Travel allowance and expenses

Travel allowance and expenses

On the occasion that you are required to travel overnight for work, you may be eligible to receive a travel allowance from your employer for accommodation, food, drink or incidental expenses. The reasonable amount of travel expenses is updated yearly and is based on job type and salary. From this allowance, tax deductions are to be withheld unless specified otherwise.

Exceptions are:

  • you’re expected to spend all of the travel allowance paid
  • the amount and nature of the travel allowance is kept separately in accounting records
  • the travel allowance is not for overseas accommodation
  • the amount of travel allowance paid is less than, or equal to the reasonable travel allowance rate.

Where exceptions apply, your employer won’t withhold tax and will include the allowance on your payslip.

It is important to keep detailed records of your travel expenses, length of trips and if it was overseas or domestic travel. If you need to claim anything from these trips in the future, you will need to provide the appropriate documentation covering all expenses, not just excess amounts. Vehicle, food, accommodation and incidental expenses need to be documented on a case by case basis:

  • With travel allowance
    • Written evidence need to be supplied for overseas accommodation
    • Travel diary need to be supplied on overseas trips of 6 nights or more in a row
  • Without travel allowance
    • Written evidence need to be supplied on all domestic and overseas travel
    • Travel diary need to be supplied on domestic and overseas trips of 6 nights or more in a row

If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.

Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.

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