Work-related travel expenses are generally tax deductible. Because the Australian Tax Office (ATO) receives thousands of incorrect claims each year for work travel expenses, they keep a close eye on what is claimed to determine if it is, in fact, a valid work-related travel expense and tax deductible.
There are dozens of work-related travel expenses that are legally tax deductible. It is worth appointing a registered tax agent to help you to make sure you claim everything available to you!
What work travel expenses are deductible?
To claim a deduction for a work-related travel expense, you must meet the following “3 golden rules”:
- You must have spent the money yourself and weren’t reimbursed.
- The expenses must directly relate to earning your income.
- You must have a record to prove it (usually a receipt).
Work-related travel expenses are only deductible for work trips made during working hours and overnight travel for work.
This does not include work-related travel expenses related to your daily commute from home to work and back; these are unfortunately not tax deductible.
You may not claim work-related travel expenses if your employer has paid them on your behalf.
Legitimate overnight work-related travel expenses may include items like flights, vehicle hire, fuel, accommodation, meals (e.g. food and drinks), and incidental expenses (e.g. car parking fees, bus tickets, internet or phone). It is important to keep records to prove that these expenses occurred.
If you are away from home for more than six nights, you may also need to keep travel records, such as a travel diary. This is in addition to your receipts.
Here is a more detailed list of examples of work-related travel expenses:
- Hotel, motel, or other accommodations
- Meals (food and drinks)
- Airfare
- Car Hire
- Train, taxi, boat, bus, tram, ferry, or other vehicle fees
- Ride-sharing and ride-sourcing
- Bridge and road tolls
- Parking fees
- Quarantine and testing
- Phone and internet
There are dozens of work-related travel expenses that are legally tax deductible. It is worth appointing a registered tax agent to help you to make sure you claim everything available to you!
How does a travel allowance work?
The travel allowance is a payment made to an employee to cover work-related travel expenses while they travel overnight for work purposes. If a travel allowance forms part of an employee’s salary or wages, tax has to be withheld.
If you receive a travel allowance for work-related travel expenses, then certain rules and exceptions to record keeping may apply. The ATO travel allowance provides for deductions that are applicable if they are within the reasonable amounts that the Commissioner publishes.
The reasonable travel allowance amounts are published each year on the ATO’s website for both domestic and overseas travel.
The same work-related travel expenses noted above would apply if you received a travel allowance from your employer. The expenses that you may be able to claim would only be applicable if you had to pay for travel expenses yourself.
If you went on overseas business trips during the financial year, an overseas business trip tax deduction may apply. You would be eligible to claim the work-related travel expenses for items such as airfares, accommodations, food, and drinks provided where you have written evidence of these expenses.
If you plan on taking a few extra days to enjoy the sites and explore the country, then you would only be eligible to claim for the portion that was strictly for work purposes.
Therefore, a travel diary is important. It clarifies what the expenses related to work are and avoids any doubts that the ATO might have. Keep in mind that if your overseas trip lasts more than six nights, you should keep a travel diary or itinerary that documents the dates, places, times, and durations of your activities while traveling.
How much work travel can you claim without receipts?
Claiming work-related travel expenses without a receipt or having the supporting proof documents can be problematic, but, in some cases, you can claim up to $300 in business expenses without a receipt. Providing a receipt is more straightforward; there are less questions raised about whether your claim is valid or not.
To find out more about what expenses you can claim on your tax return, read our tax time update.
Claiming deductions may sound tricky, but submitting through a registered tax agent like Personal Tax Specialists will save you money. Our 100% online 5-step process makes lodging your tax simple and our registered tax agents will help you claim all the deductions you’re entitled to.
