Income tax: what are the reasonable travel and meal allowance expense amounts for 2004-05?
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FOI status:may be released
|The number, subject heading, date of effect and paragraphs 1 to 15 of this document are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner.|
- overtime meal allowance expenses;
- domestic travel allowance expenses;
- travel allowance expenses for employee truck drivers; and
- overseas travel allowance expenses.
Taxation Ruling TR 2004/6
2. This Determination should be read together with Taxation Ruling TR 2004/6 which explains the substantiation exception and the way in which these expenses are able to be claimed. Key points about claiming travel allowance expenses and meal allowance expenses are:
- Claim must be allowable - A deduction claim cannot exceed the amount actually incurred for work-related purposes. The payment of an allowance does not of itself allow a deduction to be claimed.
- Expenses covered - The expenses that the substantiation exception apply to are:
- domestic travel allowance expenses - accommodation, food and drink, and incidentals that are covered by the allowance (but the accommodation rates do not apply to employee truck divers);
- overseas travel allowance expenses - food and drink, and incidentals that are covered by the allowance (the exception does not apply to accommodation); and
- Meal allowance expenses - for food and drink in connection with overtime worked.
- For travel allowance expenses - the employee must sleep away from home.
- Substantiation exception for reasonable amounts - Where the amount claimed is no more than the applicable reasonable amount, substantiation of the claim with written evidence is not required.
- Allowance must be paid - The substantiation exception only applies if the employee is paid a meal allowance under an industrial instrument or a travel allowance. The allowance must have an identifiable connection with the nature of the expense covered.
- Claims in excess of reasonable amounts - If the amount claimed is more than the reasonable amount, the whole claim must be substantiated, not just the excess.
- Verification of reasonable claims - In appropriate cases, where the substantiation exception is relied on, the employee may still be required to show an entitlement to the substantiation exception, the reasonable rate used, and entitlement to a deduction, for example that work-related travel was undertaken, a bona fide travel allowance was paid, the claim is below the reasonable amount for the destination, and commercial accommodation was used. The nature and degree of evidence will depend on the circumstances, for example the circumstances under which the employer pays allowances, the occupation of the employee, the total amount of allowances received and claimed during the year by the employee.
- Tax return treatment - Both allowance and expense do not need to be shown in the employee's tax return if the allowance does not exceed the reasonable amounts and it has been fully spent on deductible expenses. If an amount less than the allowance has been spent, then the income tax return must include the allowance and the expenses claimed. Where a deduction claim is made, the allowance paid must also be included in the tax return.
Reasonable amount for overtime meal allowance expenses
3. For overtime meal expenses to be considered under the exception from substantiation, the meal allowance must be a bona fide meal allowance (see paragraph 87 of Taxation Ruling TR 2004/6) paid or payable under a law of the Commonwealth or of a State or Territory, or an award, order, determination or industrial agreement in force under such a law (section 900-60 of the ITAA 1997).
Reasonable amounts for domestic travel allowance expenses
Types of expenses
- accommodation at daily rates (for domestic travel only);
- meals (showing breakfast, lunch and dinner); and
- deductible expenses incidental to travel.
- Each Australian State and Territory capital city;
- Certain specified high cost regional and country centres (at individual rates);
- Other specified regional and country centres (at a common rate);
- All other regional and country centres (at a common rate); and
- Specified overseas locations (selected countries or regions in a country).
Type of accommodation
7. The accommodation rates shown for domestic travel apply only for stays in commercial establishments like hotels, motels and serviced apartments. If a different type of accommodation is used the rates do not apply.
8. The reasonable amount for meals depends on the period and time of travel. That is, the rates only apply to meals (that is breakfast, lunch, dinner) that fall within the time of day from the commencement of travel to the end of travel covered by the allowance.
Reasonable amount for 2004-05
|Food and drink
|High cost country centres||See Table 4||74.35||14.20||Variable - see Table 4|
|Tier 2 country centres (see Table 5)||85||B'fast 16.40
|Other country centres||70||67.55||14.20||151.75|
|Food and drink
|High cost country centres||See Table 4||87.80||20.20||Variable - see Table 4|
|Tier 2 country centres (see Table 5)||102||B'fast 18.40
|Other country centres||84||73.70||20.20||177.90|
|Place||Accomm.||Food and drink||Incidentals||Total|
|Other than Capital City||$105 or the relevant amount at Table 4||$85
|Country centre||$||Country centre||$|
|Ballarat (Vic)||95.00||Karratha (WA)||135.00|
|Broome (WA)||116.00||Kununurra (WA)||104.00|
|Burnie (Tas)||93.50||Newcastle (NSW)||108.00|
|Carnarvon (WA)||92.00||Newman (WA)||115.00|
|Christmas Island (WA)||100.00||Northam (WA)||100.00|
|Cocos (Keeling) Islands||90.00||Pt Hedland (WA)||117.00|
|Dampier (WA)||95.00||Pt Lincoln (SA)||99.00|
|Devonport (Tas)||92.00||Thursday Island (QLD)||130.00|
|Gold Coast (QLD)||104.00||Tom Price (WA)||92.00|
|Horn Island (QLD)||108.00||Weipa (QLD)||115.00|
|Jabiru (NT)||170.00||Wollongong (NSW)||100.00|
|Country centre||Country centre|
|Albany (WA)||Katherine (NT)|
|Alice Springs (NT)||Launceston (Tas)|
|Ararat (VIC)||Halls Creek (WA)|
|Bathurst (NSW)||Maitland (NSW)|
|Bendigo (VIC)||Maitland (NSW)|
|Bunbury (WA)||Wagga Wagga (NSW)|
|Cairns (QLD)||Warrnambool (VIC)|
Reasonable travel allowance expense claims for employee truck drivers
11. Amounts claimed up to the food and drink component only of the reasonable domestic daily travel allowance amounts for 'other country centres' are considered to be reasonable for meal expenses of employee truck drivers who have received a travel allowance and who are required to sleep away from home. For the 2004-2005 income year, the relevant amounts are:
|Salary range||Food and drink|
|$78,750 and below||B'fast $16.40
$67.55 per day
|$78,751 and above||B'fast $18.40
$73.70 per day
(For further information on truck drivers see the Explanations part of TR 2004/6 at paragraphs 72 to 75 and Taxation Ruling TR 95/18.)
