Understanding what travel expenses you can claim as tax deductions is crucial for maximising your tax refund. Whether you’re a sole trader, an employee, an employer, or running a small business, navigating the complexities of work-related travel expenses can significantly impact your financial outcomes at tax time. 

At F5 Accountants, we frequently encounter questions about what constitutes a deductible travel expense. To help clarify these issues, we’ve put together this comprehensive guide on travel tax deductions in Australia. Read on to discover how to make the most of your work-related travel expenses and ensure you’re claiming everything you’re entitled to.

 

What am I eligible to Claim for Travel Tax Deductions?

When you claim an expense as a deduction, it reduces the amount of income on which you are taxed, thereby potentially lowering the amount of tax you owe or increasing your tax refund.

If you travel for work, you can claim expenses on purchases you make related to travel. These are to be claimed as work-related travel expenses on your tax return. Like most work-related costs, a travel allowance and most travel expenses are usually tax deductible. Of course, there are a few restrictions on what you can claim for a better tax refund.

So, what can you claim a deduction for? Here are a few examples of a work-related travel expense:

  • Accommodation
  • Bridge/Road tolls
  • Air, bus, train and taxi fares
  • Parking fees
  • Care hire charges
  • Meals (only if travel is included an overnight stay)
  • Bags or suitcases used specifically for work travel

 

What Deductible Travel Expenses Can I Claim?

When it comes to work-related travel, there are various expenses that you can claim as tax deductions. Understanding the full range of deductible expenses can help ensure you maximise your tax refund. Here’s a detailed look at the travel expenses you can claim:

 

Transport Expenses

You can claim expenses related to different modes of transportation used for work-related travel, including:

  • Train, Bus, Boat, or Taxi Fares: Costs incurred for using public transportation to travel for work purposes.
  • Ride-Share and Ride-Sourcing Services: Expenses for services like Uber, Lyft, or other ride-sharing platforms.
  • Flights: Airfare for domestic or international travel directly related to your job duties.
  • Short-Term Car Hire: Costs of renting a car for short-term work-related use.
  • Road and Bridge Tolls: Fees paid for using toll roads and bridges during work-related travel.
  • Parking Fees: Costs associated with parking when travelling for work.
  • Motor Vehicle Expenses: Costs related to a motor vehicle you lease or own, such as fuel, maintenance, registration, and insurance, if the vehicle is used for work-related travel.

 

Accommodation Expenses

You can claim the cost of accommodation when travelling for work, including:

  • Hotels and Motels: Expenses for staying in hotels or motels during work trips.
  • Serviced Apartments: Costs for staying in serviced apartments if it’s a requirement of your work travel.
  • Caravans or Campsites: Expenses for staying in caravans or campsites booked through a digital platform or otherwise.
  • Properties Booked Through Digital Platforms: Costs for accommodations like Airbnb, Vrbo, or other short-term rental platforms used during work-related travel.

 

Meal Expenses

Meals and beverages can be claimed if your travel includes an overnight stay:

  • Food and Drink: Expenses for meals and drinks consumed while travelling overnight for work. This can include breakfasts, lunches, dinners, and snacks.

 

Incidental Expenses

Minor but necessary expenses incurred during work-related travel can also be claimed, such as:

  • Phone and Internet Charges: Costs for using the phone or internet for work-related purposes at your overnight accommodation.
  • Other Incidental Costs: Any other minor expenses that are directly related to your work travel, like laundry or dry-cleaning services while on a work trip.

 

Documentation and Substantiation

To claim these expenses, you need to keep detailed records and receipts for all costs incurred. This includes:

  • Receipts and Invoices: Keep all receipts and invoices as proof of your expenses.
  • Travel Diaries: Maintain a travel diary, especially if you are away from home for more than six consecutive nights. Note where you were, what you were doing, and the start and end times of your activities.
  • Digital Records: Consider using apps like Zoho Expense to scan and store your receipts digitally for easy access and organisation.

By thoroughly documenting and claiming all eligible travel expenses, you can ensure that you are maximising your tax deductions and complying with ATO guidelines. If you’re unsure about any specific expenses, consulting with a tax professional can provide clarity and help you make the most of your deductions.

 

Travel for Work vs. Personal Travel, What Can I Claim?

In order to claim travel expenses deductions, the primary purpose of your trip must be work-related.

You can claim a tax deduction for the cost of transport on trips to:

  • Perform your work duties e.g., you travel from your regular place of work to meet with a client
  • Attend work-related conferences or meetings away from your regular place of work
  • Deliver items or collect supplies
  • Go from your
    • Regular place of work to an alternative place of work that isn’t a regular place of work (e.g., client’s premises) whilst still on duty, and back to your regular place of work or directly home
    • Home to an alternative place of work that isn’t a regular place of work to perform your duties, and then to your regular place of work or directly home

You can’t claim trips between your home and place of work, except in limited circumstances.

Additionally, if you travel with your partner, friends or family, you cannot claim any travel or accommodation costs for them. Similarly, you cannot claim a flight, meal expense or accommodation unrelated to your work purpose that you have paid.

 

Chat With An Accountant

Consulting with an accountant can provide clarity and ensure you’re making the most of your work-related travel expenses. 

At F5 Accountants, our team of experienced professionals is here to help you understand what you can claim, keep accurate records, and maximise your tax refund. Whether you’re a sole trader, an employee, an employer, or running a small business, we’re dedicated to providing the expertise you need to optimise your tax outcomes. Reach out to us today and let’s chat about how we can assist you in navigating travel tax deductions.

Justin Fahey - F5 Accountants

Justin Fahey

Justin Fahey, a respected tax agent and BAS agent based on the Gold Coast in Australia, excels in cryptocurrency tax, business tax, and personal tax. He was recognised as a finalist for the ‘Rising Star of the Year’ award at the Australian Accounting Awards in 2021. As the director of F5 Accountants, Justin prioritises financial clarity and long-term success for his clients, maintaining a thorough understanding of the latest industry trends and regulations.