Employees guide for work expenses

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Part D - Substantiation requirements

Additional requirements for depreciating assets
Substantiating overnight travel expenses
Substantiation of car expenses

To claim a deduction for a work expense, including the decline in value of a depreciating asset (see Decline in value under the capital allowance provisions ), you must substantiate it by getting written evidence. This evidence can be in paper or electronic form. For most work expenses, written evidence will be a receipt or similar document from the supplier that shows all the following:

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the name or business name of the supplier

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the amount of the expense or cost of the asset

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the nature of the goods or services that you purchased

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the date you purchased the goods or services

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the date the document was produced.

Example – valid receipt

Carla, who works on a construction site, buys a new pair of steel-capped boots from an online store. She gets a receipt by email that shows that she ordered and paid $229 for the boots from Workwear Online on 23 January 2019, and that the receipt was generated on 25 January 2019, when the boots were posted. The receipt is suitable substantiation, as it has all the information required, even though it was in electronic form.

If you don't get, or can't get, written evidence such as a receipt, you can provide other forms of evidence for your expenditure which might include, for example, bank statements, invoices or purchase orders. Together, the other forms of evidence need to show all of the items of information described above that must be shown on written evidence.

Example – alternative substantiation

Amy pays her annual professional association fees but doesn't get the receipt. She has the letter from the organisation showing the amount due and payable and a credit card statement that shows she paid the organisation the same amount for 'Professional fees' a few days later. The combination of documents is sufficient for Amy to substantiate her expenses.

Example – insufficient substantiation

Mark buys some tools from a hardware store but he doesn't keep the receipt. He paid with cash that he had withdrawn that day. While he has bank records that show he made the withdrawal and the date the withdrawal was made, the bank statements don't show the name of the hardware store, the nature of the goods purchased or the cost of the tools he purchased. Mark has not substantiated the cost of the tools and he can't claim a deduction for this expense.

For more information, see:

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Law Administration Practice Statement PS LA 2005/7 Substantiating an individual's work-related expenses .

Additional requirements for depreciating assets

As well as written evidence that meet the substantiation requirements, such as the original purchase documents, you will need to keep additional records in respect of the depreciating assets you wish to claim. These records must show:

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the rate or effective life you used to work out the decline in value and how you calculated it if you didn't use the Commissioner's rate or effective life

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the method you used to calculate the decline in value

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your work-related percentage and how you calculated it.

Substantiating overnight travel expenses

If you meet the criteria to claim overnight travel expenses ( accommodation , meals (food and drink) , or expenses to the travel) as a work-related expense, generally you need to keep written evidence for all of the overnight travel expenses you have incurred and intend to claim. This can include receipts for meal purchases, accommodation and other incidental expenses.

The specific records you need to keep depend on a number of factors including whether:

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you receive a travel allowance

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the allowance is reported on your payment summary or income statement

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the travel allowance is to cover domestic or overseas travel

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your travel away from home is for 6 nights or more in a row.

If the travel is longer than 6 nights away from home, you need to keep a travel diary, unless an exception applies.

Travel diary

A travel diary is a record of your work trip where you record the dates, places, times and duration of your activities and travel. The diary allows you to accurately calculate the work-related and private parts of the trip. You can only claim the work-related part of the trip.

There may be some exceptions from substantiation for your overnight travel expenses. Please refer to Exceptions for overnight travel for further information.

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For more information on how to keep a travel diary, see Travel diary or record of your activity .

Substantiation of car expenses

Work-related car expenses have some additional requirements for substantiation and how you calculate your deduction. For information on these requirements, see Car expenses .

Amendment history

 

 

 

 

References

Related Rulings/Determinations:
IT 2477
IT 2543
TR 92/15
TR 93/30
TR 94/22
TR 95/25
TR 95/34
TR 96/18
TR 97/7
TR 97/12
TR 97/24
TR 98/5
TR 2000/2
TR 2003/16
TR 2004/6
TR 2020/1
TR 2021/1
TR 2021/4
TR 2024/3
TD 93/114
TD 97/19

Related Practice Statements:
PS LA 1999/2
PS LA 2001/6
PS LA 2005/7

Case References:
AT85/98 and Commissioner of Taxation
[1987] AATA 145

B636/1985 and Commissioner of Taxation
[1986] AATA 318

Case C47; Case 44
71 ATC 219
11 CTBR (NS) 207

Case K2; Case 21
78 ATC 13
22 CTBR (NS) 178

Case No 69/1978
79 ATC 488
23 CTBR (NS) 680

Case No M 99/1981
82 ATC 139
25 CTBR (NS) 696

Case No M 282/1979
81 ATC 383
25 CTBR (NS) 200

Case No M 208/1983
84 ATC 411
27 CTBR (NS) 867

Case Nos M 309/1980, M 216/1981
82 ATC 72
25 CTBR (NS) 608

Case N44; Case 114
81 ATC 216
24 CTBR (NS) 915

Case P31; Case Q17
82 ATC 141
83 ATC 62

Case P114; Case 47
82 ATC 586
26 CTBR (NS) 365

Case R49; Case 104
84 ATC 387
27 CTBR (NS) 836

Case R70; Case 124
84 ATC 493
27 CTBR (NS) 981

Case S82; Case 87
85 ATC 608
28 CTBR (NS) 678

Case T47; Case No 1409/1985
86 ATC 381
29 CTBR (NS) 345

Commissioner of Taxation v Faichney
[1972] HCA 67

Commissioner of Taxation (Cth) v Finn
[1961] HCA 61

Commissioner of Taxation (Cth) v Forsyth
[1981] HCA 15

Commissioner of Taxation (Cth) v Smith
[1981] HCA 10

Commissioner of Taxation (Cth) v Vogt
[1975] 1 NSWLR 194

Commissioner of Taxation (Cth) v Wiener
8 ATR 335

Federal Commissioner of Taxation v Maddalena
71 ATC 4161
2 ATR 541

Frankcom, Terrence James v Commissioner of Taxation
[1982] VicSC 469

Fullerton, L.W. v Commissioner of Taxation
[1991] FCA 702

Handley v Commissioner of Taxation (Cth)
[1981] HCA 16

Lodge v Commissioner of Taxation (Cth)
[1972] HCA 49

Lunney v Commissioner of Taxation
[1958] HCA 5

Morris v Commissioner of Taxation
[2002] FCA 616

NT85/4959 and Commissioner of Taxation
[1987] AATA 575
87 ATC 470

Re Taxation Appeals
[1991] AATA 197

Re Taxation Appeals
[1994] AATA 315

Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation
[1949] HCA 15

Sun Newspapers Limited v Federal Commissioner of Taxation
[1938] HCA 73

ST86/633 and Commissioner of Taxation
[1987] AATA 567
87 ATC 575

ST87/36 and Commissioner of Taxation
[1987] AATA 424

TT 87/8, TT 87/168 and Commissioner of Taxation
[1987] AATA 863

Thomas v Commissioner of Taxation (Cth)
[1972-73] ALR 368

Other References:
Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025
PCG 2023/1
PCG 2024/2