within the relevant reasonable allowance, the person is not required to substantiate the expenses. However, the ATO still requires some written records be kept to show the allowance was expended.

Note any expenditure on accommodation overseas must be fully substantiated.

Overtime meal allowances

The reasonable overtime meal allowance for the 2021-22 year is $32.50. Tax Determination TD 2021/6 provides the following example that shows the tax treatment of overtime meal allowances.

Samantha works for the local government. She is asked to work overtime one night to complete an urgent task. Samantha works her eight-hour day followed by four hours of overtime. Samantha receives an overtime meal allowance of $14.98 pursuant to her agreement, which is shown on her payment summary. During the overtime, Samantha takes a rest break to get a meal and returns to continue her overtime. Samantha spends $20 on her meal.

Because Samantha has spent less than the reasonable amount for overtime meal expenses, she can claim a deduction for the $20 she spends and she is not required to substantiate the expenditure (for example, get and keep the receipt for the meal).

If Samantha's tax return is checked by the ATO, she may be asked to explain her claim for the deduction. To do this, Samantha would show that she worked overtime, that she was paid an overtime meal allowance under an industrial instrument, that she correctly declared this allowance as income in her tax return, and that she costed her meal at $20 based on the cost of the meal she purchased from a nearby Thai restaurant.

If Samantha had spent more than the reasonable amount and wanted to claim the higher amount that she spent, she would need to get and keep the receipt for the meal.

If Samantha's overtime meal allowance was not shown on her payment summary and she fully spent the allowance, she can choose to leave it out of her tax return and not claim a deduction for the meal she purchases when working overtime.

Domestic travel allowances

Tax Determination TD 2021/6 contains the schedules for 2020-21 domestic travel allowances.

The Determination covers accommodation, meals and incidental expenses. The allowances are covered by three salary ranges and destination of travel. If money is expended for travelling within the allowances no substantiation is required.

The reasonable amount for accommodation applies only for short stays in commercial establishments like hotels, motels and serviced apartments. If a different type of accommodation is used (for example, a hostel or caravan park), the reasonable amount cannot be used even if you receive an allowance.

The reasonable amount for meals depends on the period and time of travel. That is, the reasonable amounts only apply to meals (that is, breakfast, lunch and dinner) that fall within the time of day from the commencement of your travel to the end of your travel that is covered by the allowance. For example, if you leave at 10.00am on Monday and return home at 3.00pm on Tuesday, you can apply the reasonable amounts for lunch and dinner on Monday and breakfast and lunch on Tuesday.

The reasonable amount for incidentals applies in full to each day of travel covered by the allowance, without the need to apportion for any part-day travel on the first and last day.

The ATO explains the tax treatment of the allowance in Example 2 which is extracted below.

Svetlana is an accountant earning $145,000 a year. As part of her duties, she is required to travel to and work in Sale for four days and three nights each month. Svetlana's employer pays for her accommodation directly and gives her a meal and incidental allowance of $80 per day for the four days of travel. This allowance is shown on her payment summary. Svetlana's usual pattern is to eat three times a day, spending $20 on breakfast, $25 on lunch and $40 on dinner (that is, a total of $85 per day). Svetlana calculates the daily reasonable amount for meals and incidentals as follows:

Table 2 of this Determination applies because Svetlana's salary is between $129,251 and $230,050

Sale is listed as a Tier 2 country in Table 5 of this Determination

Table 2 of this Determination provides reasonable amounts for Tier 2 country centres as $117.25 per day for meals and $29.45 per day for incidentals (that is, a total of $146.70 per day).

Because Svetlana has spent less than the reasonable amount on meals and incidentals, she can claim a deduction for the $85 per day that she spends on meals and she is not required to substantiate the expenditure (for example, get and keep all of the receipts for the meals). Svetlana cannot claim anything for accommodation because her employer paid for it.

