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.

Curious about what other tax deductions you can claim during tax time in Australia? We have just the article for you, click to find out more. 

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.

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Keen to learn more about tax deductions for freelancers and tradie tax deductions? Click to learn more. 

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.