Claiming Work-Related Travel Expenses on Tax

If you’ve never claimed work-related travel expenses on your tax return, the process might seem confusing. Can you really claim things like transport or meals? What about accommodation? Don’t worry—this guide from the tax experts at Shoebox Books & Tax breaks it all down for you. Here, we make it easy to understand what you can claim and how to do it.

What does work related travel expenses mean?

Work-related travel expenses refer to the costs incurred while travelling for work purposes. These expenses must be directly related to your job and necessary for performing your work duties. For example, travelling between two separate workplaces or attending a meeting at a different location can be considered work-related travel.

Who’s eligible to claim a travel tax deduction?

All employees—whether casual, part-time, or full-time—may be eligible to claim work-related travel expenses on their tax return, as long as they meet specific criteria. Eligibility depends more on the nature of the work and expenses, rather than your employment type.

What Tax can I claim a deduction on work related travel expenses?

Work related expenses are categorised into a few different expenses. Things such as travel or accommodation costs, and incidental expenses like meals, road tolls, or work related parking expenses fall under the travel expense category. However, travelling from your everyday place of residence to your regular workplace typically does not qualify as a deductible expense. The Australian Taxation Office (ATO) has clear guidelines on what constitutes work-related travel to help make sure you claim correctly. Let’s dive into the specifics:

What You Can Claim:

The ATO allows you to claim a tax deduction on various travel-related expenses, provided they meet the tax deductible criteria. Here are the common work-related expenses you can claim travel deductions on:

1. Transport expenses: Public transport, taxis, and motor vehicle expenses when travelling between work sites.
2. Accommodation costs: If your work requires you to stay overnight away from home, you can claim these costs.
3. Meal expenses: Reasonable amounts spent on meals during overnight stays for work are deductible.
4. Car parking: Parking fees incurred during work-related travel.
5. Road tolls: Costs associated with toll roads used during work travel.
6. Longer Trips: You can claim deductions for trips that last more than six nights, provided you keep detailed records in a travel diary.

What You Can’t Claim:

While there are many expenses you can claim, many are not eligible for deductions. Here are some examples of travel expenses you can’t claim:

1. Everyday travel: Commuting from your home to your regular workplace.
2. Private expenses: Costs incurred for personal reasons during a work trip, such as toothpaste, Alcohol & more.
3. Unsubstantiated claims: Expenses without written evidence or receipts.
4. Excessive claims: Costs beyond what is deemed reasonable by the ATO.

Are you a business owner wondering what other expenses you can claim a tax deduction on? Read our previous article on how to make sure you claim all possible business expenses.

What is a travel allowance from your employer?

A travel allowance is an amount paid by an employer to cover work-related travel expenses. It may include costs for transport, meals, and accommodation. Depending on the type of allowance and how it is used, it could be considered taxable income. Ensure that you understand whether the entire allowance or a portion of it must be declared when completing your income tax return.

What is the ATO rate for travel allowance?

The ATO publishes annual guidelines on reasonable travel allowance rates. These rates specify what is considered a reasonable amount for accommodation, meals, and incidental expenses for domestic and overseas travel. The allowance rates vary depending on each employee’s location, duration and nature of a work trip.

Do you need receipts for travel expenses?

In most cases, you need to keep documentary evidence, such as receipts, to claim travel expenses. However, there are exceptions under the substantiation rules, such as when your claims align with the ATO’s reasonable amounts. If your work-related travel involves carrying bulky tools or working in an alternative workplace, keeping detailed records is essential to validate your claims.

Always consult the latest ATO guidelines for accurate information.

Example Situation: Tax Tips for Travel Expenses

Let’s now look at an example to clarify work-related travel deductions:

Meet Jane, a consultant who frequently travels for work. Her role requires her to visit multiple cities for client meetings, often involving overnight stays. Jane is diligent about keeping her travel records and receipts, knowing they are essential for claiming work-related travel expenses at tax time.

On a recent work trip, Jane stayed in Sydney for three nights to attend a business conference. She incurred several expenses, including:

• Transport costs: Flights to and from Sydney, plus an Uber to the conference venue.
• Accommodation costs: Hotel bookings for three nights.
• Meal expenses: Dinner at a restaurant with a glass of wine.

Jane wondered whether she could claim the wine she had with her meal as part of her tax deduction. Here’s how the rules apply:

• The primary purpose of the expense must be directly related to her work. Since the meal was consumed during the business trip, it can be partially deductible.
• However, the wine is considered a personal expense. The Australian Taxation Office (ATO) does not allow deductions for alcohol, as it is not deemed necessary or incidental to work duties.
• Jane can only claim the reasonable cost of the meal itself, excluding any alcoholic beverages.

Jane makes sure to separate her receipts to distinguish the work-related meal cost from the wine expense. Keeping detailed records and receipts ensures that her claim complies with ATO guidelines.

Key Tip: When claiming travel expenses, always check what constitutes a “reasonable amount” and keep documentation that clearly separates deductible work-related costs from personal expenditures.

Get Help from the Tax Experts

Claiming work-related travel expenses can be complex, especially when navigating terms like travel allowance, reasonable amounts, and substantiation exceptions. By consulting the professional tax services of Shoebox Books and Tax, you can ensure your claims are accurate and compliant with ATO guidelines.

Our team of tax experts is here to help you maximise your deductions and minimise your taxable income. Contact us today to make tax time stress-free and secure the tax refund you deserve.