Taxation Ruling

TR 93/22

Income tax: reasonable allowances for the 1993-94 income year

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FOI status:

may be releasedFOI number: I 1013816

contents para
What this Ruling is about
1
Ruling
3
A. Overtime meal allowances
B. Domestic travel allowances
Employees with annual salaries up to $102399
Daily travel allowances
Part-day travel allowances
Employees with annual salaries above $102399
C. Unvouched travel expenses for long distance truck drivers
Employee long distance truck drivers who receive travel allowances
Employee long distance truck drivers who do not receive travel allowances
Owner-drivers
D. Reasonable overseas travel allowances
Date of effect
22
Explanations
23
Examples
25

Preamble

This Ruling, 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 Ruling is a public ruling and how it is binding on the Commissioner.

What this Ruling is about

1. Subsections 82KZ(4) and (5) of the Income Tax Assessment Act 1936 provide that the substantiation requirements relating to overtime meal expenses, domestic travel expenses and overseas travel expenses do not apply where the taxpayer has received an allowance in respect of those expenses (whether or not the allowances, except in the case of the overtime meal allowance, were paid under an industrial instrument) and the Commissioner of Taxation considers the allowance to be reasonable.

2. This Ruling sets out the amounts which the Commissioner considers to be reasonable, for the purposes of subsections 82KZ(4) and (5), in relation to:

(a)
overtime meal allowances;
(b)
domestic travel allowances;
(c)
travel expenses for long distance truck drivers; and
(d)
overseas travel allowances.

Ruling

A. Overtime meal allowances

3. Overtime meal allowances up to an amount of $15 per meal are considered to be reasonable for the 1993-94 income year.

B. Domestic travel allowances

Employees with annual salaries up to $102399

Daily travel allowances

4. Daily travel allowances (ie those requiring an overnight stay) that do not exceed the rates of daily travel allowances set for members of the Australian Public Service (APS) by more than five dollars are considered to be reasonable for the 1993-94 income year. APS daily travel allowances are payable according to salary level and are as follows for the 1993-94 income year:

(a) if an employee's annual salary is in the range $61147 and $102399
Place Accomm $ Food and Drink $ Incidentals $ Total $
Sydney 116 62.35 15.25 193.60
Melbourne 124 62.35 15.25 201.60
Brisbane 99 62.35 15.25 176.60
Canberra 84 62.35 15.25 161.60
Adelaide 85 62.35 15.25 162.60
Darwin 88 62.35 15.25 165.60
Hobart 87 62.35 15.25 164.60
Perth 97 62.35 15.25 174.60
High cost of country centres see note (a) below 62.35 15.25 see note (a) below
Tier 2 country centres (see note (b) below) 70 49.65 15.25 134.90
Other country centres 54 49.65 15.25 118.90
(b) if an employee's annual salary is below $61147
Sydney 87 52.25 10.75 150.00
Melbourne 93 52.25 10.75 156.00
Brisbane 74 52.25 10.75 137.00
Canberra 63 52.25 10.75 126.00
Adelaide 64 52.25 10.75 127.00
Darwin 66 52.25 10.75 129.00
Hobart 65 52.25 10.75 128.00
Perth 73 52.25 10.75 136.00
High cost country centres see note (a) below 52.25 10.75 see note (a) below
Tier 2 country centres (see note (b) below) 58 45.40 10.75 114.15
Other country centres 45 45.40 10.75 101.15

Notes:
(a)
High cost country centres accommodation expenses are listed in paragraph 5 of this Ruling.
(b)
Tier 2 country centres are listed in paragraph 6 of this Ruling.

5. High cost country centres - accommodation expenses:

Country centre $ Country centre $
Broome 99 Norfolk Island 87
Dampier 70 Paraburdoo 65
Hall's Creek 80 Pt Hedland 69
Jabiru 81 Tom Price 65
Karratha 88 Weipa 85
Kununurra 70 Wickham 63
Newman 90 Wilpena 74
Nhulunbuy 89.50 Yulara 167.50

6. Tier 2 country centres

Country centre Country centre
Burnie Gosford
Cairns Kalgoorlie
Derby Maitland
Exmouth

