Rates of Meal Allowance & Vehicle allowance

2021-22

RATES OF MEAL ALLOWANCE, MOTOR VEHICLE – CENT PER

KILOMETERE AND LUXURY CAR LIMIT 

Income tax – what are the reasonable travel and overtime meal allowance expense amounts for the 2021-22 income years?

Claim must be allowable – A deduction claim cannot exceed the amount actually incurred for work-related purposes. The payment of an allowance does not of itself allow a deduction to be claimed.

Allowance must be paid – The substantiation exception only applies if the employee is paid an overtime meal allowance or a travel allowance. The allowance must have an identifiable connection with the nature of the expense covered.

For travel allowance expenses – The employee must sleep away from home.

Substantiation exception – Where the amount claimed is no more than the applicable reasonable amount, substantiation of the claim with written evidence is not required.

Claims in excess of reasonable amounts – If the amount claimed is more than the reasonable amount, the whole claim must be substantiated, not just the excess.

Verification of reasonable claims – In appropriate cases, where the substantiation exception is relied on, the employee may still be required to show :

  •      How they worked out their claim;
  •      An entitlement to a deduction (for example that work-related travel    was undertaken);
  •      A bona fide travel allowance was paid; and
  •      If accommodation is claimed, that commercial accommodation was used.

The nature and degree of evidence will depend on the circumstances: for example, the circumstances under which the employer pays allowances, the occupation of the employee, and the total amount of allowances received and claimed during the year by the employee.

Tax return treatment – Where a travel or overtime meal allowance that 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. Whenever a claim is made for overtime meal or travel allowance expenses the allowance must also be included in the tax return.

Reasonable amount for overtime meal allowance expenses

For the 2021-22 income years the reasonable amount for overtime meal allowance expenses is $32.50

For the 2021-22 income year the reasonable amount for overtime meal allowance expenses is $32.50

Deduction Maximum Rate
HOME OFFICE EXPENSES If you’re an employee who works from home, you may be able to claim a deduction for expenses you incur relating to that work. These can be additional running expenses such as electricity, the decline in value of equipment or furniture and phone and internet expenses.

If your home is your principal place of business, you should refer to running your business from home.

In most cases, if you are working from home as an employee, there will be no capital gains tax (CGT) implications for your home.

. Expenses you can’t claim

There are some expenses you can’t claim a deduction for as an employee. Employees who work at home can’t claim costs:

  • for coffee, tea, milk and other general household items your employer may provide you at work
  • for your children and their education including
    • setting them up for online learning
    • teaching them at home
    • buying equipment such as iPads and desks
  • your employer pays for or repays you for the expense
  • for the decline in value of items provided by your employer – for example, a laptop or a phone.

Employees generally can’t claim occupancy expenses such as rent, mortgage interest, water and rates.

Calculation methods

There are three ways of calculating home office expenses depending on your circumstances. The methods are the:

You must meet the record keeping requirements and working criteria to use each method.

Use our Home office expenses calculators to help work out your deduction.

Once you have calculated your deduction, enter the amount at ‘Other work-related expenses’ in your tax return.
Overtime Meals $32.50 Per Overtime (if meal allowance is shown in PAYG Summary)
Laundry Per Load
  Mixed 50cents
  Deductible Clothing Only $1 per LOAD

MOTOR VEHICLE – CENT PER KILOMETRE (YEAR 2022-23)

For all Cars 75 cents per kilometre

Div 7A benchmark interest rate

Income year Rate
2022/23 4.77%
2021/22 4.52%
2020/21 4.52%

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Car Depreciation Cost Limit

2021-22 $64,741
2022-23 $60,733