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  • Travel expenses

    You can claim travel expenses you incur when you travel away from home overnight for work.

    For a summary of this content in poster format, see Travel expenses (PDF, 523KB)This link will download a file.

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    What is overnight travel?

    You will generally be travelling overnight for work in the course of performing your employment duties where:

    • there is no change to your regular place of work (the usual or normal place where you start and finish your work duties for your employer)
    • you are away from home for short periods of time
    • you stay in short term accommodation such as a hotel.

    You can claim your travel expenses in these circumstances.

    An employee travelling away from their home overnight for work usually isn't, or can't be, accompanied by family or visited by family or friends.

    You will not be travelling away from home overnight for work if:

    • because of your personal circumstances, you live a long way from where you work
    • are living at a location where you are working
    • choose to sleep at or near your workplace rather than returning home.

    Expenses you incur in these circumstances are not deductible because you incur them to start earning employment income and are private or domestic in nature.

    Travel expenses you can claim

    You can claim travel expenses if you incur them when travelling away from your home overnight in the course of performing your employment duties. For example, if you go interstate for a work conference.

    Travel expenses include:

    • accommodation expenses – for example, the cost of staying in a hotel, motel, serviced apartment, caravan, a property booked through a digital platform etc
    • meals (food and drink) expenses
    • incidental expenses which are minor, but necessary expenses associated with your work-related travel – for example, a car parking fee, bus ticket or a charge for using the phone or internet for work-related purposes at your overnight accommodation
    • transport expenses to get to and from the location you are travelling to overnight for work – for example the cost of flights.

    If your travel is for work and private purposes you need to apportion your expenses (see Apportioning travel expenses).

    You need to keep records such as receipts or other written evidence for your travel expenses. In some circumstances, you also need to keep a travel diary.

    There are some exceptions from providing written evidence for accommodation, meals and incidental expenses and from providing a travel diary, see Exceptions for keeping travel expense records.

    You claim your deduction for these expenses as work-related travel expenses in your income tax return.

    Example: travel expenses are deductible

    Beth is an executive in a large banking company. She travels from her regular workplace in Melbourne to Sydney for a three-day meeting with some clients. Beth pays for her flights between Melbourne and Sydney, her hotel and all of the meals she has while she is in Sydney. She also incurs some incidental expenses which include the cost of taxi fares from her hotel to the offices of her clients. Beth has receipts for all of these expenses and her employer doesn't reimburse her.

    As Beth's regular place of work remains her workplace in Melbourne, she is in Sydney for a short period of time and she stays in a hotel, Beth is travelling away from her home overnight in the course of performing her employment duties. As such, Beth can claim a deduction for the cost of her flights, accommodation, meals and incidental expenses

    End of example

    When you can't claim travel expenses

    You can't claim travel expenses you incur if:

    • you don't incur any expenses, that is
      • you slept in accommodation your employer provides
      • you eat meals your employer provides
      • your employer or a third party reimburses you for any costs you incur
       
    • due to your personal circumstances, you live a long way from where you work
    • you are living at a location where you are working
    • you choose to sleep at or near your workplace rather than returning to your home between your work shifts.

    Example: living a long way from work – travel expenses aren't deductible

    Ainsley lives in Brisbane with his family. He accepts a job on a long-term project that is being carried out in Sydney. His employment contract indicates that his place of work is the office located on the project site in Sydney. As Ainsley lives in Brisbane and doesn't need to be physically on site all the time, he has an informal agreement with his employer to work from home whenever he is not required on site. When it is necessary for Ainsley to be on site, he is generally there for no longer than two weeks at a time. As Ainsley's regular place of work is located in Sydney, his employer does not cover the cost of his flights to Sydney or his accommodation, meal and incidental expenses when Ainsley stays near the site.

    Ainsley can't claim a deduction for the accommodation, meal and incidental expenses he incurs when he travels and stays in Sydney to work at the project site. The expenses are private expenses. Ainsley incurs the expenses as a consequence of his personal circumstances, that is, it is his decision to live in Brisbane and work in Sydney.

    Ainsley can't claim the cost of his flights between Brisbane and Sydney for the same reasons.

    End of example

     

    Example: choosing to sleep near workplace - travel expenses aren't deductible

    Max and Doris have retired from full-time work and spend their time travelling around Australia. They use their caravan as accommodation while they are travelling. When Max and Doris need some extra money, they work as fruit pickers for a couple of weeks at a time.