Part-day travel allowances

7. In certain circumstances, APS employees receive an allowance in respect of travel which necessitates their being absent from their workplace on official business for not less than 10 hours but which does not require an overnight absence. APS travel allowances for part-day travel are:

annual salary range allowance
$61147 - $102399 $39
below $61147 $29

8. These allowances are considered to be reasonable for the 1993-94 income year.

Employees with annual salaries above $102399

9. For employees who receive an annual salary of more than $102399, daily travel allowances set on an independent annual review by the Remuneration Tribunal are considered to be reasonable. For the 1993-94 income year, those rates are:

salary range overnight part-day
capital city other
$102399 - $191550 $300 $155 $45

C. Unvouched travel expenses for long distance truck drivers

Employee long distance truck drivers who receive travel allowances

10. Amounts up to the food and drink component of the APS daily travel allowance payable in respect of 'other country centres' are considered to be reasonable. For the 1993-94 income year, the relevant amounts are:

(a)
salary up to $61147 - $45.40
(b)
salary above $61147 - $49.65

11. If the employee claims as a deduction an amount which is greater than the amount considered to be reasonable, the deduction will only be allowed if the full amount of the expense is substantiated.

12. If the employee receives an allowance which is less than the 'reasonable rates', a deduction up to the amount of the allowance received may be claimed without the need for substantiation.

Accommodation expenses

13. An employee truck driver is entitled to a deduction for expenditure on accommodation whilst away from home if he or she is able to substantiate that expenditure.

Employee long distance truck drivers who do not receive travel allowances

14. Any claim made by an employee who does not receive any allowance must be substantiated. If, however, it is impracticable for a taxpayer to obtain receipts for various small amounts spent on food and drink, it is sufficient substantiation if:

(a)
particulars of the amounts are evidenced in a diary or similar record; and
(b)
the total expenditure claimed for food and drink, including any amounts covered by receipts, does not exceed the 'reasonable rates' set out in paragraph 10 of this Ruling (i.e., $45.40 for salaries up to $61147 and $49.65 for salaries above $61147).

Claims that exceed those rates must be substantiated in full.

Owner-drivers

15. As owner-drivers do not receive any allowance, they are generally required to comply with the substantiation requirements of the law. Under subsections 82KZ(2) and (3), if a taxpayer incurs expenses in respect of extended domestic travel expenses (ie the taxpayer is away from home for more than five nights) a diary or similar document of the business activities that took place during the course of travel must be kept in addition to other receipts. Notwithstanding this, we recognise that it is sometimes impracticable for an owner-driver to obtain receipts for various small amounts spent on food and drink. In those cases, it is sufficient substantiation if particulars of the amounts are evidenced in a diary or similar record and the total expenditure claimed for food and drink (including any amounts covered by receipts) does not exceed $49.65 per day.

D. Reasonable overseas travel allowances

16. If the food, drink and incidentals component of an overseas travel allowance does not exceed the rates of overseas travel allowance paid to members of the APS and public office holders for short term travel, that component of the overseas travel allowance will be treated as reasonable. Taxpayers must still retain documentary evidence of accommodation expenses and maintain a travel diary. Guidelines on travel diary requirements are contained in MT 2038.

17. The relevant APS rates are detailed in the APS 'Personnel Management Manual, Volume 9 Schedule 2/C/A' [this schedule is updated in a microfiche format on a fortnightly basis and is available on an annual subscription basis from the Australian Government Publishing Service, GPO Box 84, CANBERRA ACT 2601, ph (06) 295 4411]. Schedule 2/C/A comprises 3 parts: A, B and C which deal with overseas travel allowances paid to Secretaries of Departments, Senior Executive Service officers and other officers respectively. The rates of travel allowances payable as at 3 June 1993 are set out in schedule 1 to this Ruling according to the salary ranges of these three levels of employees. Therefore, schedule 1 contains the Meal and Incidental Allowance rates as follows:-

Column 1 - Applicable to Secretaries of Departments and to employees whose salary exceeds $102399 per annum.
Column 2 - Applicable to Senior Executive Service officers and to employees whose salary is in the range $61147 per annum to $102399 per annum.
Column 3 - Applicable to other officers and to employees whose salary is less than $61147 per annum.