If Svetlana's tax return is checked by the ATO, she may be asked to explain her claim for the deduction. To do this, Svetlana would show she travelled to and worked in Sale for four days each month, that she received an allowance for the meals and incidentals for each day she travelled, that she correctly declared this allowance as income in her tax return, and that she typically spent $85 a day on meals and incidental expenses (for example, by reference to diary entries, bank records and receipts that she kept for some of the trips).

If Svetlana had spent more than the reasonable amount on meals and incidentals and wanted to claim the higher amount that she spent, she would need to get and keep all of the receipts.

If Svetlana's meal and incidental allowance was not shown on her payment summary and she fully spent the allowance, she can choose to leave it out of her tax return and not claim any deductions for the meals and incidentals that she purchases while travelling and working in Sale.

This information is provided solely for general information purposes and is not intended as professional advice. Readers should not act on the information contained therein without proper advice from a suitably qualified professional.

We expressly disclaim all liability for any loss or damage to any person or organisation for the consequences of anything done or omitted to be done by any such person relying on the contents of this information .

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ATO Reasonable Travel Allowances

‘Reasonable’ allowances received in accordance with ATO’s reasonable travel allowances schedules are not required to be declared as income, and can be excluded from the expense substantiation requirements.

Per diem rate schedules of amounts considered reasonable are set out in Tax Determinations published by the Tax Office annually.

Tax Ruling TR 2004/6 describes the substantiation exception for expenses which are in line with the prescribed reasonable allowance amounts.

2021, 2022, 2023 and 2024 rates and for prior years are set out below.

The annual determinations set out updated ATO reasonable allowances for each financial year for:

• overtime meal expenses – for food and drink when working overtime
• domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work
• overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

On this page:

2017- 18-Addendum

More information

Substantiation rules

Substantiation in practice

Alternative: Business travel expense claims

Distinguishing Travelling, Living Away and Accounting for Fringe Benefits

See also: Super for long-distance drivers – ATO

Allowances for 2023-24

The full document in PDF format: 2023-24 Determination TD TD 2023/3 (pdf).

The 2023-24 reasonable amount for overtime meal expenses is $35.65.

Reasonable amounts given for meals for employee truck drivers (domestic travel) are as follows:

• breakfast $28.75
• lunch $32.80
• dinner $56.60

For full details including domestic and overseas allowances in accordance with salary levels, refer to the full determination document:

2023-24 Domestic Travel

Table 1：Salary $138,790 or less

Table 2: Salary $138,791 to $247,020

Table 3: Salary $247,021 or more

Table 4: High cost country centres accommodation expenses

Table 5: Tier 2 country centres

Table 5a: Employee truck driver’s meals (food and drink)

2023-24 Overseas Travel

Table 6: Salary $138,790 or less

Table 7: Salary $138,791 to $247,020

Table 8: Salary $247,021 or more

Table 9: Table of countries

Table 1：Reasonable amounts for domestic travel expenses – employee’s annual salary $138,790 or less

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $138,791 to $247,020

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $247,021 or more

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,790 or less

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,791 to $247,020

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $247,021 or more

Allowances for 2022-23

The full document in PDF format: 2022-23 Determination TD 2022/10 (pdf).

The 2022-23 reasonable amount for overtime meal expenses is $33.25.

Reasonable amounts given for meals for employee truck drivers are as follows:

• breakfast $26.80
• lunch $30.60
• dinner $52.75

2022-23 Domestic Travel

Table 1: Salary $133,450 and below

Table 2: Salary $133,451 to $237,520

Table 3: Salary $237,521 and above

2022-23 Overseas Travel

Table 6: Salary $133,450 and below

Table 7: Salary – $133,451 to $237,520

Table 8: Salary – $237,521 and above

Table 1: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,450 and below

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,451 to $237,520

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $237,521 and above

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,450 and below

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,451 to $237,520

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $237,521 and above

Allowances for 2021-22

The full document in PDF format: 2021-22 Determination TD 2021/6 (pdf).

The document displayed with links to each sections is set out below.

