Understanding Changes to an Employee’s Regular Work Location
When an employee starts working regularly at a new location, it’s crucial to determine if this place has become their regular work location. According to the Australian Taxation Office (ATO), there is a general guideline, known as the "three-month rule," to help make this determination.
What is the Three-Month Rule?
The ATO suggests that if an employee works at a new location for three months or more, this place typically becomes their regular work location. However, this isn’t a strict rule. The actual time needed can vary depending on several factors:
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Nature of Employment: For employees on short-term contracts, even less than three months at a new work location might be enough to consider it their regular place of work, compared to permanent employees.
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Frequency of Attendance: How often an employee goes to the new location also matters. If they go there frequently over a short period, it might still become their regular workplace. Conversely, if visits are sparse over a longer period, it might not.
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Element of Choice: If employees choose to work at a new location rather than being assigned there, it’s more likely to be recognized as their regular workplace.
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Travel Conditions: Travel to the new location could be seen as part of their job if it’s done during work hours or under the employer's directions.
Implications for Work-Related Expenses
It's important to note that if an employee relocates to a new work location, any relocation expenses incurred are not tax-deductible, as they are considered personal expenses.
This framework helps both employers and employees understand and manage changes in work locations and the implications they may have on work-related expenses.
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 (5) – Geographically Distant Places 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’