18. If an employee travels to a location for which the rate of overseas travel allowance paid to members of the APS and public office holders does not contain a component for food and drink (meals), a reasonable amount for meals may be added to the incidentals component payable to that employee. For the purposes of this Ruling, a reasonable amount for meals that may be added to the incidentals component of an overseas travel allowance rate, is an amount not exceeding by more than $5 (Australian) the amount of the meals component of the travel allowance paid to members of the APS and public office holders depending on their salary and status, for travel within Australia. The current meals components of the domestic travel allowances paid to these employees are as follows :

.
Secretaries of Departments $63 per day (salary in excess of $102399 per annum)
.
Senior Executive Service officers $62.35 per day (salary in range $61147 to $102399 per annum)
.
Other officers $52.25 per day (salary less than $61147 per annum)

19. The requirement to add a reasonable meal component to the rate of overseas travel allowance at present will only apply if the employee travels to:

(a)
'Sudan'; or
(b)
'other countries' (i.e., a location not specifically described in the Schedule attached to this Ruling).

20. A deduction in excess of the reasonable meal and incidentals allowance, and substantiated accommodation expenses will not be allowable unless the employee obtains and keeps adequate receipts or other documentary evidence to substantiate all expenditure claimed against the allowance received.

21. Whilst the rates of overseas allowances payable to members of the APS and public office holders are considered reasonable and will cover most cases, there may be cases where higher rates of allowance can be accepted as reasonable.

Date of effect

22. This Ruling applies for allowances paid during the 1993-94 income year.

Explanations

The requirement to substantiate

23. Under sections 82KZ and 82KZA, an income tax deduction is not allowable in respect of an 'eligible expense' in relation to a meal allowance, travel allowance, 'employment-related expense' or a travel expense unless documentary evidence of the expense has been obtained and retained by the taxpayer. Broadly speaking, documentary evidence of an expense is a receipt, invoice or similar document that sets out the particulars outlined in section 82KU. Where expenses are incurred in respect of overseas travel expenses or extended domestic travel expenses, a further condition of deduction is that a diary or similar document be kept of the business activities that took place during the course of travel (subsections 82KZ(2) and (3)).

'Reasonable' allowances

24. As a general principle, an allowance will be treated as reasonable if the rate of the allowance has been set by reference to a survey of actual costs in a range of establishments where meals or accommodation can be obtained. That is, the allowance should be set so as to fairly compensate an employee for the average cost of a meal or accommodation, on the basis that when the expense is incurred, the employee would be neither out of pocket nor able to retain appreciable amounts of unspent allowance.

Examples

Calculation of reasonable daily overseas travel allowance

(a) allowance containing a meals component

25. An employee travels to Italy on business 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 $65000 and, at the time of travel, the exchange rate is 999 lira equals one Australian dollar ($A1). The reasonable daily overseas travel allowance is calculated as follows:

(1)
At a salary of $65000 p.a. the daily meals and incidentals allowance payable for Italy is 135298 lira.
(2)
Converting the lira allowance to Australian dollars at the exchange rate prevailing at the time of travel provides the reasonable daily overseas travel allowance

(135298 / 999) = $A135.43

As the employee is receiving a meal and incidentals allowance of $100 per day which is less than the reasonable amount of $135.43 per day, the employee does not need to substantiate expenditure on meals and incidental expenses. The employee is required, however, to maintain a travel diary and to keep receipts or other documentary evidence to substantiate accommodation expenses.

(b) allowance without a meals component

26. An employee travels to the Sudan on business and is paid a travel allowance of $300 per day to pay for meals, incidentals and accommodation. The employee's annual salary is $33000 and the exchange rate at the time of travel is .4389 pounds equals $A1. The reasonable daily overseas travel allowance is calculated as follows:

(1)
At a salary of $33000 p.a. the incidentals allowance payable for the Sudan is 34.5 pounds. (There is no meals component).
(2)
Convert the incidental allowance to Australian dollars at the exchange rate prevailing at the time of travel:

(34.5 / .4389) = $A78.60

(3)
Add to this the relevant meals component amount (described at paragraph 18): $52.25
(4)
The resulting total of $130.85 is the reasonable daily travel allowance for the Sudan at the time of travel.

As the travel allowance paid to the employee does not specify the components of the allowance, the employee is entitled to claim not more than $A130.85 per day for meals (i.e., food and drink) and is required to substantiate any accommodation costs claimed against the allowance.

Commissioner of Taxation
15 July 1993

SCHEDULE 1

Meal and Incidental Allowances

Column 1 = Applicable to Secretaries of Departments and to employees whose salary exceeds $102399 per annum.
Column 2 = Applicable to Senior Executive Service officers and to employees whose salary is in the range $61147 to $102399 per annum.
Column 3 = Applicable to other officers and to employees whose salary is less than $61147 per annum.