For the 2021-22 income year the reasonable amount for overtime meal expenses is $32.50

2021-22 Domestic Travel

Table 1: Salary $129,250 and below

Table 2: Salary $129,251 to $230,050

Table 3: Salary $230,051 and above

2021-22 Overseas Travel

Table 6: Salary $129,250 and below

Table 7: Salary – $129,251 to $230,050

Table 8: Salary – $230,051 and above

2021-22 Domestic Table 1: Employee’s annual salary – $129,250 and below

2021-22 Domestic Table 2: Employee’s annual salary – $129,251 to $230,050

2021-22 Domestic Table 3: Employee’s annual salary – $230,051 and above

2021-22 Domestic Table 4: High cost country centres – accommodation expenses

2021-22 Domestic Table 5: Tier 2 country centres

2021-22 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2021-22 Overseas Table 6: Employee’s annual salary – $129,250 and below

2021-22 Overseas Table 7: Employee’s annual salary – $129,251 to $230,050

2021-22 Overseas Table 8: Employee’s annual salary – $230,051 and above

2021-22 Overseas Table 9: Table of countries

Allowances for 2020-21

Download full document in PDF format: 2020-21 Determination TD 2020/5 (pdf).

The document displayed with links to each section is set out below.

For the 2020-21 income year the reasonable amount for overtime meal expenses is $31.95 .

2020-21 Domestic Travel

Table 1: Salary $126,970 and below

Table 2: Salary $126,971 to $225,980

Table 3: Salary $225,981 and above

2020-21 Overseas Travel

Table 6: Salary $126,970 and below

Table 7: Salary – $126,971 to $225,980

Table 8: Salary – $225,981 and above

2020-21 Domestic Travel 2020-21 Domestic Table 1: Employee’s annual salary – $126,970 and below

2020-21 Domestic Table 2: Employee’s annual salary – $126,971 to $225,980

2020-21 Domestic Table 3: Employee’s annual salary – $225,981 and above

2020-21 Domestic Table 4: High cost country centres – accommodation expenses

2020-21 Domestic Table 5: Tier 2 country centres

2020-21 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2020-21 Overseas Travel 2020-21 Overseas Table 6: Employee’s annual salary – $126,970 and below

2020-21 Overseas Table 7: Employee’s annual salary – $126,971 to $225,980

2020-21 Overseas Table 8: Employee’s annual salary – $225,981 and above

2020-21 Overseas Table 9: Table of countries

Allowances for 2019-20

The determination in sections:

Domestic Travel

Table 1: Employee’s annual salary – $124,480 and below

Table 2: Employee’s annual salary – $124,481 to $221,550

Table 3: Employee’s annual salary – $221,551 and above

Table 4: High cost country centres – accommodation expenses

Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel

Table 6: Employee’s annual salary – $124,480 and below

Table 7: Employee’s annual salary – $124,481 to $221,550

Table 8: Employee’s annual salary – $221,551 and above

For the 2019-20 income year the reasonable amount for overtime meal expenses is $31.25.

The reasonable travel and overtime meal allowance expense amounts commencing 1 July 2019 for the 2019-20 income year are contained in Tax Determination TD 2019/11 (issued 3 July 2019).

Download the PDF or view online here .

Domestic Travel Table 1: Employee’s annual salary – $124,480 and below

Domestic Travel Table 2: Employee’s annual salary – $124,481 to $221,550

Domestic Travel Table 3: Employee’s annual salary – $221,551 and above

Domestic Travel Table 4: High cost country centres – accommodation expenses

Domestic Travel Table 5: Tier 2 country centres

Domestic Travel Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel Table 6: Employee’s annual salary – $124,480 and below

Overseas Travel Table 7: Employee’s annual salary – $124,481 to $221,550

Overseas Travel Table 8: Employee’s annual salary – $221,551 and above

Overseas Travel Table 9: Table of countries

Substantiation and Compliance

Taxation Ruling TR 2004/6 explains the the way in which the expenses can be claimed within the substantiation rules, including the requirement to obtain written evidence and exemptions to that requirement.

