The ATO’s reasonable travel allowances are not required to be declared as income, and are excluded from the expense substantiation requirements.
Reasonable amounts are determined by the Tax Office each year and released in updated Tax Determinations which are set out below, each of which include per diem rate schedules.
For the 2017-18 income year the reasonable amount for overtime meal allowance expenses is $30.05.
This determination contains ATO reasonable allowances for:
- overtime meals
- domestic travel
- employee truck drivers
- overseas travel
2017-18 Addendum: ATO reinstates the meal-by-meal approach for truck drivers’ travel expense claims
On 27 October 2017 the ATO announced the reinstatement of the meal-by-meal approach for truck drivers who claim domestic travel expenses for meals. The following new reasonable amounts have now been included in an updated version of the current ruling (see on page 7)：
- $24.25 for breakfast
- $27.65 for lunch
- $47.70 for dinner.
The amount for each meal is separate and can’t be combined into a single daily amount or moved from one meal to another.
See: ATO media release
An addendum was issued modifying paragraphs 23 to 30 of determination TD 2017/19 setting out the new reasonable amounts, and consolidated into TD 2017/19 as linked above. For reference purposes, the first-released version of TD 2017/19 issued 3 July 2017 is linked here.
For the 2016-17 income year the reasonable amount for overtime meal allowance expenses is $29.40.
Taxation Ruling TR 2004/6 explains the the way in which the expenses can be claimed within the substantiation rules, including the requirement to obtain written evidence and exemptions to that requirement.
Allowances which are ‘reasonable’, i.e. comply with the Reasonable Allowance determination amounts and with TR 2004/6 are not required to be declared as income and are excluded from the expense substantiation requirements.
These substantiation relaxations only apply to employees. Non-employees must fully substantiate their travel expense claims. Expenses for non-working accompanying spouses are excluded.
To be claimable as a tax deduction, and to be excluded from the expense substantiation requirements, travel and overtime meal allowances must:
- be for work-related purposes; and
- be supported by payments connected to the relevant expense
- For travel allowance expenses, the employee must sleep away from home
- If the amount claimed is more than the ‘reasonable’ amount set out in the Tax Determination, then the whole claim must be substantiated
- Employees can be required to verify the facts relied upon to claim a tax deduction and/or the exclusion from the substantiation requirements
- An allowance conforming to the guidelines doesn’t need to be declared as income or claimed in the employee’s tax return, unless it has been itemised on the statement of earnings
- Claims which don’t match the amount of the allowance need to be declared.
Amounts of genuine reasonable allowances provided to employees are not required to be subjected to tax withholdings or itemised on an employee’s statement of earnings. See more here
This page was last modified on 27 October 2017