An overtime meals allowance itemised on your annual payment summary, identified separately (and in addition to) your gross wages should be declared as income in your tax return. Award overtime allowances are not required to taxed or reported on PAYG summaries.
If you have worked overtime, and subject to the following conditions, it may be claimable as a tax deduction.
Reasonable Overtime Meal Allowances as determined by the Commissioner of Taxation (updated annually) are:
- for 2018-19 $30.60 per meal; The meal-by-meal amounts for employee long distance truck drivers are $24.70, $28.15 and $48.60 per day for breakfast, lunch and dinner respectively.
- for 2017-18 $30.05 per meal; The meal-by-meal amounts for employee long distance truck drivers are are $24.25 for breakfast, $27.65 for lunch and $47.70 for dinner
- for 2016-17 $29.40 per meal
If you work overtime, you can claim a deduction for overtime meal expenses (food and drink) if..
- you purchased a meal when you worked overtime and
- you received an overtime meal allowance under an industrial award for working overtime.
Claiming a tax deduction for meals
Where the tax deduction claimed is no more than the reasonable allowance amount, written evidence is not required in support of the claim. However, you could still be required to demonstrate the genuine basis of the claim, by showing how it was worked out, and the work circumstances.
If you have received an overtime meals allowance which is not shown on your payment summary, it does not have to be declared as income in your tax return providing..
- you have spent all the allowance on deductible expenses and
- you do not make any claim for the expenses in your tax return.
Claims for more than the allowance
Claims which are for more than the reasonable amount, must be fully substantiated – supported by written evidence.
If an amount for overtime meals has been paid to you as an unspecified part of your normal salary or wages, it is not considered to be an overtime meal allowance. (In that case, it would also not normally be itemised on your payment summary and does not need to be separately declared in your tax return).
There is a strict requirement that a claimed allowance be specifically referenced to an Award requirement – as this AAT case shows. The overtime meal allowance had been found to be a mere apportionment of the taxpayer’s gross salary, without the specific award-based connection, and the claimed deduction was therefore disallowed.
The relationship between overtime worked and the claimed meals was examined in this AAT case (Mitchell), which resulted in the taxpayer’s claim for a deduction of more than $8,000 based on a calculation of the Commissioner’s reasonable rates for 2012 (6 days x 50 weeks x $27.10) scaled back to $1,608, being the amount of overtime meal allowances which had been included in the taxpayer’s assessable income.
Recent actions by the Tax Office have tightened their interpretation of deduction conditions. For a full discussion of the issues see the Bantacs article here.
Each financial year the ATO updates the “Reasonable Overtime Meal Allowance Amount” (see Reasonable Travel Allowances)
Payg Tax Withholdings on Overtime Meals Allowances
Tax is not required to be withheld from award overtime meal allowances unless they are more than the reasonable amounts set by the Tax Office each year. To be exempt from tax deductions, the allowance must be paid under an industrial instrument in connection with overtime worked.
The issue of TD 2017/19 for the 2017/2018 year marked a tightening of Tax Office interpretation of the necessary conditions for the relief of tax on allowances and where relevant, the deduction of expenditure. For a full discussion of the issues, the following article from Bantacs is recommended: Reasonable Allowance Concessions Effectively Abolished By The ATO
- For information about travelling allowances – see ATO Reasonable Travel Allowances
- PAYG Withholding Variation: Allowances
This page was last modified 2019-04-09