Allowances which are ‘reasonable’ , i.e. comply with the Reasonable Allowance determination amounts and with TR 2004/6 are not required to be declared as income and are excluded from the expense substantiation requirements.

These substantiation rules only apply to employees. Non-employees must fully substantiate their travel expense claims. Expenses for non-working accompanying spouses are excluded.

Key points :

To be claimable as a tax deduction, and to be excluded from the expense substantiation requirements, travel and overtime meal allowances must:

• be for work-related purposes; and
• be supported by payments connected to the relevant expense
• for travel allowance expenses, the employee must sleep away from home
• if the amount claimed is more than the ‘reasonable’ amount set out in the Tax Determination, then the whole claim must be substantiated
• employees can be required to verify the facts relied upon to claim a tax deduction and/or the exclusion from the substantiation requirements
• an allowance conforming to the guidelines doesn’t need to be declared as income or claimed in the employee’s tax return, unless it has been itemised on the statement of earnings. Amounts of genuine reasonable allowances provided to employees(excludng overseas accommodation) are not required to be subjected to tax withholdings or itemised on an employee’s statement of earnings.
• claims which don’t match the amount of the allowance need to be declared.

The Tax Office has issued guidance on their position.

[11 August 2021] Taxation Ruling TR 2021/4 reviews the tax treatment of accommodation and food and drink expenses, and provides 14 examples which distinguish non-deductible living expenses from deductible travelling on work expenses. FBT implications for the ‘otherwise deductible’ rule and travel and LAFHA allowances are also considered.

[11 August 2021] Practical Compliance Guideline PCG 2021/3 (which finalises draft PCG 2021/D1 ) provides the ATO’s compliance approach to determining if allowances or benefits provided to an employee are travelling on work, or living at a location.

For FBT purposes an employee is deemed to be travelling on work if they are away for no more than 21 consecutive days, and fewer than 90 days in the same work location in a FBT year.

See also: Travel between home and work and LAFHA Living Away From Home

The issue of annual determination TD 2017/19 for the 2017-18 year marked a tightening of the Tax Office’s interpretation of the necessary conditions for the relief of allowances from the substantiation rules, which would otherwise require full documentary evidence (e.g. receipts) and travel records. (900-50(1))

For a full discussion of the issues, this article from Bantacs is recommended: Reasonable Allowance Concessions Effectively Abolished By The ATO .

Prior to 2017-18

In summary: Prior to 2017-18 the Tax Office rulings stated the general position that provided a travel allowance was ‘reasonable’ (i.e. followed the ATO-determined amounts) then substantiation with written evidence was not required. “In appropriate cases”, however employees may have been required to show how their claim was calculated and that the expense was actually incurred.

What changed

The relevant wording was changed in the 2017-18 determination to now require that more specific additional evidence be available if requested. This additional evidence is not prescribed in the tax rules, but represents a higher administrative standard being applied by the Tax Office.

The required evidence includes being able to show:

• you spent the money on work duties (e.g. away from home overnight for work)
• how the claim was worked out (e.g. diary record)
• you spent the money yourself (e.g. credit card statement, banking records)
• you were not reimbursed (e.g. letter from employer)

Other requirements highlighted by the Bantacs article include:

• a representative sample of receipts may be required to show that a reasonable allowance (or part of it) has actually been spent (TD 2017/19 para 20)
• hostels or caravan parks are not considered eligible for the accommodation component of a reasonable allowance because they are not the right kind of “commercial establishment”, examples of which are hotels, motels and serviced apartments (para 14)
• reasonable amounts for meals can only be for meals within the specific hours of travel (not days), and can only be for breakfast, lunch or dinner (para 15), and therefore could exclude, for example, meals taken during a period of night work.

Tip : The reasonable amount for incidentals still applies in full to each day of travel covered by the allowance, without the need to apportion for any part day travel on the first and last day. (para 16).

Alternative: business travel expense claims

With the burden of proof on ‘reasonable allowance’ claims potentially quite high, an alternative is to opt for a travel expense claim made out under the general substantiation rules for employees, or under the general rules for deductibility for businesses.

