If you travel for business, tax time is a good opportunity to review your travel expenses and make sure you’re claiming the deductions you’re entitled to. You can generally deduct the business portion of expenses you incur when travelling for work, as long as you have the right records to support your claim.
Depending on your circumstances, you may be able to deduct travel expenses such as:
- accommodation and meals when you stay away overnight for business
- airfares and public transport fares, including buses, trains, trams, taxis and ride-sourcing services
- car hire-related expenses
- fuel, tolls and parking costs associated with business travel.
When claiming travel expenses, remember you can only deduct the business-related portion. If your business travel involves any private expenses you won’t be able to deduct them. Private expenses may include:
- sightseeing, entertainment and other leisure activities,
- a holiday you add onto your business travel, or
- costs for family members travelling with you.
Keeping good records
Good record keeping throughout the year can make tax time easier. Keep records that show your travel was for business purposes, such as invoices, tickets, boarding passes and other supporting documents. You need to keep these records for 5 years, so you should store them in a safe place. They should also be written in English, or be easily converted to English.
If you're a sole trader or a partner in a partnership travelling away from home for 6 or more consecutive nights, you'll need to keep a travel diary. Recording your business activities as you go can help you work out and substantiate your claims.
Employee travel expenses
If you have employees who travel for work, you may be able to claim travel expenses that your business pays for directly or reimburses. Keep in mind that paying for an employee's private travel may attract fringe benefits tax (FBT), and different rules can apply to travel allowances.
Access free resources
To help you navigate tax time with confidence, explore our Tax Time toolkit for small business. It brings together helpful information, tools, calculators and a range of Small business guides in one convenient place, making it easier to prepare, lodge and stay on track this tax time and throughout the year.
You can also build your knowledge through our free, self-paced course on Business travel expenses recordsExternal Link using Essentials to strengthen your small businessExternal Link.
Find out more on how to claim deductions with our Travel expenses guide.
You can also speak to a registered tax practitioner for advice.
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