Overseas Work Travel

Travelling overseas for work related activities (WRA) and taking a holiday afterwards is an attractive idea. However, the Australian Tax Office (ATO) takes a fairly strict view of what, if any, travel-related expenses are tax-deductible.

There must be a direct connection between your current employment and the WRA. If, for example, you are employed as a medical practitioner, going to a “wealth-creation through real estate” conference will not enable you to claim the costs. If, however, you were asked by your employer to visit a well-known clinic at the destination and write a report when you return, then some of your expenses would clearly be tax-deductible.

Usually the fares to and from the location of the WRA are fully tax-deductible. Fares from there to where you are having your holiday are private and not tax-deductible. It is therefore important that these fares are clearly defined on any documentation you have.

Costs of accommodation, meals and incidentals for the days you are at the WRA are tax-deductible and wherever possible you should keep receipts.

The “reasonable” amount employees can claim for expenses is set out on the ATO website and is broken down into accommodation, meals and incidentals components. These amounts vary according to your salary level and where you go while travelling (some countries are more expensive than others). You can base your claims on some or all of these components. To claim accommodation costs at a location, the WRA must extend over two consecutive days.

If your employer pays you a travel allowance for the days you are involved in the WRA and you do not plan to claim anything more than that allowance, you do not need to keep any further records unless your trip lasts more than six days. In that case you will need to keep a travel diary showing the dates travelled, places visited, people spoken to, times and duration of the activities or appointments, and the purpose of the travel.