The kind of business travel expenses referred to here could include:

Airfares Accommodation Meals Car hire Incidentals (e.g. taxi fares)

The Tax Office has an article describing how to meet the requirements for claiming travel expenses as a tax deduction. See: Claiming a tax deduction for business travel expenses

Travel diary

A travel diary is required by sole traders and partners for overnight expenses and recommended for everyone else (including companies and trusts).

It is important to exclude any private portion of travelling expense which is non-deductible, or if paid on behalf of an employee gives rise to an FBT liability.

For example the expenses of a non-business associate (e.g. spouse), the cost of private activities such as sight-seeing, and accommodation and associated expenses for the non-business portion of a trip.

Airfares to and from a business travel destination would not need to be apportioned if the private element of the trip such as sightseeing was only incidental to the main purpose and time spent.

This is an example of a travel diary for Rebecca who owns a business as a sole trader landscape gardener. (courtesy of ATO Tax Time Fact Sheet )

Allowances for 2018-19

For the 2018-19 income year the reasonable amount for overtime meal allowance expenses is $30.60 .

The meal-by-meal amounts for employee long distance truck drivers are $24.70, $28.15 and $48.60 per day for breakfast, lunch and dinner respectively.

This determination includes ATO reasonable allowances for

(a) overtime meal expenses – for food and drink when working overtime (b) domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work (particular reasonable amounts are given for employee truck drivers, office holders covered by the Remuneration Tribunal and Federal Members of Parliament) (c) overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

Allowances for 2017-18

An addendum was issued modifying paragraphs 23 to 30 of determination TD 2017/19 setting out the new reasonable amounts, and consolidated into TD 2017/19 as linked above. For reference purposes, the first-released version of TD 2017/19 issued 3 July 2017 is linked here .

2017-18 Addendum: ATO reinstates the meal-by-meal approach for truck drivers’ travel expense claims

On 27 October 2017 the ATO announced the reinstatement of the meal-by-meal approach for truck drivers who claim domestic travel expenses for meals. The following new reasonable amounts have now been included in an updated version of the current ruling (see on page 7)：

For the 2017-18 income year the reasonable amount for overtime meal allowance expenses is $30.05 .

This determination contains ATO reasonable allowances for:

• overtime meals
• domestic travel
• employee truck drivers
• overseas travel
• $24.25 for breakfast
• $27.65 for lunch
• $47.70 for dinner

The amount for each meal is separate and can’t be combined into a single daily amount or moved from one meal to another.

See: ATO media release

Allowances for 2016-17

For the 2016-17 income year the reasonable amount for overtime meal allowance expenses is $29.40 .

Allowances for 2015-16

Download the PDF or view online here . For the 2015-16 income year the reasonable amount for overtime meal allowance expenses is $ 28.80 .

Allowances for 2014-15

Allowances for 2013-14

The reasonable travel and overtime meal allowance expense amounts for the 2013-14 income year are contained in Tax Determination TD 2013/16 . For the 2013-14 income year the reasonable amount for overtime meal allowance expenses is $ 27.70 .

Allowances for 2012-13

The reasonable travel and overtime meal allowance expense amounts for the 2012-13 income year are contained in Tax Determination TD 2012/17 . For the 2012-13 income year the reasonable amount for overtime meal allowance expenses is $27.10

Allowances for 2011-12

The reasonable travel and overtime meal allowance expense amounts for the 2011-12 income year are contained in Tax Determination TD 2011/017 . For the 2011-12 income year the reasonable amount for overtime meal allowance expenses is $26.45

This page was last modified 2023-06-28

Employee travel allowance rates - Current

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Rates effective on and from 1 July 2023

Capital City Zones - Excluding Canberra

High season is 1 April to 30 November. *Low season is 1 December to 31 March.  

