Work-Related Travel Expenses for Employees
Many employees need to travel elsewhere from their usual place of work as part of their jobs. This could be to visit a client, go to another branch of your employer’s organisation, attend a conference or even for training. Any costs that are required to travel as part of your job are work-related travel expenses.
What are work related travel expenses?
Travel expenses include the fares or ticket costs for any modes of transportation, parking, tolls etc. as well as accommodation and meal expenses.
Are you using your personal vehicle for work-related transport? With the Driversnote logbook app you can create and share your vehicle log book with the ATO or your employer with ease.
These travel expenses are incurred whenever you have to pay for the cost of work-related travel. Documentary evidence of every expense is required in most situations by the ATO, or by your employer if you are reimbursed for your costs.
Can I claim travel expenses for work?
You can claim any work-related travel expenses as a deduction when you pay for them with your own money. If, however, you are reimbursed for any work-related travel expenses by your employer, then they become a tax deduction for the employer rather than for you and you will be taxed at the normal marginal rate on your wage.
Are travel expenses deductible?
If you pay for any work-related travel expenses with your own money, they are then tax deductible and as such will reduce your taxable income by the amount. However, if you are reimbursed by your employer, then they are no longer deductible by you as the employer will have paid for them and can then claim them as a tax deduction themselves.
Note that you can only deduct travel expenses if you are staying away from home overnight. If you are interested in finding out how to claim expenses for using your personal vehicle for business purposes, see our ATO guide on claiming business km.
If there is a personal element that is combined with business travel, then only the business-related component may be claimed as a tax deduction. Any work-related travel expenses need to be able to be verified if requested by the ATO. These records need to be kept for five years from the date the tax return is lodged.
ATO rates for work-related travel expenses
When you incur costs for your job and are not reimbursed by your employer, such as work-related travel expenses, this reduces your taxable income with the ATO by the total amount of the valid claims. As such, this reduces the amount of tax you pay at the marginal rate.
For example, if you were to earn $75,000 and incurred $5,000 of work-related expenses, assuming appropriate documentation and evidence to support your claim, then your taxable income would be $70,000, and you would pay tax at the marginal rate on $70,000 instead of on your salary of $75,000.
Learn about the rules of reimbursing employees for their car expenses or deducting expenses as an employee or self-employed individual.
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The days of manually documenting a week's worth of information and struggling to remember the work errand you were running around 6:30 p.m. last Thursday are long gone, thanks to mobile apps that track your trips and produce compliant mileage logs.