Work-related travel expenses can be claimed as a tax deduction, and reduce your taxable income for the year. According to the ATO, work-related travel expenses are any costs incurred because of travel, transportation or accommodation accrued during the course of your job. This does not include travel to and from home to your normal place of employment.
Work-related travel expenses may include use of your personal motor vehicle, overnight accommodation and meal charges, flights, other transport costs and ancillary travel expenses
It is important you keep all accommodation and work-related travel expenses records and receipts to substantiate your travel claims, including a travel diary for longer overnight trips. You can’t make the claim if you don’t have evidence of it.
When can you claim?
As is the case with all tax deductions, you can only claim deductions for travel expenses if they were directly related to your work. If you take a trip to a conference, and then decide to stay an extra night to see a friend, you must apportion your expenses to only include those directly related to the conference. Sometimes the amount you can claim can also depend on whether you receive a travel allowance from your employer – it also does not automatically entitle you to a deduction. You also cannot claim a deduction if you were reimbursed for your expenses.
What can you claim?
Potential expenses you could claim as deductions include:
- Accommodation, meals & incidental expenses (for overnight stays)
- Airplane, bus, train and taxi fares
- Bridge & road tolls (you cannot use your car logbook business percentage to apportion these)
- Parking fees
- Car hire charges (including fuel, insurance, registration etc.)
If you are a sole trader or a partner in a partnership and you travel for six or more consecutive nights, you must keep a travel diary or similar document before your travel ends, or as soon as possible afterwards. It is recommended that companies, trusts and individual taxpayers also keep a travel for longer trips. In your travel diary, record the detail of each business activity including:
- what the activity was
- the date and approximate time the business activity began
- how long the business activity lasted
- the name of the place where the business activity occurred.
Your travel diary can be in any format as long as it contains sufficient detail to justify what you are claiming. See example below.
Claiming the deduction
Since you’ve kept records of all the travel expenses you want to claim, it’ll make it easy to prepare your tax return. Check out our handy infographic below.
These tips are general, designed to get you thinking about the different things you can and can’t claim, and why. If you have any questions about this, please feel free to contact us.