Office holders covered by the Remuneration Tribunal
12. Daily domestic travel allowance expense claims made by office holders covered by the Remuneration Tribunal are considered to be reasonable amounts if they do not exceed the rate of allowances set by the Remuneration Tribunal for that office holder.
Federal Members of Parliament
13. The travel allowances paid to Federal Members of Parliament and Federal Parliamentary Secretaries, under the arrangements that commenced on 14 April 1998, are considered reasonable amounts for the recipients of those allowances. This includes the Capital City and Canberra travel allowance rates for domestic travel, having regard to the circumstances under which those allowances are paid.
Reasonable amounts for overseas travel allowance expenses
14. The reasonable amounts for overseas travel expenses are shown in Schedule 1 to this Determination. Table 1 of Schedule 1 sets out the cost group to which a country (or part of a country) has been allocated. Table 2 of Schedule 1 sets out the reasonable amount for meal expenses and incidental travel expenses for each cost group for specified employee salary ranges.
Examples - calculation of reasonable daily overseas travel expense amounts
Allowance includes a separate meals and incidentals component
16. An employee travels to Brazil on business for two weeks and is paid a travel allowance of $300 per day ($100 for meals and incidentals and $200 for accommodation). The employee's annual salary is $82,000. The reasonable daily overseas travel allowance expense claim is calculated as follows.
17. Schedule 1 Table 1 lists Brazil as Cost Group 1. Using Table 2, at a salary of $82,000 per year, the reasonable overseas travel allowance amount for meals and incidental expenses for Cost Group 1 (which covers Brazil) is $115 ($90 for three meals and $25 for incidentals).
18. The employee claims a deduction for meals and incidental expenses actually incurred of $110 per day. As the employee is claiming a deduction that is less than the reasonable amount of $115 per day, the employee does not need to keep written evidence to substantiate expenditure on meals and incidental expenses. The employee is required, however, to maintain a travel record and to keep receipts or other documentary evidence to substantiate accommodation expenses.
Allowance without an identified component for meals and incidentals
19. An employee travels overseas on business for four days and is paid a travel allowance of $300 per day for meals, incidentals and accommodation. The employee's annual salary is $33,000. The employee travels to a country in Europe that is not listed in Table 1 of Schedule 1. Cost Group 1 is used for the reasonable overseas travel allowance amount for a country not listed in Table 1 and the reasonable amount is as follows.
21. The travel allowance paid to the employee does not specify an amount for each of the components of the allowance, but it covers meals and incidental expenses. The employee is entitled to claim up to $90 per day for expenses incurred on three meals (that is, food and drink) and incidentals without substantiation provided he has incurred deductible meals and incidental expenses at least equal to $90. Written evidence is required to substantiate any accommodation costs claimed.
Date of Effect
22. This Determination applies to the 2004-05 income year only. However, the Determination will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).
Commissioner of Taxation
23 June 2004
For an explanation of Cost Groups see Table 2 below.
|Country||Cost Group||Country||Cost Group||Country||Cost Group||Country||Cost Group|
|Algeria||2||Cayman Islands||5||Falkland Islands||3||Israel||3|
|Azerbaijan||1||Congo Dem Rep||4||French Guiana||6||Jerusalem||2|
|Brazil||1||East Timor||1||Hong Kong||4||Libya||2|
|Burkina Faso||2||El Salvador||2||India||2||Macau||2|
|Micronesia||2||PNG||1||Solomon Is||1||United Arab Emirates||3|
|Monaco||4||Paraguay||1||South Africa||1||United Kingdom||4|
|Neth. Antilles||3||Reunion||3||Switzerland - Geneva||4||Zambia||1|
|Netherlands||2||Romania||1||Switzerland - elsewhere||3||Zimbabwe||1|
|New Caledonia||4||Russia - Moscow||5||Syria||2|
|New Zealand||2||Russia - elsewhere||3||Taiwan||2|
|Cost Group||Salary $78,750 and below||Salary $78,751 - $140,000||Salary $140,001 and above|
Note: These amounts are determined by the Commissioner solely as the amounts that will be accepted for the exception from the requirement to obtain written evidence for substantiation purposes (see paragraph 33 of TR 2004/6).
Not previously released in draft form.