What can you deduct when travelling for work?

March 24, 2021

Travelling for work has been off the agenda, thanks to COVID-19, but with the vaccine rollout and community transmission at an all-time low, domestic business travel is growing in popularity. So, it is important to familiarise yourself with what you can deduct when travelling for work

Anticipating the increase in domestic travel and the Trans-Tasman bubble, the Australian Taxation Office has recently released a draft which details what counts as tax-deductible travel expenses. Can you claim food, drink, and accommodation expenses for your entire trip? Or does it depend on whether the expenses are directly related to your job responsibilities and tasks?

The general tax rules for claiming travel expenses allow you to claim for accommodation, food, and drink expenses when you stay away from home. In the case where you live too far away from your place of employment and you decide to spend the night in a local hotel for convenience, food and drink expenses are not able to be claimed as deductions. You can only claim on these if your employer requests you to travel away for job-related tasks.

Let’s take a closer look at some examples so you get a clearer idea.

Example 1:

Brittany lives in Bondi and accepts a job on the Gold Coast. She flies to Coolangatta at the start of each week and returns to Bondi at the end of each week. While on the Gold Coast, Brittany stays at a resort and incurs accommodation expenses, as well as room service, laundry and any food and beverages. She is not required to travel by her employer and the expenses are incurred due to her personal choice not to move to the Gold Coast.

Example 2:

Brittany lives in Bondi and has accepted a role with a nationwide company with offices in every major Australian city. The role is based on the Gold Coast, but Brittany has agreed to go to the Gold Coast office for 3 days each week, and then work from the Bondi Junction office for the remainder of the time. In this example, Brittany’s expenses of travelling to the Gold Coast are still not deductible because instead of moving to the Gold Coast, she has chosen to remain living in Bondi

Example 3:

Brittany is still living in Bondi, this time she lives with her family and is employed by a company based not far from her house that has nationwide offices in every major Australian city. Under the terms of her employment, her regular place of employment is the Bondi office, but as part of her training tole, she is required to travel to the Gold Coast for meetings. She stays overnight at a local resort and attends meetings all day. The expenses she incurs on the Gold Coast are tax deductible as it is directly related to her job requirements.

These three examples demonstrate the complexity in determining whether you are eligible for tax deductions. It all hinges on the personal circumstances of each scenario. If you are required to live away from where your family is based or are required to relocate on a permanent basis, this could complicate the situations.

If you are struggling to determine what’s tax deductible and what is not, we can help you ascertain whether you meet all the eligibility requirements based on your circumstances, so you don’t miss out on any money that you’re entitled to claim. Contact our team of tax experts today.


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