    During the income year, Max and Doris spend 42 weeks travelling around Australia and ten weeks working at several different farms.

    Max and Doris can't claim a deduction for the decline in value of their caravan or for any amounts they spend on meals, caravan park rental and incidentals during the ten week period they spent working. The caravan isn't used for a taxable purpose (for the purpose of gaining or producing their assessable income) and the meal, caravan park rental and incidental expenses are private in nature.

    End of example

     

    Example: travel expenses aren't deductible

    Omar is a sales manager. Under the terms of his employment agreement, Omar is based in his employer's Perth office. He is also responsible for the offices in Albany and Broome.

    When Omar travels to the Albany and Broome offices for meetings and staff performance appraisals he is away overnight. His employer books and pays for his flights and his accommodation when he travels. Omar uses his employers credit card to pay for meal and incidental expenses when he travels.

    Although Omar is travelling away from his home overnight for work, he can't claim a deduction for his flights, accommodation, meals or incidental expenses. This is because his employer pays for all of these expenses directly.

    End of example

    You must reduce your claim to exclude any travel expenses that relate to any private portion of your trip (see apportioning travel expenses).

    Living at a location

    You will generally be living at a location where:

    • there is a change in your regular place of work
    • the length of the overall period you are away from your home is relatively long
    • you stay in longer term or settled accommodation, such as a unit or house.

    An employee living at a location usually is, or can be, accompanied by family or visited by family and friends.

    Example: travel expenses not deductible

    Maria works at her employer's office in Adelaide. She lives close to the office with her family. Maria's employer is setting up a new office in Perth and assigns Maria to the Perth office for six months to assist in setting it up.

    During the period she is in Perth, Maria lives in a two bedroom unit close to the new office which would be big enough to accommodate her family if they travelled to Perth with her. Maria's family remain in the family home in Adelaide rather than join her in Perth.

    Maria is living in Perth for the six month period rather than travelling to Perth because:

    • she is staying away from her home for a relatively long period
    • she is staying in longer term accommodation
    • her regular place of work has become the Perth office.

    The expenses Maria incurs for her accommodation and meals while she is working in Perth are private expenses and they are not deductible.

    Even if Maria travelled home each weekend, she would still be living in Perth for the six month period.

    End of example

    Records and evidence of travel expenses

    You need to keep receipts or other written evidence for your travel expenses. A receipt from the supplier of the goods and services must show the:

    • name of the supplier
    • amount of the expense
    • nature of the goods or services
    • date the expense was paid
    • date of the document.

    You may also need to keep travel records (such as a Travel diary) if you are away from home for six or more nights in a row. This is in addition to keeping receipts for your expenses.

    If you receive a travel allowance for your overnight travel, you may not need to keep receipts or travel records. In these circumstances you will still be required to show:

    • you spent the money in performing your work duties
    • how you worked out your deduction
    • that you spent the money yourself and were not reimbursed
    • you correctly declared your allowance as income in your tax return.

    The exception to keeping receipts does not apply to accommodation expenses you incur when you travel overseas and the exception from keeping travel records does not apply if you travel overseas for six or more nights in a row.

    See also:

    If you receive a travel allowance

    Receiving a travel allowance from your employer does not automatically mean you can claim a deduction. In all cases, you must be able to show:

    • you were away overnight
    • you have spent the money
    • the travel directly relates to earning your employment income
    • how you work out your claim.

    If you receive a travel allowance, you may be able to rely on the exception from substantiation. If you can rely on this exception, you may not be required to get receipts or other written evidence or keep a travel diary.

    Travel allowances may or may not be shown on your income statement or payment summary.

    If it’s on your income statement or payment summary, you:

    • must include the allowance as assessable income in your tax return
    • can claim a deduction for the amount you spent on deductible expenses.

    If the travel allowance is not on your income statement or payment summary, and you spent the full amount on deductible expenses, you can either:

    • not include the allowance in your tax return and not claim a deduction for your expenses
    • include the allowance in your tax return and claim a deduction for the amount you spent on deductible expenses.

    If the travel allowance is not on your income statement or payment summary and you didn't spend the full amount on deductible expenses, you:

    • must include the allowance as assessable income in your tax return
    • can claim a deduction for the amount you spent on deductible expenses.

    Watch: Need to claim overnight work-related expenses?

