Can You Deduct Travel Expenses to Distant Workplaces?
When an employee has multiple regular workplaces far apart from each other, they might wonder if travel to the farther location for work is deductible. Unlike the usual commuting between home and a single workplace, the Australian Taxation Office (ATO) acknowledges that employees with multiple regular work locations may be eligible to deduct travel costs to the more distant one.
Conditions for Deductibility
To claim a deduction, the employee must show that the travel to the distant workplace is not just a personal choice of where to live. Instead, it must be necessary for their job. Specifically:
- The travel must be part of their job duties and essential for carrying out their work.
- The travel typically involves staying overnight away from home.
Example
Consider Kathy, who lives in Adelaide and works in the CBD but also needs to attend meetings at her employer's Sydney head office twice a week. While her Adelaide commute isn't deductible, her travel to Sydney might be. Here's why:
- She performs duties at both offices.
- Her trips to Sydney are vital for her work.
- Her employer requires her to travel to Sydney.
- The distance between both offices necessitates the travel for her employment, not just her living choice.
Exceptions
However, deductions aren't allowed if the need for travel stems from personal reasons. For instance, if an employee primarily works at a distant location but occasionally works near their home by choice, the travel to the distant workplace isn't deductible.
Understanding these rules helps employees determine if they can claim deductions for travel expenses, ensuring compliance with tax regulations.
Should you have any questions or need assistance, feel free to reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment through our live calendar.
- Deductibility of Employee Transport Expenses (1)
- Deductibility of Employee Transport Expenses (2) – General Deduction Principles
- Deductibility of Employee Transport Expenses (3) – Key Principles of TR 2019/D7
- Deductibility of Employee Transport Expenses (4) – Between Home and a Regular Place of Work
- Deductibility of Employee Transport Expenses (6) – Changing Regular Place of Work
- Deductibility of Employee Transport Expenses (7) – Exceptions
- Deductibility of Employee Transport Expenses (8) – Alternative Work Location
- Deductibility of Employee Transport Expenses (9) – Between Home and a ‘Transit Point’
