Taxation Determination

TD 93/174

Income tax: does the receipt of a travel allowance automatically entitle an employee to a deduction for travel expenses under subsection 51(1) of the Income Tax Assessment Act 1936 ?

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FOI status:

may be releasedFOI number: I 1216043

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a 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).

1. No. The mere receipt of an allowance does not entitle an employee to a deduction, whether or not the allowance is received under an industrial award.

2. Some taxpayers and tax agents would appear to be confused as to whether a taxpayer receiving an allowance is automatically entitled to a deduction equal to the amount of the allowance.

3. Taxation Ruling IT 2543 explained at paragraph 7 that "the receipt of an allowance imparts no greater degree of deductibility to an expense which is incurred in relation to that allowance". Therefore, whether a deduction is allowable for travel expenses is a separate question, unrelated to whether a taxpayer receives a travel allowance.

4. Expenses of travelling between home and work are not an allowable deduction unless exceptional circumstances such as those outlined at paragraph 8 of IT 2543 exist.

Examples 1. Sonia, regional manager for a supermarket chain, is required to inspect stores in Bathurst, Orange and Lithgow. For the three day trip she receives a travel allowance. Sonia is not automatically entitled to a deduction equal to the allowance. A deduction for travel costs incurred is allowable, subject to satisfaction of the substantiation requirements.2. Robert, a bank teller, was moved to a branch some distance from his home. He is paid a compensatory allowance for the additional travelling time it now takes him to get to work and home again. Robert is not entitled to a deduction against the allowance.

Commissioner of Taxation

Previously issued as Draft TD 93/D107


ATO references:

ISSN 1038 - 8982

Related Rulings/Determinations:

IT 112,
IT 113,
IT 117,
IT 2122,
IT 2199,
IT 2481,
IT 2487,
IT 2543,
IT 2644,
MT 2027

Subject References:
allowances: allowable deductions

Legislative References:
ITAA 51(1);
ITAA 82KT(1);
ITAA 82KZ(4)

TD 93/174 history
  Date: Version: Change:
You are here 2 September 1993 Original ruling  
  17 August 2011 Consolidated ruling Addendum
  12 July 2017 Consolidated ruling Addendum