Capital City Zone - Canberra as at 27 August 2023

1 Canberra TA rates are set in line with Remuneration Tribunal (Members of Parliament) Determination 2022 - Travelling Allowance, in accordance with Clause 55.6 of the Commonwealth Members of Parliament Staff Enterprise Agreement 2020-2023 . Search capital city boundaries

Regional Centres

As at 1 july 2023.

Acknowledgement of Country

The Independent Parliamentary Expenses Authority acknowledges the traditional owners and custodians of country throughout Australia and acknowledges their continuing connection to Land, Waters and Community.

We pay our respects to the people, the cultures and the Elders past, present and emerging.

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Travel allowance or LAFHA? And how is each taxed?

Thanks to Tax & Super Australia for the article.

Being asked by the boss to travel for work purposes can be demanding on staff — financially, physically and also emotionally. Out of this has developed more than one way to compensate employees; these being a travel allowance and the living away from home allowance (LAFHA).

When both were developed, the difference between the two were often decided by an ATO-initiated rule-of-thumb in that travel of less than 21 days was deemed to be the former, while more than 21 days was considered to have a more LAFHA flavour. The 21-day “threshold” however no longer applies.

For travel allowances, typically employees are:

• paid standard travel allowance for accommodation and food
• working at the one location
• visiting home on weekends
• staying in accommodation provided by the supplier (which may be available for use by other customers when the employee is not there).

The ATO publishes guidelines each year on what it considers to be reasonable amounts for a travelling employee.

However it has also been found that some employees may be on a travel allowance for six weeks or more.

It is often asked whether these transactions should be looked at under the FBT rules (for LAFHA ) or the income tax rules (for travel allowances ). The tax treatment (and therefore the financial outcomes) of both can be different.

Deciding factors

The FBT framework would generally provide for a more concessional tax outcome where certain prescribed requirements for a LAFHA is met in comparison with the income tax effect of a travel allowance.

The reality is that you could have someone who is away from home but is still considered to be only travelling. Alternatively you could have someone that is away from home for two weeks only, but in those two weeks was actually living away from home.

When an employee is required to travel on business and overnight their food, drink and accommodation expenses become deductible expenses and are FBT free for the employer. The difference between LAFH rules and travelling on business is quite simply the employee on LAFH has to temporarily change their usual place of residence and therefore their food, drink and accommodation expenses become private and non-deductible. And that is why the employer needs the FBT concession for such employees. It is a question of fact as to whether or not the employee has temporarily changed their usual place of residence as opposed to travelling around on business.

So it is a test of substance whether someone is just travelling or is actually living away from home. It would have to be substantiated to be proven in fact as a LAFHA. Similarly, if away from home and treated as a travel allowance, the ATO will generally not challenge such treatment if substantiated as travel. Taxation ruling TR 2017/D6 deals with these factors.

Travel allowance or living away from home?

The following general principles may be of guidance:

• When a person is living away from home, there will be a change in job location and a temporary residence will be taken up near the new work location. Often, but not always, the employee’s spouse and family will accompany the employee to the new location.
• When a person is merely travelling, there will be no change in job location and there will be no establishment of a temporary residence – rather, the person will merely be accommodated while travelling. Usually the employee’s spouse and family will not accompany the employee.
• However the issue of whether the family accompanies the employee is not determinative. The critical factor seems to be where the job is located. If it is temporarily located away from the employee’s usual place of residence, the employee will usually be living away from his or her usual place of residence. Where the job location does not change, but the employee must travel to undertake duties, he or she will be regarded as travelling.
• While the length of period away from home is not determinative, the ATO will generally accept that shorter periods away will generally be deemed to be travelling. In addition, the Tax Commissioner has stated that employees attending short-term staff training courses will generally be treated as travelling in the course of their employment.
• There is no minimum or maximum period of absence to qualify as living away from home, although the application of the FBT rules may be less concessional if someone lives away from their usual place of residence for more than 12 months. The period that a person is living away from home will end when the person returns to his or her usual place of residence, or changes his or her usual place of residence to the new location.

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Allowances and reimbursements

Payers need to know the correct withholding for allowances and the differences between allowances and reimbursements.

