Work related travel expenses – what to claim through your tax return

From a quick drive in your car to visit a client, to overseas travel to an industry conference – they all include work-related travel expenses that are tax deductible! 

If you travel for work, any expenses and purchases you make related to that travel can usually be claimed as a travel expense on your tax return. 

Work-related travel expenses are usually divided into two types – transport expenses and travel expenses. 

Learn the difference and you can claim travel deductions through your individual tax return.

Overview:

• What are work-related travel expenses?
• What is included in transport expenses?
• What is included as a work-related travel expense?
• What travel expenses can’t you claim?
• How to claim your work-related travel expenses in your tax return
• What record keeping do you need to keep for a work-related trip?
• Before you hit the road for work

What are work-related travel expenses?

The Australian Taxation Office defines travel and transport expenses as expenses you incur as an employee when you travel while performing your work duties – work-related expenses.

Travel can be: driving your personal car from the office to a client’s office 5km away, or going to a temporary location for work, it can also be the cost of train travel from Sydney to Newcastle to support your satellite office for the day, or even work-related interstate or overseas travel costs.

Let’s have a look at the difference between work-related travel expenses and transport expenses.

What is included in transport expenses?

Transport expenses are costs you incur when you travel between workplaces are generally tax deductible.

Examples of work-related transport expenses for tax deductions include –

• Driving a vehicle – whether this is a car, motorcycle, ute, van or truck.
• Taxis, ride-share and ride-sourcing – includes services such as Silver Service Taxi, Yellow Cab, Uber, Ola, DiDi, Shebah, GoCatch, and Premier Cabs.
• Air travel 
• Other transport costs – includes train, bus, ferry, boat or other vehicles.
• Costs when using someone else’s vehicle – such as fuel costs.

What is included as a work-related travel expense?

Travel expenses are the expenses you incur when you travel and stay away from home overnight when performing your work duties.

Examples of work-related travel expenses for tax deductions include –

• Accommodation expenses – the cost of hotels, motels, AirBnB, and caravan cabins. 
• Sustenance expenses – these include food and drink while you are travelling.
• Incidental expenses – these may include laundry service, tips, government taxes and visas for travel, internet or phone charges. 
• Quarantine and testing expenses – expenses you incur during travel or as a requirement for travel. 

What travel expenses can’t you claim?

There are a few work-related travel expenses you can’t claim. They include – 

• The cost of travel from home to your everyday place of work and vice versa.
• If you run an errand on the way to or from work such as picking up the mail, buying stationery items, or dropping a package off to a customer.
• If you work overtime or out of business hours.
• When you work from home in one job and you travel to a different location to work for somebody else.

How to claim your work-related travel expenses in your tax return

There are different circumstances under which you will claim your work-related travel expenses. 

Let’s start with the work-related car expenses. 

Skip this part if you are claiming other travel expenses.

You claim your deduction for work-related transport expenses as work-related car expenses in your tax return if you answer yes to these two questions – 

1. Do your expenses relate to a car you owned, leased or hired under a hire-purchase agreement?
2. Did you work out your deduction using either the cents per km method or the logbook method?

If yes to both these questions, claim work-related car expenses in your annual return.

You claim your deduction for work-related transport expenses as work-related travel expenses in your tax return if your expenses relate to:

• a vehicle 
  • other than a car such as a motorcycle or scooter
  • with a carrying capacity of greater than one tonne such as utes or heavy vehicles
  • with a carrying capacity of nine or more passengers such as a van.
• car-hire fees
• costs you incur when driving someone else’s car or other vehicles for work purposes – for example, fuel expense
• transport costs such as air, bus, train, tram, ferry, taxi and ride-share or ride-sourcing fares
• bridge tolls, road tolls or car parking expenses associated with work-related transport expenses.

You claim your deduction for all travel expenses such as accommodation, meals and incidental expenses as work-related travel expenses in your tax return.

How about we summarise? 

• Claim all car-only work-related transport expenses as work-related car expenses in your tax return as a tax deduction.
• Claim other work-related transport expenses as work-related travel expenses as a tax deduction.
• Claim work-related travel expenses as work-related travel expenses in your tax return.

What record keeping do you need to keep for a work-related trip?

Before you start claiming deductions you may need to keep travel records of the costs incurred. 

If you don’t receive a travel allowance from your employer you will need to keep receipts of directly related expenses and a travel diary.

A travel diary must outline the details of your travels including the addresses, dates, times, and the purpose of the visit. Complete a travel diary for every year you claim work-related travel.

If you do receive a travel allowance from your employer there are certain situations where you are exempt from keeping records.

You can find all travel allowance record-keeping exemptions here. 

Before you hit the road for work

Get Sleek to help with your work-related travel expenses or even starting a travel diary, so you are not out of pocket. Call us on +61 2 9100 0480 or send a quick question through our chat box in the right-hand corner.