Show download pdf controls
  • Exceptions for keeping travel expense records

    Generally, you are required to get and keep written evidence, such as receipts, when you claim a deduction for work-related travel expenses. This is known as substantiation of your travel expenses. You may need to keep a travel diary if you travel for six or more nights in a row as substantiation for your travel expenses. However, there may be an exception if:

    • the deduction you claim is less than the reasonable amount that we set each year and all of the following apply
      • you are required to travel for work
      • you receive a travel allowance from your employer for the travel
      • you spent money on accommodation, food or drink or other deductible expenses incidental to the travel and you weren't reimbursed.
       

    Reasonable amounts for accommodation, food or drink and incidentals are set each year for substantiation purposes. These amounts are only used to work out if an exception applies. They aren't the amount you can claim as a deduction. You should claim only the amount you actually spend.

    The reasonable amounts are set in an annual taxation determination, refer to TD 2018/11 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2018-19income year?

    On this page:

    Records to keep if the exception applies

    If you don't receive an allowance from your employer, you need to keep receipts and a travel diary to claim a deduction as the substantiation exceptions for travel expenses don't apply to you.

    If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.

    Even if you don't claim more than the reasonable amounts (and an exception applies), we may still check your tax return and ask you to show:

    • how you spent the money in the course of performing your work duties – for example, in travelling away from home overnight on a work trip
    • how you worked out your claim – for example, kept a diary showing the times you were away and how many meals you ate and where
    • you spent the money yourself – for example, credit card statement or other banking records – and you were not reimbursed
    • you correctly declared your allowance as income in your tax return.

    See also:

    Example – meal allowance

    Zoran works in Melbourne. His employer requires him to travel to the office in Sydney for a week. Zoran is paid a $600 meal allowance to cover breakfast, lunch and dinner for the five days he is required to be in Sydney. Zoran's employer pays for accommodation directly.

    Zoran keeps a record of his meal expenses over the week and calculates he spent $500 over the five days on food and drink. This is less than the reasonable amount set by the ATO.

    Zoran isn't required to keep all of his receipts for his expenses on food and drink for this trip to Sydney as the travel substantiation exception applies. However, Zoran keeps records as evidence that he was travelling for work, and keeps his credit card statements or other records to show he spent the amount he claimed as a deduction, and show he declared the $600 allowance in his tax return.

    Zoran can't claim a deduction for accommodation because his employer pays for this expense directly.

    Zoran must keep all receipts for any incidental expenses he has when in Sydney. As he didn't receive an allowance for incidental expenses, he can't rely on a travel substantiation exception for incidental expenses.

    End of example

     Travel expense substantiation exceptions

    You may not be required to substantiate your expenses in the following situations:

    Domestic travel

    If you are undertaking travel within Australia, you don't need to keep receipts or a travel diary (for travel for six nights or more in a row) when claiming your travel expenses on food and drink, accommodation and incidental expenses, if you:

    • receive a travel allowance for the travel expense from your employer
    • only claim up to the reasonable amount.

    Example – allowance on payment summary

    Ellie received a travel allowance for food, drink and incidentals when she travelled within Australia for work. The allowance paid was shown on her payment summary.

    Ellie includes the travel allowance as income in her tax return and claims a deduction for the amount she spends on work-related travel expenses. The allowance paid to her was the same amount as the ATO's reasonable amount so Ellie doesn't have to keep receipts for all of the expenses that she claims in her tax return in relation to the work travel.

    If asked by us, Ellie will still have to show she went away overnight for work, that she received and declared her travel allowance, and how she spent the amount that she is claiming as a deduction, for example, from her bank records.

    End of example

    International travel

    If you are undertaking international travel, you don't need to keep receipts when claiming your travel expenses on food and drink, and incidental expenses, if you:

    • receive a travel allowance for the travel expense from your employer
    • only claim up to the reasonable amount.

    You must still get and keep receipts for all accommodation expenses overseas. The exception does not apply.

    You must still keep a travel diary if you are travelling away from home for six or more nights in a row overseas. The exception does not apply.

    Crew on international flights

    If you are a crew member on an international flight, you don't need to keep a travel diary (for travel for six or more nights in a row) if:

    • you receive a travel allowance for you to travel as a crew member of an aircraft
    • you only claim up to the amount of your allowance
    • the travel is principally outside of Australia.

     Travel allowances and exceptions

    You can't automatically claim a deduction just because you receive an allowance. Where you do receive an allowance, you might not have to keep receipts and a diary (as applicable).

    For the exceptions to apply, the travel allowance must be:

    • for accommodation, food or drink, or other expenses incidental to your travel – if you only receive an allowance for food and drink, you can't rely on the exceptions for your accommodation or incidental expenses
    • to cover a specific work-related journey – the allowance must be calculated based on your journey(s). It cannot be a fixed amount paid to you regardless of how much travel you do
    • a bona fide travel allowance – the allowance must be an amount which will reasonably cover your expenses, and not just a token amount
    • paid to you as an allowance – the allowance can't be folded in to your salary or wages – it must be a separate amount paid as a travel allowance for your travel.

    Some travel allowances might not appear on your payment summary or income statement.

    Example – not a bona fide travel allowance

    Mel receives $30 a day from her employer when she is required to travel. The employer does not pay for any travel expenses directly so Mel is required to organise and pay for everything herself, including meals and accommodation.

    Mel keeps a record of her travel expenses when travelling. Even though the amount she claims in her tax return is less than the ATO's reasonable amounts, she must keep all of her receipts because the amount she receives from her employer is not considered to be a bona fide travel allowance – it will not cover the costs Mel will incur when she travels.

    End of example

    See also:

    Travelling for work

    You can only claim a deduction for accommodation, food or drink, and other expenses incidental to your travel if all of the following apply:

    • your work activities require you to undertake travel
    • the work requires you to sleep away from home overnight
    • you have a permanent home elsewhere
    • you don't incur the expenses in the course of relocating or living away from home.

    You aren't sleeping away from home overnight if:

    • you are on duty while sleeping at a workplace near your home – for example, you are a hostel worker, a care worker or overnight supervisor at a boarding school
    • you choose to sleep near your workplace, rather than returning home between your shifts.

    Example – meal by meal approach to reasonable amounts

    Bruce is required to travel for work overnight. He leaves at 3pm and returns home at 7pm the following day. Bruce's employer pays him a travel allowance for meals and incidentals for the period of his travel. This is shown on Bruce's payment summary.

    The employer pays for the accommodation directly. To determine if the substantiation exception applies, Bruce must calculate his expenses for dinner on day one, then separately calculate his expenses for breakfast, lunch and dinner on day two, as well as calculate his incidental expenses for day one and day two.

    As long as his claim for deduction for each meal and day of incidental expenses is not more than the ATO's reasonable amount for each meal and daily incidental amount, Bruce is not required to keep receipts.

    End of example
    Last modified: 30 May 2019QC 56003