Work related travel expenses
Let’s explain how to turn work-related travel expenses back into dollars in your pocket at tax time. Plus, how to stay out of trouble with the ATO and claim only what you’re entitled to.
What exactly is a work-related travel expense?
A travel expense that directly relates to your current job is considered a work-related expense. As with most work-related expenses, travel expenses are usually tax deductible. Of course, there are a few restrictions on what you can claim but we’ll explain those a little later.
What type of travel expenses can you claim?
The following travel-related expenses are tax deductible if you are eligible to claim them (check eligibility below):
- Incidental expenses
- Air, bus, train and taxi fares
- Bridge and road tolls
- Parking fees
- Car hire charges
- Meals (if your travel included an overnight stay)
- Bags used only for work travel
To claim any work-related travel expenses, your travel must be specifically work-related.
Can you claim public transport on tax?
Did you know you might be eligible to claim some of your public transport costs back on tax?
However, these deductions can get quite confusing and complicated. Therefore, we have broken it down for you into some simple instances of when you can and can’t claim these public transport costs back.
When can you claim the cost of public transport?
- Travelling directly between two separate workplaces. This could be if you have a second job.
- Travelling from your workplace to work meetings or events during work hours.
- Travel expenses incurred on a work related trip (see below).
- Travelling from your home to an alternative workplace if required.
- If you work from home then travel to your workplace for that same employer.
- If you work at more than one location for the same employer, you can claim the cost of travelling between locations.
What public transport expenses can’t you claim?
- The cost of travelling to and from your everyday place of work.
- If you run an errand on the way to or from work. Eg. pick up the mail or a package.
- If you work overtime or out of hours.
- Your home is your place of work and you travel to a different location to work for somebody else.
Can you claim parking?
If you use your own car for work purposes, there are some car parking expenses you can claim back on tax.
You are eligible to claim back expenses incurred when travelling between locations for work and having to pay for parking. For example, if you are required to attend a company meeting or event where you have to pay for parking, this can be claimed back.
However, you can’t claim the cost of normal, everyday parking when you are attending your main place of work and returning home.
If your employer has provided you a company car, maintenance of that car (eg. fuel and oil) is not tax deductible. The same applies to parking. You can only claim parking deductions in your company car under the same circumstances as an employee who drives their own car. See above for further details.
When to keep a travel diary?
If you are away from home for more than 6 consecutive nights, you should keep a travel diary to record where you were, what you were doing there and the start and end times of your activities.
- 6:00am Flight to Sydney – arrive 8.30am
- 8.30am -9am Uber from Sydney Airport to Darling Harbour
- 9:30am – 4:00pm Marketing Conference
- Overnight at The Hyatt, Darling Harbour.
If you don’t have a travel diary handy, no problem! Download a travel diary template from the Etax Downloadable Resources page.
Do you receive a travel allowance?
If you receive a travel allowance from your employer, the amount is generally included in your salary as taxable income.
A common mistake is to assume that the entire amount of the allowance can be claimed as a tax deduction. This isn’t necessarily the case.
You should only claim the total of your actual expenses. Substantiation may not be required if the claim is less than the ATO published ‘reasonable allowance’ rates, however, you could still be asked to validate the claim.
What travel records should you keep?
You should always keep ALL your travel expense records and receipts, even if you receive an allowance. You never know what the ATO will clamp down on next.
Remember, if you’re not sure whether you can claim an expense, keep the receipt and ask your tax agent. Remember the motto: You can’t claim it if you can’t prove it!
Photograph your receipts and other purchase records, and keep everything in one folder. Create a back up folder too, just to be on the safe side.
Etax clients can upload travel expense receipts straight into their secure online account at etax.com.au. That way everything this is all ready and waiting for tax time!
What travel expenses can I not claim?
There are certain expenses and circumstances where a travel expense is not deductible.
- You can’t claim for any part of a trip that is not for work purposes. So, if you had to go to a work related conference in another city and decided to stay an extra night to visit a friend, you couldn’t claim for any costs related to that extra night.
- Although you can claim the cost of travel between two different workplaces, you generally can’t claim your journey from home to work and from work to home each day. The exception is if your employer requires you to transport heavy goods to and from home.
- If you are given money or reimbursed for a travel related expense you cannot then claim it as a tax deduction.
If you have any questions regarding your work-related travel expenses, feel free to get in touch. Our accountants are always happy to set you on the right track for the best possible tax refund! :)
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