Can I claim a tax deduction for my work travel costs?

Can I claim a tax deduction for my work travel costs?

Many of us need to do some sort of travel for work or business and it's not always reimbursed by our employer or client, so what of these costs can we claim at tax time and which ones aren't allowed? We'll largely be talking about employees here, but many of the same principles apply to those in business.

First up let's define what we mean by work travel costs (also referred to as work related travel). These are costs that were necessary to get to wherever it was that your job needed to be done. There is one notable exception here and that is travel to and from your ordinary place of work - this is considered private in nature and won't be covered unless you're transporting bulky tools or equipment. Some example work-related travel trips might include:

  • visiting a client by taxi from the office
  • flying to a training seminar
  • catching a train from nearby the office to see a supplier
  • travelling overseas for meetings at your employer's parent company (including flights, accommodation and meals)

Now that we have the sort of travel figured out, what kinds of costs are included? There are loads, but the main ones are things like:

  • taxi fares
  • Uber fares
  • bus and train tickets
  • flights & accommodation
  • tolls & parking
  • meals & incidentals (whilst travelling overnight for work)

Okay, so now we now the type of travel that's eligible to claim as well as the types of costs that are covered. In order to claim a tax deduction for all of this you'll need to meet a few additional criteria:

  1. You must be out of pocket. This means that you can't claim the cost if your employer has reimbursed you for the amount spent, the only amounts you can claim are amounts that you paid for personally and didn't get paid back for.
  2. You must keep records. Receipts and proof of payment are a first step, but for any overnight travel away from home there may also be requirements around keeping travel diaries. You can find more information on that here.

Again, it needs to be stressed that you cannot generally claim travel to and from your ordinary place of business, so any of those costs aren't going to be included when calculating your tax deduction for work-related travel.

Once you've got all your allowable expenses added up you'll stick them at label D2 in your personal tax return and you're done. Easy, right?

If you'd like any advice or assistance when it comes time to prepare your own tax work please get in touch. We'd love to help. Or if you'd simply like more tax tips and tricks delivered directly to your inbox, hit the button below to subscribe to our monthly newsletter, Better Business, today!

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