Last updated 4 April 2017

As a payer you will have to know the correct withholding for allowances and the differences between (as well as different types of) allowances and reimbursements.

Allowances are separately identified payments made to an employee for:

• working conditions - for example, danger, height or dirt
• qualifications or special duties - for example, first aid certificate or safety officer
• expenses that can't be claimed as a tax deduction by the employee – for example, normal travel between home and work
• work related expenses that may be claimed as a tax deduction by the employee - for example, travel between work sites.

Allowances that have been folded in to normal salary or wages are not treated separately for withholding.

Reimbursements

Reimbursements are payments made to a worker for actual expenses already incurred, and the employer may be subject to fringe benefits tax (FBT). If the reimbursement is covered by FBT, the amount is not assessable income to the employee, and the employee cannot claim a deduction for the expense.

Super obligations when paying allowances

You must pay super on an employee's ordinary time earnings.

Super obligations apply to:

• 'on call' allowances paid for ordinary hours of work, such as an 'on call' loading.

Super obligations do not apply to:

• expense allowances and reimbursements. These are not 'salary or wages' and therefore aren't ordinary time earnings.
• 'on call' allowances paid when employees are required to make themselves available during hours they aren't otherwise working. These are excluded from ordinary times earnings.

Find out about:

Withholding for allowances

Travel allowances.

• Taxation Ruling TR 92/15 Income tax and fringe benefits tax: the difference between an allowance and a reimbursement
• Superannuation Guarantee Ruling SGR 2009/2A1 Superannuation guarantee: meaning of the terms 'ordinary time earnings' and 'salary or wages
• Checklist: Salary or wages and ordinary time earnings

Work out the withholding treatment and payment summary or STP Phase 1 reporting requirements for allowances.

Explains the PAYG withholding implications on travel allowances.

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myTax 2024 Work-related travel expenses

How to complete the work-related travel expenses section of your return using myTax.

Published 3 June 2024

Things to know

Complete this section if you incurred travel expenses in performing your work as an employee.

To claim a deduction for a work-related expense:

• you must have spent the money yourself and weren't reimbursed
• it must be directly related to earning your income
• you must have a record to prove it (usually a receipt).

You can only claim a deduction for the work-related portion of an expense. You can't claim a deduction for any part of an expense that is not directly related to earning your income or that is private.

If your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims.

Work-related travel expenses include:

• public transport, air travel and taxi fares
• short-term car hire
• accommodation, meal and incidental expenses you incur while away overnight for work
• actual expenses such as petrol, repair and maintenance costs, that you incur to travel in a car that is owned or leased by someone else
• cars (don't claim these at 'Work-related car expenses')
• motorcycles and vehicles with a carrying capacity of one tonne or more, or 9 or more passengers
• expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or 9 or more passengers, such as utility trucks and panel vans.

You can claim

You can claim the cost of trips you undertake in the course of performing your work duties. This may also include trips between your home and your workplace if:

• you used the vehicle because you had to carry bulky tools or equipment that are essential to perform your employment duties and could not leave at your workplace because there was no secure storage (for example, an extension ladder or cello)
• your home was a base of employment (that is, undertaking work in 2 locations is necessary due to the nature of your duties and you were required to start your work duties at home and travel to your workplace to complete those particular work duties)
• you had shifting places of employment (that is, you regularly worked at more than one site each day before returning home).

Work-related travel expenses also include the cost of trips:

• between 2 separate places of employment when you have a second job, providing one of those places is not your home
• from your normal workplace or your home to an alternative workplace that is not a regular workplace (for example, a client’s premises) while you are on duty
• from an alternative workplace that is not a regular workplace back to your normal workplace or directly home.

If the travel was partly private, you can claim only the work-related part.

Claim at this section any work-related travel expenses incurred in earning assessable foreign employment income shown on an income statement or PAYG payment summary – foreign employment .

If you received an award transport payment from your employer, you can claim a deduction for work-related transport expenses these payments cover.

