Work-related travel expenses you can claim
Travel expenses that you claim must directly relate to your work as an employee. These expenses may include:
- work-related car expenses
- expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers
- actual expenses – such as any petrol, oil and repair costs if you travel in a car that is owned or leased by someone else
- public transport – including taxi fares
- bridge and road tolls
- parking fees
- short-term car hire.
Generally, the cost of normal trips between home and work is a private expense for which you cannot claim an income tax deduction. However, as an employee there are certain situations where you may be able to claim deductions for travel between your home and workplace.
Transporting bulky tools and equipment
For more information about what you can claim and the records you need to keep, view our YouTube video Transporting bulky tools and equipment.
This video plays for 51 seconds. Select the play button on the image to view or read the transcript.
You can claim the cost of using your car to travel between your home and work if all of the following apply:
- you have to carry bulky tools and equipment you need to use at work
- it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice
- there is no secure storage area at your workplace.
Andre is a concreter. His employer does not supply a secure tools storage area at his workplace so Andre is required to transport his bulky tools and equipment to and from work every day.
Andre is entitled to claim a deduction for the expenses he incurs to transport his tools and equipment between his home and work.
Josie works on a large project where secure storage is available for her tools. As Josie chooses to transport her tools to and from work every day, instead of leaving them in the secure storage provided, she cannot claim a deduction for her transportation costs.
End of example
Travelling between workplaces
Work-related daily travel expenses also include the cost of travel:
- directly between two separate workplaces – for example, when you have a second job
- from your normal workplace to an alternative workplace, while you are still on duty, and back to your normal workplace or directly home (see example 4)
- from your home to an alternative workplace, and then to your normal workplace or directly home – for example, if you travel to a client’s premises to work there for the day.
- Taxation Ruling TR 95/34 – Income tax: employees carrying out itinerant work – deductions, allowances and reimbursements for transport expenses
Jack and Bill are carpenters who are employed to construct roof trusses in their employer's factory and also to install the trusses in houses at a housing estate.
The travel between home and the factory or between home and the housing estate is travel to and from their normal work place. It is private and no deduction is allowable. The cost of travel between the factory and the housing estate is an allowable deduction.
End of example
You can claim the cost of travelling between your home and work if you have shifting workplaces – that is, you regularly work at more than one location each day before returning home.
Ramesh is a shop fitter and is required to travel to several worksites each day to provide quotes to clients and work on various jobs.
Ramesh can claim a deduction for his car expenses between his home and work because he works at several worksites each day.
End of example
Note: If you travel to and from a place of education because you are completing a work-related education course, you may be entitled to claim the travel costs as a self-education expense at label D4 Work-related self-education expenses on your tax return.
Parking expenses and tolls
A deduction is allowable for parking fees (but not fines) and tolls if the expenses are incurred while you are travelling:
- between two separate places of work
- to a place of education for work-related self-education purposes (if the self-education expenses are deductible)
- in the normal course of duty and the travelling expenses are allowable deductions – for example, travel between home and work when transporting bulky tools and equipment.
Otherwise, the cost of that travel is a private expense and the parking fees and tolls are not claimable.
Note: If your employer has business or associated premises and you park in the vicinity of those premises for more than four hours a day, your parking expenses may not be allowable.
Work-related daily travel expenses you cannot claim
Unless you meet the conditions outlined in Work-related travel expenses you can claim, generally the cost of normal trips between home and work is a private expense you cannot claim a deduction for, even if:
- you work outside normal business hours – for example, working weekends or overtime
- you are on call
- you do minor tasks, such as picking up a timesheet on the way to work or home
- you live a long distance from work
- there is no public transport available so you use a car.
Note: You cannot claim a deduction for the cost of:
- travelling to another workplace for a social function
- any fines you receive, such as speeding or parking infringements.
How to claim your work-related daily travel expenses
How you work out your claims and what records you need to keep will depend on whether the motor vehicle you use is considered to be a car and whether you own or lease it.
Working out if your vehicle is a car
Your vehicle is considered not to be a car if it is any of the following:
- a vehicle with a carrying capacity of one tonne or more, such as a utility truck or panel van
- a vehicle with a carrying capacity of nine passengers or more, such as a minivan
- a motorcycle.
To determine whether your vehicle has a load carrying capacity of one tonne or more you will need to refer to the manufacturer’s handbook for your vehicle. The load carrying capacity of your vehicle is the difference between the gross vehicle mass and the kerb weight.
If your vehicle is not a car, see Claiming expenses for vehicles other than cars.