    Media: Need to claim overnight work-related expenses?]
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiubx7do7d External Link (Duration: 01:18)

    Example: allowances listed on income statement

    William works for a company in Sydney. William’s employer requires him to visit clients located in country New South Wales twice per month (for example, every second week). This involves William sleeping away from his home for around three to four nights every second week.

    William’s employer pays him an allowance of $150 per night to cover accommodation, meal and incidental expenses and includes the allowance on his income statement.

    As William’s employer has shown the travel allowance on his income statement, he must include that allowance in his income on his tax return. William can claim a deduction for the amount he spends on meals and accommodation without keeping receipts or other written evidence, as long as his claim doesn't exceed the reasonable allowance amount. If William wishes to claim more than the reasonable allowance amount, he will need to keep written evidence for all his expenses.

    William can't automatically claim the reasonable amount as a deduction just because he has received an allowance. He can only claim the amount he spends on accommodation, meal and incidental expenses.

    Even if William does rely on the exception from keeping receipts or other written evidence, he may still be required to show the basis for determining the amount of his claim, that he spent the money, and that the travel was for work-related purposes. 

    End of example

     

    Example: allowances not listed on income statement

    Assume William from the previous example received an allowance of $150 per night from his employer to cover his accommodation, meal and incidental expenses and that William’s employer does not show the allowance on his income statement.

    William isn't required to include the amount as income on his tax return, provided he has spent the entire amount and isn't seeking to claim any excess. As the allowance isn't included in William’s assessable income, he isn't entitled to claim a deduction for the amount he spends on accommodation, meal and incidental expenses.

    End of example

     Exception from substantiation

    If you receive a travel allowance and spend less than the Commissioner’s reasonable amount, you may not need to keep written evidence such as receipts, or a travel diary.

    The Commissioner's reasonable amount is set each year. The amount is used to determine whether an exception from keeping written evidence applies for the following expenses which are covered by a travel allowance:

    • accommodation
    • meal
    • incidentals.

    You must always get and keep a receipt for your accommodation when you travel overseas. The exception from substantiation only applies to meals and incidentals you incur when travelling overseas.

    An exception does not apply to keeping a diary when you travel overseas for six or more nights in a row.

    You can't automatically claim a deduction for the Commissioner's reasonable amount, even if you receive an allowance from your employer. You can only claim the amount you incurred on travel expenses.

    See also:

    Apportioning travel expenses

    You need to apportion your travel expenses if they are partly private in nature. For example, if you add a holiday to the end of work-related travel, family or friends travel and stay with you when you travel overnight for work or you attend a work-related activity while you happen to be on holiday.

    If you travel away from your home overnight on a work trip, you may not be required to apportion your costs where there is a minor private component that is merely incidental to the work.

    Examples of apportioning travel expenses

    Example: travelling with a partner or family member

    If you take your partner or children away with you when you travel for work you can't claim the cost of any travel expenses you incur for them. For example, if you pay for a two bedroom apartment to accommodate your children, you can only claim a deduction for the cost you would have incurred on a one bedroom apartment had you travelled alone.

    End of example

     

    Example: travel to another destination from a work location

    If you fly to Perth for a seven day work conference and add on a return trip to Broome for days for private purposes.

    You can only claim your flights to and from Perth and the accommodation, meals and incidental expenses that you incurred during the seven days you spent at the work conference in Perth.

    End of example

     

    Example: combined personal and work-related trip to same destination

    While you are in the process of booking a holiday to Sydney to see an art exhibit, your employer asks if you’d like to attend a three day work-related conference in Sydney which coincidently is to be held from the Monday following your planned holiday.

    You change your travel arrangements to include the additional time in Sydney. In total, you spend three days in Sydney for private purposes followed by three days at the conference.

    You must apportion your flights for the private component of your trip (50%) and only claim the accommodation, meals and incidental expenses you incur during the three day work-related conference.

    End of example

     

    Example: personal travel incidental to work-related travel

    You fly to London for a 10 day international, work-related conference. You stay over for an extra two days to do some sightseeing. While you can't claim the cost of accommodation and meals for the two days of private travel, the private component of the trip is merely incidental and so you can claim the full cost of your airfares.

    End of example

     

    Example: attending work-related events during personal travel

    You are holidaying in Cairns when you become aware of a work-related seminar which runs for half a day. You can claim the cost of attending the seminar, but you can't claim your airfares to and from Cairns, or accommodation and meals whilst in Cairns, as the primary purpose of the travel is private.

    End of example

    See also:

    Last modified: 18 Jun 2021QC 31982