Country/city Column 1 Column 2 Column 3 Currency
ALGERIA 892 671 610 Dinar
ARGENTINA 116.10 87.30 79.30 US$
AUSTRIA 1804 1356 1233 Schill
BAHRAIN 46.30 34.80 31.60 Dinar
BANGLADESH 3264 2454 2231 Taka
BELGIUM 4337 3261 2965 BF
BOLIVIA 58.20 43.80 39.80 US$
BRAZIL (note a) (Rio de Janeiro) 107.10 80.50 73.20 US$
BRAZIL (note a) (elsewhere) 61 46 42 US$
BRUNEI 182 137 125 B$
BULGARIA (note a) 67.60 50.80 46.20 US$
CAMBODIA (note a) 87.20 65.60 59.60 US$
CANADA 131.50 98.90 89.90 C$
CHILE 104.30 78.40 71.30 US$
CHINA (mainland) 505.20 379.90 345.40 Yuan
CHINA (elsewhere) 3563 2679 2435 NT$
COLOMBIA 96.50 72.60 66 US$
COOK ISLANDS 134.90 101.50 92.20 $NZ
CYPRUS 63.40 47.70 43.40 Pound
CZECHOSLOVAKIA 2598 1953 1775 Kcs(tourist)
DENMARK 1010.90 760.10 691 Krone
ECUADOR 103.70 78 70.90 US$
EGYPT 168 126.30 114.80 LE
ETHIOPIA 219.60 165.10 150.10 Birr
FIJI 113.50 85.40 77.70 F$
FINLAND 794.50 597.40 543.10 Markka
FRANCE 1020.40 767.20 697.40 Franc
FRENCH POLYNESIA 16527 12427 11297 CFP Fr
GERMANY (note a) 178 134 122 DM
GHANA 67.20 50.40 47.90 US$
GREECE 33967 25539 23217 Drachma
HONG KONG 1148 863 785 HK$
HUNGARY (note a) 5453 4100 3727 Forint
ICELAND 11115 8357 7597 Kronur
INDIA(New Delhi) 1462 1099 999 Rupee
INDIA (elsewhere) 1207 907 824 Rupee
INDONESIA (Galang) 124.90 93.90 85.40 S$
INDONESIA (Jakarta) 258466 194335 176668 Rupiah
INDONESIA (elsewhere) 210182 158032 143665 Rupiah
IRAN 43659 32826 29842 Rial
IRAQ 47 35 32 Dinar
IRELAND 55.60 41.80 38 Punt
ISRAEL 133 100 90.90 US$
ITALY 179946 135298 122998 Lira
JAMAICA 105.60 79.40 72.20 US$
JAPAN 22131 16640 15127 Yen
JORDAN 65.10 48.90 44.40 Dinar
KENYA 1591 1196 1087 Shill
KIRIBATI 58.90 44.30 40.20 $A
KOREA, Republic of 103378 77728 70662 Won
KUWAIT 64.80 48.70 44.30 Dinar
LAOS 63 47.30 43 US$
LATVIA (note a) 79.30 59.60 54.20 US$
LESOTHO 133.40 100.30 91.20 Rand
LUXEMBOURG 4813 3619 3290 LF
MALAYSIA (Bidong) 83.30 62.68 58.88 M$
MALAYSIA (Kuala Lumpur) 260.90 196.20 178.30 M$
MALAYSIA (elsewhere) 251.10 188.80 171.60 M$
MALTA 33.70 25.40 23.10 Lira
MARSHALL ISLANDS 71.70 53.90 49 US$
MAURITIUS (note a) 1331 1001 910 Rupee
MEXICO 96.40 72.50 65.90 US$
MICRONESIA 78.10 58.70 53.30 US$
MOZAMBIQUE 77.30 58.10 52.80 US$
MYANMAR 86.30 64.90 59 US$
NAMIBIA 223.90 168.30 153 Rand
NAURU 55.70 41.90 38.10 $A
NEPAL 1446 1087 988 Rupee
NETHERLANDS (note a) 206.50 155.30 141.20 Guilder
NEW CALEDONIA 13510 10158 9234 CFP Fr
NEW ZEALAND 160.70 120.80 109.80 $NZ
NIGERIA 694 522 475 Naira
NORWAY (note a) 961.30 722.80 657.10 Kroner
OMAN 51.30 38.50 35 Rial
PAKISTAN 1476 1110 1009 Rupee
PALAU 117.90 88.60 80.60 US$
PAPUA NEW GUINEA 113.20 85.10 77.30 Kina
PARAGUAY 56.90 42.80 38.90 US$
PERU 117.70 88.50 80.40 US$
PHILIPPINES 3076 2313 2103 Peso
POLAND (note a) 52 39 35 US$
PORTUGAL 15807 11885 10814 Escudo
QATAR 429.60 323 293.60 Riyal
ROMANIA (note a) 42 31 28 US$
RUSSIA (note a, c) 120 90.20 82 US$
