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Edited version of private ruling

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Ruling

Subject: overtime meal allowance expenses

1. Is an overtime meal allowance of $4.50 per meal paid by your employer a reasonable or bona fide allowance?

No.

2. Are you able to claim a deduction equal to the reasonable overtime meal allowance expense amount as determined by the Commissioner without substantiation?

No.

Relevant facts and circumstances

You are an employee. At various times you work overtime and your employer pays you an overtime meal allowance of $4.50 per meal.

When working overtime, you have purchased meals. You spend an average of $20 per meal.

The overtime meal allowance that you received from your employer was paid under a workplace agreement negotiated between the union and your employer.

Reasons for decision

A bona fide overtime meal allowance paid by an employer is an amount that could reasonably be expected to cover the approximate costs of overtime meals. A token amount is not a bona fide overtime meal allowance (paragraph 87 of Taxation Ruling TR 2004/6.

For the 2008-09 income year the Commissioner determined that overtime meal allowance expenses were $23.60 per meal as set out in Taxation Determination TD 2008/18.

It is not considered that $4.50 is a reasonable amount to cover your overtime meal costs. It therefore follows that an overtime meal allowance of $4.50 per meal is not considered to be a reasonable or bona fide overtime meal allowance.

Under Subdivision 900-B Income Tax Assessment Act 1997 (ITAA 1997) a deduction is not allowable for a work expense, including a meal allowance expense, unless the expense qualifies as a deduction under a provision of the Act and written evidence of the expense has been obtained and retained by the employee taxpayer.

Section 900-60 of the ITAA 1997 provides an exception to the substantiation rules in that it allows you to deduct a meal allowance expense without getting written evidence if:

An 'industrial instrument' is defined in section 995-1 of the ITAA 1997 as:

An industrial instrument includes, an agreement which has been certified by a State or the Australian Industrial Relations Commission; an Australian Workplace Agreement (AWA) made under the Workplace Relations Act 1996 (WRA), and individual workplace agreements, similar to an AWA made under State industrial legislation.

Section 8 of the WRA defines a workplace agreement to be:

The meal allowance negotiated with your employer under a workplace agreement is payable under an industrial instrument for meals consumed during periods when you worked overtime but as it is not considered to be a bona fide meal allowance the substantiation exception provided in section 900-60 of the ITAA 1997 does not apply in this instance.

Therefore, in order to claim a deduction for overtime meal expenses you must obtain and retain written evidence of the costs incurred. You cannot claim the reasonable amount determined by the Commissioner in TD 2008/18 or any other amount without substantiation.

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