Deductions

Travel expenses

Travel expenses are the costs of travelling away from home for work or business, such as fares, accommodation and meals, which may be deductible if the travel is genuinely work-related.

Travel expenses are the costs you incur when you travel for work or business purposes. They commonly include airfares, train and taxi fares, accommodation, meals while away, car hire and incidental costs. To be deductible, the travel has to be directly connected with earning your income, such as visiting a client, attending a conference, inspecting a site or working at a temporary location.

There is an important distinction between work travel and private travel. Normal trips between your home and your regular workplace are generally private, even if they are long. Where a trip combines work and a holiday, you generally need to split the costs. If the main purpose is work, you may be able to claim the work-related portion, but costs that are clearly private, such as sightseeing, are not deductible.

Records are central to claiming travel. For fares, accommodation and similar costs you generally need receipts or invoices. For longer trips, a travel diary that records your activities, dates, times and locations can help prove the work purpose. Employees who receive a travel allowance may be able to claim without receipts for meals and incidentals up to amounts the ATO considers reasonable, but those amounts are reviewed each year, so check ato.gov.au for current figures.

For a business registered for GST, travel costs may carry GST credits. Domestic airfares, hotel accommodation and taxi fares usually include GST, and you can claim a credit if the travel is for your business and you hold a tax invoice where required. International airfares are generally GST-free, so there is no GST to claim on those. Restaurant meals usually include GST, but meals that are entertainment for private benefit are treated differently.

For sole traders and businesses, travel expenses are a normal revenue expense claimed in the year they are incurred. It helps to code travel separately in your accounting software so you can see GST and income tax amounts clearly and can answer questions if the ATO reviews a claim.

A common mistake is claiming a family member's costs when they have no work purpose, or claiming the full cost of a mixed trip. Another is lacking evidence for accommodation or fares. This is general information only, so check your own circumstances with the ATO or a registered tax professional.

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