Edited version of your written advice

Authorisation Number: 1051216889347

Date of advice: 21 April 2017

Ruling

Subject: Overtime Meal Expenses

Question

Can you claim a deduction for overtime meals expenses incurred up to $28.20 (per meal) whilst being paid an overtime meal allowance of approximately $xx (per meal)?

Answer

Yes

This ruling applies for the following period(s)

Year ended 30 June 20xx

The scheme commences on

1 July 20xx

Relevant facts and circumstances

The ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You are paid a wage under the Enterprise Bargaining Agreement (EBA) for company and the overtime meal allowance you receive is part of the EBA.

As per the EBA, the overtime meal allowance is only paid if you have worked overtime.

The overtime meal allowance does appear on the payslip.

The overtime meal allowance does not appear on the Payment Summary.

The amount is included in the Gross Income on your payment summary.

The overtime meal allowance paid is approximately $xx and is always less than the Commissioner's rate which is $28.20 in the 2014/15 Financial Year.

You spend up to $28.20 on your overtime meals.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 15-2

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Section 900-60

Reasons for decision

These reasons for decision accompany the Notice of Private Ruling.

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Summary

You are entitled to claim a deduction for overtime meals whilst being paid an overtime meal allowance.

The deduction is necessarily incurred in gaining or producing your assessable income.

Your assessable income includes the value of allowances.

For the 201xx income year the Commissioner's reasonable amount for overtime meal allowance expenses is $28.20.

Detailed reasoning

Under section 15-2 of the Income Tax Assessment Act 1997 (ITAA 1997) your assessable income includes the value to you of all allowances, gratuities, compensations, benefits, bonuses and premiums provided to you in respect of or in relation directly or indirectly to, any employment of or services rendered by you.

Section 8-1 of the ITAA 1997 states you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income; or it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income. However, you cannot deduct a loss or outgoing under this section to the extent that it is a loss or outgoing of capital, or of a capital nature; or it is a loss or outgoing of a private or domestic nature.

Please note to be entitled to claim a deduction for your work related overtime meal expenses, in addition to including the allowance as assessable income, the expense must be actually incurred and the relevant records kept. Where the exception from substantiation applies, you may still be required to show the basis for determining the amount of your claim and that the expense was actually incurred for work related purposes

Section 900-60 of the ITAA 1997 states you can deduct a meal allowance expense without getting written evidence if the allowance is to enable you to buy food or drink in connection with overtime that you work; and the allowance is paid or payable to you under an industrial instrument; and the Commissioner considers reasonable the total of the losses or outgoings you claim that are covered by the allowance.

Tax Determination TD 2014/19 sets out the amounts that the Commissioner considers are reasonable (reasonable amounts) for the substantiation exception in Subdivision 900-B of the ITAA 1997 for the 201xx income year in relation to claims made for overtime meal allowance expenses - for food and drink in connection with overtime worked and where a meal allowance has been paid under an industrial instrument.

For the 20xx income year the Commissioner's reasonable amount for overtime meal allowance expenses is $28.20.

Expenses claimed must have been incurred and be an allowable deduction - The payment of an allowance does not of itself allow a deduction to be claimed. Before a deduction can be claimed - the expenses claimed cannot exceed the amount actually incurred and the expenses must be incurred for work-related purposes and be deductible under the income tax law.

TD 2014/19 should be read together with Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses which explains the substantiation exception and the way in which these expenses are able to be claimed.

Paragraph 41 of TR 2004/6 states only the actual amount incurred on work-related travel expenses or overtime meal allowance expenses can be claimed as a deduction

Paragraph 16 of TR 2004/6 states where a taxpayer receives a bona fide travel allowance or a bona fide overtime meal allowance and incurs deductible expenses in relation to it, where the deduction claimed is more than the reasonable amount; the whole claim must be substantiated with written evidence, not just the excess over the reasonable amount.

In your case, you have incurred expenses for your meals while working overtime. You are entitled to a deduction for the amount you have incurred for these meals up to $28.20.

ATO view documents

Taxation Determination 2014/19

Taxation Ruling 2004/6

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).