Record Keeping of Overnight Travel Expenses

(last updated 28/04/2014)

Related Posts:
TAX WARNING! See this post for the latest ATO views and case law relating to travel allowances and associated travel expenses - Travel Allowance Update 2014.

Claiming Reasonable Travel Expenses

Key points of claiming travel allowance expenses and overtime meal allowance expenses are:
  • Allowance must be paid - The substantiation exception only applies if the employee is paid a assessable overtime meal allowance or a assessable travel allowance. The allowance must have an identifiable connection with the nature of the expense covered.
  • Claim must be allowable - A deduction claim cannot exceed the amount actually incurred for work-related purposes. The payment of an allowance does not of itself allow a deduction to be claimed.
  • For travel expenses - The employee must sleep away from home.
  • Substantiation exception - Where the amount claimed is no more than the applicable reasonable amount, substantiation of the claim with written evidence is not required.
  • Claims in excess of reasonable amounts - If the amount claimed is more than the reasonable amount, the whole claim must be substantiated, not just the excess.

Keeping Records of Overnight Travel

The following tables explain what records you need if you are claiming domestic or overseas travel expenses for accommodation, food, drink or incidentals.
If you did not receive a travel allowance:

Domestic travel
Overseas travel
Written evidence
Travel diary
Written evidence
Travel diary
Travel less than 6 nights in a row
Yes
No
Yes
No
Travel 6 or more nights in a row
Yes
Yes
Yes
Yes

If you received a travel allowance and your claim does not exceed the reasonable allowance amount:

Domestic travel
Overseas travel
Written evidence
Travel diary
Written evidence
Travel diary
Travel less than 6 nights in a row
No
No
No*
No
Travel 6 or more nights in a row
No
No
No*
Yes
*Regardless of the length of the trip, written evidence is required for overseas accommodation expenses but not for food, drink and incidentals
If you received a travel allowance and your claim exceeds the reasonable allowance amount:

Domestic travel
Overseas travel
Written evidence
Travel diary
Written evidence
Travel diary
Travel less than 6 nights in a row
Yes
No
Yes
No
Travel 6 or more nights in a row
Yes
Yes
Yes
Yes

Example

Michelle is a sales manager who travels from Brisbane to Melbourne to participate in a corporate planning seminar. She is away from home for two nights. Her employer pays her a travel allowance of $110 per night for accommodation, meals and incidentals and includes this on her payment summary. This amount is less than the reasonable allowance amount. Michelle’s overnight travel expenses exceed her allowance.

Michelle must include her travel allowance in her assessable income on her tax return as it is shown on her payment summary. She can claim a deduction for the overnight travel expenses she incurred without providing receipts or other written evidence, as long as her claim does not exceed the reasonable allowance amount. Should she wish to claim an amount in excess of the reasonable allowance amount, she will need to provide written evidence for all her expenses.

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Copyright 2014. My Tax Zone.