Travel Allowances ATO ruling

[Sprucegoose]

Just enjoyed 7 days on the full allowance in Manila. More than covered my diet of fish and rice (joking).

Thats true....and your doctor will be happy as well.

 

[tallboy]

It needs to be shown otherwise this ruling is not applicable.

My understanding is that if the meal & incidental allowances paid by the employer do not exceed the reasonable amounts shown in TD 2012/17, they do not need to be shown on your payment summary, and if not shown there they are not included on your tax return.

Is this incorrect? :?:

Thanks,

tb

 

[MarcB]

My understanding is that if the meal & incidental allowances paid by the employer do not exceed the reasonable amounts shown in TD 2012/17, they do not need to be shown on your payment summary, and if not shown there they are not included on your tax return.

Is this incorrect? :?:

Thanks,

tb

I thought they still appeared as "non taxable allowances".

 

[awilcockson]

My understanding is that if the meal & incidental allowances paid by the employer do not exceed the reasonable amounts shown in TD 2012/17, they do not need to be shown on your payment summary, and if not shown there they are not included on your tax return.

Is this incorrect? :?:

That is correct.

Tax return treatment - Where a travel or overtime meal allowance which does not exceed the reasonable amounts is not shown on the payment summary, and it has been fully spent on deductible expenses, neither the allowances nor the expenses need be shown on the employee's tax return. If an amount less than the allowance has been spent, the income tax return must include the allowance and the expense claimed.

This is why I always have expensive meals when travelling, to ensure I spend all of my allowance

 

[albatross710]

This post reminded me to do a search to see if the rates have been updated fo rthe 2013/14 year. I couldn't as of today find a new ruling.

 

[oz_mark]

This post reminded me to do a search to see if the rates have been updated fo rthe 2013/14 year. I couldn't as of today find a new ruling.

http://law.ato.gov.au/pdf/pbr/td2013-016.pdf

 

[albatross710]

http://law.ato.gov.au/pdf/pbr/td2013-016.pdf

Thanks OzMark, it took you ten minutes to post that..I spent 15 minutes searching the public ATO database.

Looks like many international destinations are very little change. Some increases domestically of 1-2%

 

[Alh01]

Thanks for finding that. I watched the ATO site time out for 30 minutes before giving up today. We have always taken it to apply from time of leaving home to time of return for any trip. The accommodation rates allowed for country centres always seem on the light side for any half-decent motels, but the meal allowances make up for it, especially with those expensive meals.

Our accountant has always insisted that any travel (car, ferry, train, taxi) that is any part of a trip should be separately reimbursed, and not taken from the incidentals allowance. That certainly helps a little more.

 

[serfty]

Just a bump as it is now time to finalise the 2013 - 2014 financial year.

Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2013-14 income year?

 

[heycam]

Just a bump as it is now time to finalise the 2013 - 2014 financial year.

Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2013-14 income year?

Does this apply when your employer reimburses you exactly for meal expenses that you pay for initially? And for accommodation, if the employer pays for it rather than I pay then get reimbursed?

 

[medhead]

Does this apply when your employer reimburses you exactly for meal expenses that you pay for initially? And for accommodation, if the employer pays for it rather than I pay then get reimbursed?

It depends on the amount they pay. In general it will apply but the only issues are about substantiation requirements and the need to declare income. If your employer is paying you allowances that are equal to or less than the reasonable amount (and fully cover your expense) then you really don't need to do anything. Well, do check they haven't included the allowance as income.

If they were paying less that the allowance amount and not covering your costs, then you can claim the difference. But that should be achieved by claiming the full expense as a travel expense and including the amount they pay you as income. But it doesn't sound like that applies.

If they are paying you more than the reasonable amount, I'm not sure what happens. But FBT issue might start to arise, plus the need for receipts, travel dairies and such like.

 

[Alh01]

Time for the ATO to update those rates.

Does anybody have the link to the new year's rates yet?

