FocusOn - Travel expenses
Travel expenses can be claimed as a tax deduction if they relate to earning your income. The types of travel expenses that may be claimed include motor vehicle running expenses where the car is not your own (e.g. rental car); air; bus; train and tram travel; taxi fares; bridge and road tolls; parking and car hire fees. Expenses for meals, accommodation and other incidental related costs may be claimable if incurred for overnight work-related travel. Generally, if your travel did not involve an overnight stay, you cannot claim meals even if you received a travel allowance.
To claim motor vehicle cost for your own car please refer to our FocusOn Motor Vehicle Expenses.
Home to work travel
Travel between home and work is usually considered private travel and is therefore not deductible. The exception to this is where the work duties begin at home and then you travel on to perform other work duties. Travel between work and home is also deductible when the travel is to a workplace that is an alternative to your usual workplace.
For example, travel from home to a work site or to a conference.
Travelling to client's premises
A business trip on the way to or from work may be deductible. This is the case if you perform substantial employment duties at the destination. A lawyer dropping off files at a client's premises on the way home would not be considered substantial duties. However, if the lawyer dropped off files and attended a business meeting at the client's premises, the entire trip from the office to the client's premises to home would be deductible.
Stand-by duties
The trip by an employee on stand-by who travels to work in response to a call would not necessarily be tax deductible. This is because the employee on stand-by does not commence work duties until they arrive at the place of employment. However, the travel would be considered tax deductible if the employee could establish that work duties began when answering the call.
After hours travel
Travel outside your normal working hours is not automatically tax deductible. For example, travelling to school after hours to attend meetings such as parent teacher interviews is not deductible as the work duties are performed when the teacher arrives at the school.
Itinerant travellers
Employees may claim the travel costs between a web of work places. This will apply where taxpayers regularly work at more than one work site during the day and there is no fixed place of work. However, a nurse who travels to several hospitals to relieve staff shortages and remains at one hospital until completion of their shift is not considered an itinerant traveller and no deduction is available.
Travel between two places of employment is deductible as long as the taxpayer does not live at either of the places and the purpose of the travel is to allow the taxpayer to perform income-producing activities. This applies even if one of the workplaces is a home-based business.
Bulky equipment
Taxpayers who transport bulky or heavy equipment may be able to claim the travel costs for home to work travel. This claim can only be made if there is no secure storage area provided for the equipment at the workplace.
Purpose of the trip
Where a trip is undertaken partly for private purposes, the expenses will need to be apportioned. For trips between 1 – 5 nights written evidence must be maintained.
Airfare
If the predominant purpose of the trip was business, and a few days holiday was incidental, then the total airfare would be deductible. The airfare for a spouse is not tax deductible.
Accommodation
Where a spouse accompanies the taxpayer, 50% of accommodation expenses will be allowed. Accommodation expenses during the part of the trip relating to a holiday are not deductible. For example, if you pay accommodation for 10 nights for a one week conference, the expenses for the seven nights of the conference are deductible and the three nights for the holiday are not.
Maintaining a travel diary
Travel for 6 nights or more requires written evidence and the completion of a travel diary, which must be retained for five years. For each trip you must record:
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The exact nature of the activity |
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The day and approximate time it began and how long it lasted (before the activity ends or as soon as possible afterwards) |
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Where you engaged in it |
A travel diary can be obtained from our office if required. Note that only expenses in relation to work-related activities are eligible for tax deductions. The Taxation Office also requires appropriate records to substantiate these deductions. For trips overseas, written evidence of accommodation costs is required regardless of the length of stay or whether you received an overseas allowance.
Reasonable travel allowances
The requirement to keep travel records does not apply where you receive a travel allowance that does not exceed the Commissioner of Taxation's reasonable allowance guidelines. These guidelines are based on public service rates and cover accommodation, food, drink and incidentals (eg laundry, taxi fares, telephone calls etc.) for domestic travel allowances. For overseas travel only food, drink and incidentals are covered. International travellers must still substantiate their accommodation expenses. If you require the reasonable travel allowance rates, please contact us.
Published : July 2011