Aaron owns a vehicle with a gross vehicle mass of 2,402 kg and a kerb weight of 1,040 kg, therefore the payload or carrying capacity weight of Aaron’s vehicle is:
2,402 kg – 1,040 kg = 1,362 kg
As the vehicle’s payload or carrying capacity is greater than 1,000 kg (or one tonne), Aaron’s motor vehicle claim must be made at label D2 Work-related travel expenses on his income tax return. Aaron’s claim is limited to the actual expenses incurred to the extent that the expenses are for work purposes.
End of example
Claiming car expenses
If the motor vehicle you drive is a car, and you are entitled to claim a deduction for your work-related car expenses, there are some changes to work-related car expense deductions from 1 July 2015. Below is a breakdown of the methods which applied from and before 1 July 2015.
From 1 July 2015 - two methods
The government has simplified the car expense deductions for 2015–16 and future income years. From 1 July 2015, the one-third of actual expenses method and 12% of original value method have been abolished.
The two methods available from 1 July 2015 are:
Note: You can claim a deduction for the decline in value (depreciation) of your car up to the value of the car limit if you use the logbook method.
Before 1 July 2015 – four methods
There are four methods you can use to work out the amount you can claim.
The four methods are:
- cents per kilometre
- 12% of original value
- one-third of actual expenses.
Note: You can claim a deduction for the decline in value (depreciation) of your car up to the value of the car limit if you use either the logbook or the one-third of actual expenses method.
The two methods most commonly used by employees in the building and construction industry are:
- cents per kilometre method
- logbook method.
Cents per kilometre method
You can use this method to claim up to a maximum of 5,000 work kilometres even if you have travelled more than 5,000 work kilometres. For example, if you have travelled 5,085 work kilometres, you cannot claim for the extra 85 kilometres.
When working out your deduction using the cents per kilometre method, you do not need receipts or other written evidence but we may ask you how you worked out your estimate of work kilometres. For example, by:
- using a diary of work-related travel
- basing your costs on a regular pattern of travel.
Rudy travels five kilometres each day while carrying out work-related activities. He worked Monday to Friday for 48 weeks during the income year. It would be reasonable for Rudy to calculate his work kilometres in the following way:
5 (km) x 5 (days) x 48 (weeks) = 1,200 work kilometres
Henry works on building sites. From his diary notes of appointments during the income year, he calculates that he has travelled 4,825 kilometres for work-related activities. Although he does not have an established pattern of travel, his diary notes form a reasonable basis for his calculation.
End of example
The logbook method provides a way of working out the percentage of your car use that is for work purposes. You can then claim a deduction for this percentage of each car expense you incur.
When using the logbook method, you must keep all of the following:
- a logbook: to work out the percentage of your car use that was for work purposes your logbook must cover a period of 12 continuous weeks and is valid for five years
- odometer records: record your opening and closing odometer readings for each year you use the logbook method
- written evidence for all your car expenses: you can use your odometer records to estimate your fuel and oil costs instead of keeping receipts.
Marco is employed by a large construction company and uses his car for work purposes. He pays for fuel, oil, repairs and maintenance at the local garage. He pays by credit card, EFTPOS, or occasionally cash.
Marco claims his car expenses via the log book method, and so does not need to keep the receipts for fuel and oil (he relies on his odometer records). However, he needs to keep receipts for the repairs and maintenance.
End of example
Note: You claim your car expenses at D1 Work-related car expenses on your income tax return.
Motor vehicle provided by your employer or any other person
You cannot claim a deduction for car expenses if your employer or any other person provides a car for you and you do not pay for any of the running costs.
You cannot claim a deduction for any expenses you incur for the direct operation of a car that your employer provides and that you or your relatives use privately at any time, even if the expenses are work related. Such expenses form part of the valuation of the car for fringe benefits tax purposes.
Claiming expenses for vehicles other than cars
If you are eligible to claim your vehicle expenses and your vehicle is a motorcycle or has a carrying capacity of one tonne or more, such as some panel vans and utility trucks, you can only claim your actual expenses.
Your actual expenses include the cost of:
- fuel and oil
- repairs and servicing
- interest on a car loan
- lease payments
If you use your vehicle for both work and private purposes, you can use a diary to show how much of your expenses relate to each. Remember to keep receipts for your actual expenses – this includes for fuel and oil costs. Bank statements and credit card transaction receipts are not sufficient evidence for fuel and oil purchases, you need to keep your actual receipts.
Note: You claim these expenses at D2 Work-related travel expenses on your income tax return.