 

[Virgin Bart]

Time for the ATO to update those rates.

Does anybody have the link to the new year's rates yet?

They are available if you search the latest tax rulings / gazette. I would provide a link but I can't find it on my mobile (in VA lounge).

The one rate I use didn't change (other areas accommodation).

 

[albatross710]

They are available if you search the latest tax rulings / gazette. I would provide a link but I can't find it on my mobile (in VA lounge).

The one rate I use didn't change (other areas accommodation).

Here is the PDF : http://law.ato.gov.au/pdf/pbr/td2014-019.pdf

 

[cove]

Have 5 staff in America next month for staff training plus the big kahuna and myself. Better go to Costco to get the Flemings and McCormick gift cards 20% off .

 

[Alh01]

Found the link for this year. It is dated 9 July 2014.

http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD201419/NAT/ATO/00001&PiT=99991231235958

Rates don't look much different but the salary brackets are definitely indexed (upwards of course).

 

[albatross710]

Have 5 staff in America next month for staff training plus the big kahuna and myself. Better go to Costco to get the Flemings and McCormick gift cards 20% off .

These rates are not necessarily the rates that staff would be paid. They are the maximum that can be paid without substantiation. So a staff member can be paid 50% of this rate and still be happy.

 

[cove]

We just pay reasonable expenses rather than an allowance as we only have about 25 travelling. So we go cash advance and receipts for their expenses that have to tie in with their work report.

 

[bismarck]

Does this apply when your employer reimburses you exactly for meal expenses that you pay for initially? And for accommodation, if the employer pays for it rather than I pay then get reimbursed?

If they were paying less that the allowance amount and not covering your costs, then you can claim the difference. But that should be achieved by claiming the full expense as a travel expense and including the amount they pay you as income. But it doesn't sound like that applies.

Sorry to revive an old thread.

Am I to understand that if my employer reimbursed my meal expenses etc but that didn't cover all the costs I incurred which probably exceeded the ATO amount (i.e. they would pay up to a certain cap for meals, and they wouldn't pay for some things like dry cleaning when I spilled coffee all over my suit etc) it would be right to:

a) Report what they did reimburse as a travel allowance on the payment summary; and then
b) claim the relevant amount for the country travelled to and the days stayed there (i.e. 20 days at $x/day for meals/incidentals according to the ATO ruling)

I get a bit confused about use of the word "allowance".

 

[medhead]

Sorry to revive an old thread.

Am I to understand that if my employer reimbursed my meal expenses etc but that didn't cover all the costs I incurred which probably exceeded the ATO amount (i.e. they would pay up to a certain cap for meals, and they wouldn't pay for some things like dry cleaning when I spilled coffee all over my suit etc) it would be right to:

a) Report what they did reimburse as a travel allowance on the payment summary; and then
b) claim the relevant amount for the country travelled to and the days stayed there (i.e. 20 days at $x/day for meals/incidentals according to the ATO ruling)

I get a bit confused about use of the word "allowance".

Preface this by saying the following is not tax advice or financial advice. It is just my interpretation of the TD previously linked. It would pay to read through and make your own interpretation, and also seek tax advice if it's not clear.

The tax determination lists the amounts that the ATO believe are reasonable for travel expenses. The main effect is that the TD removes the substantiation and FBT requirements, provided you work within the various requirements. It is important to note that the following is also based on you having actually spent money on the expense.


Having just written all that, it is very complex and I probably haven't explained it well. Maybe cutting down to your points:

a) you can't put that on the payment summary as a travel allowance as that is the employers job, include it as other income
b) claim the relevant ATO amount, provided you spent the money - yes 20 days @ $x/day meals and incidentals


If they have included the allowance paid on your payment summary then you really should be claiming a deduction, for the full expenses upto the reasonable amount.


If you significantly exceed the reasonable amounts then it is worthwhile looking into the substantiation requirements.

This is not tax advice...