SAUDI ARABIA (Riyadh) 457.80 344.20 312.90 Riyal
SAUDI ARABIA (elsewhere) 409 308 280 Riyal
SINGAPORE 209.90 157.80 143.50 S$
SOLOMON ISLANDS 156.90 117.90 107.20 SI$
SOUTH AFRICA 196.50 147.70 134.30 Rand
SPAIN 18053 13574 12340 Peseta
SRI LANKA 3200 2406 2187 Rupee
SUDAN 50.67 38 34.50 Pound
SWAZILAND 172.80 129.90 118.10 Rand
SWEDEN (note a) 926 696 633 Krona
SWITZERLAND 267.10 200.80 182.50 Franc
SYRIA 4323 3251 2955 Pound
TANZANIA 12475 9380 8527 Shill
THAILAND 2954 2221 2019 Baht
TONGA 75 56 50 Pa'anga
TUNISIA 86.80 65.30 59.30 Dinar
TURKEY 139.40 104.80 95.20 US$
UGANDA 81875 61560 55964 USH
UNITED ARAB EMIRATES (note a) 433.30 325.80 296.20 Dirham
UNITED KINGDOM 85.30 64.10 58.30 Pound
USA (note b)
Chicago 120.90 90.90 82.70 US$
USA
Guam 143.20 107.70 97.90 US$
USA (note b)
Honolulu 128.40 96.60 87.80 US$
USA (note b)
Houston 100.40 75.50 68.60 US$
USA (note b)
Los Angeles 124 93 84 US$
USA (note b)
Miami 84.25 63.18 58.22 US$
USA (note b)
New York 161.60 121.50 110.40 US$
USA (note b)
St Louis 104.80 78.80 71.70 US$
USA (note b)
San Francisco 119.30 89.70 81.50 US$
USA (note b)
Stratford 103 77 70 US$
USA (note b)
Washington D.C. 114.50 86.10 78.30 US$
URUGUAY 63.70 47.90 43.50 US$
VANUATU 11773 8852 8047 Vatu
VENEZUELA 81.80 61.50 55.90 US$
VIETNAM 107.60 80.90 73.50 US$
(Hanoi City)
VIETNAM (elsewhere) 67.40 50.70 46.10 US$
WESTERN SAMOA 184.20 130.50 125.90 Tala
YUGOSLAVIA (note a) 73.20 55 50 US$
ZAMBIA 65 49 44 US$
ZIMBABWE (note a) 163.90 123.20 112 Z$
OTHER COUNTRIES 36 27 24.50 $A

Notes:
(a)
The cost of accommodation at this locality includes breakfast. The amount specified for meals is for lunch and dinner only.
(b)
Rates of Allowance to be Applied Outside Listed Cities of The United States of America
(c)
The meal rates do not include tax. If officers are required to pay tax on their meals this may be reimbursed.

State to which employee is travelling Apply rate of allowance as for
Alabama, Arkansas, Delaware, District of Columbia, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia. Washington (D.C.)
New York State. New York
Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont. Stratford
Missouri. St Louis
Alaska, Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, Wisconsin. Chicago
California (North of 36th Parallel), Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming. San Francisco
California,(South of 36th Parallel). Los Angeles
Florida. Miami
Arizona, New Mexico, Oklahoma, Texas. Houston
Hawaii. Honolulu

References

ATO references:
NO 93/3962-1

ISSN 1039 - 0731

Related Rulings/Determinations:

IT 2686

Subject References:
- domestic travel allowances
- long distance truck drivers
- overseas travel allowances
- overtime meal allowances
- reasonable allowances
- travel expenses

Legislative References:
- ITAA 82KZ

TR 93/22 history
  Date: Version: Change:
You are here 15 July 1993 Original ruling  
  12 July 1995 Withdrawn