Work related travel expenses – what to claim through your tax return
- February 10, 2023
- 10 min read
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 –
- Do your expenses relate to a car you owned, leased or hired under a hire-purchase agreement?
- 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.