If your employer provided a car for you or your relatives’ exclusive use (including under a salary sacrifice arrangement) and you or your relatives were entitled to use it for non-work purposes:

• other maintenance
• bridge and road tolls.

Parking at or travelling to a regular workplace is not ordinarily considered to be a work-related use of the car.

If you no longer own or use an item costing over $300 (such as a ute or van with a carrying capacity of a tonne or more) and you previously claimed a deduction for its decline in value, you may need to make a balancing adjustment.

Accommodation, meal and incidental expenses

To claim accommodation, meal and incidental expenses, you must have incurred the expenses when you travelled and stayed away from your home overnight in the course of performing your work duties. You must also have paid the expenses yourself and not been reimbursed.

You can’t claim accommodation, meal and incidental expenses if the expenses were incurred because:

• you lived a long way from where you worked because of your personal circumstances
• there was a change to your regular place of work and you lived away from your usual residence to be closer to your new regular place of work (living away from home)
• you chose to sleep at or near your workplace rather than returning to your home between shifts.

Overnight travel expenses includes information about records and evidence you need if you want to claim accommodation, meal and incidental expenses you incurred when you travelled away overnight for work.

Your employer may have paid you a travel allowance to cover travel allowance expenses you incurred when you travelled away from home to perform your employment duties.

Receiving a travel allowance from your employer doesn't automatically mean you can claim a deduction. You can only claim a deduction for the deductible travel allowance expenses that you actually incurred.

If you receive a travel allowance, you may be eligible for a record keeping exception if your deductible travel allowance expenses are within the reasonable amounts .

The reasonable amounts are not amounts that you can automatically claim as a deduction.

For information on:

• Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses?
• Taxation Ruling TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances  
• shifting places of employment, see Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work – deductions, allowances and reimbursements for transport expenses .
• Taxation Determination TD 2023/3 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2023–24 income year?
• Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses.

Related page

Claiming deductions How to claim deductions in your return using myTax.

You can't claim

You can't claim normal trips between your home and your workplace, even if:

• you did minor work-related tasks at home or between home and your workplace
• you travelled between your home and workplace more than once a day
• you were on call
• there was no public transport near work
• you worked outside normal business hours
• your home was a place where you ran your own business and you travelled directly to a place of employment where you worked for somebody else.

Do not show at this section

Don't show the following at this section:

• Expenses (apart from bridge and road tolls, and parking fees) relating to a car you owned, leased or hired under a hire purchase agreement where the expense is not related to motorcycles and vehicles with a carrying capacity of one tonne or more, or 9 or more passengers, such as utility trucks and panel vans, go to Work-related car expenses
• Expenses you incurred in earning assessable foreign employment income not shown on an income statement or PAYG payment summary – foreign employment , go to Foreign employment
• losses at Other work-related expenses
• profits at Other income .

Any balancing adjustment amounts calculated in the Depreciation and capital allowance tool will show automatically.

Completing this section

You must have written evidence for the whole of your claim.

We pre-fill your tax return with work-related travel expense information you uploaded from myDeductions. Check them and add any work-related travel expenses that have not pre-filled.

To claim work-related travel expenses, you must first show income from salary and wages or foreign employment income in the Income statements and payment summaries section.

To personalise your return to show work-related travel expenses, at Personalise return select:

• You had deductions you want to claim
• Work-related expenses.

To claim your work-related travel expenses, at Prepare return select 'Add/Edit' at the Deductions banner.

At the Work-related travel expenses banner:

• enter Your description . To assist in record keeping, add a short description of your expense.
• enter the Amount . The Depreciation and capital allowances tool can help you to work out any decline in value deduction. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool in the Deductions section. Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link.
• Select Save .
• Select Save and continue when you have completed the Deductions section.

You need to keep records for 5 years (in most cases) from the date you lodge your tax return.

Our myDeductions tool is free to use and is available through the ATO app. The tool makes it easier and more convenient to keep records of your expenses and income in one place, including photos of your receipts and invoices.