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Claiming against your Travel Allowance

by Alex in Blog

A travel allowance is a payment made to employees to cover accommodation, food, drink, or incidental expenses they incur when they travel away from home overnight, in the course of their duties.

The ATO recently announced that it has noticed an increasing disparity between travel allowances paid and deductions claimed for accommodation, meals,
and incidentals.

They state that this has increased the incidence of it checking these claims, which has highlighted deficiencies and difficulties for employees in showing the amount claimed was incurred, or was incurred in gaining or producing their assessable income.

In most circumstances, when claiming deductions, you need to substantiate the expense claimed with documentary evidence, and produce that evidence should the ATO request it.

For now, you can claim a deduction for travel expenses incurred, without meeting the substantiation rules, provided:
• The claim for deduction does not exceed the amount of the travel allowance received
• The travel allowance does not exceed an amount that the ATO considers “reasonable”.

So, what can you claim against this allowance?
The ATO publishes guidelines each year on what it considers reasonable amounts for a travelling employee (we can show you these estimates if you are interested).

These guidelines give a reasonable daily travel allowance amount and consider the following factors:
• destination of travel (broken down into metropolitan cities, country centres within Australia and international countries)
• accommodation
• meals
• other incidentals
• employee annual salary (in ranges)
• Specific rates for truck drivers.

If you have any questions regarding travel allowance claims, please give us a call on 4642 1530.

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