Ideas Tax Knowledge Blog

Deductibility of Employee Transport Expenses (6) – Changing Regular Place of Work

Written by Ideas Group | Jun 17, 2020 1:09:19 AM

 

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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.