What are Allowances?
Allowances are separately identified payments made to an employee for:
- Working conditions – for example, danger, height or dirt
- Qualifications or special duties – for example, first aid certificate or safety officer
- Expenses that can’t be claimed as a tax deduction by the employee – for example, normal travel between home and work
- Work related expenses that may be claimed as a tax deduction by the employee – for example, travel between work sites.
Tax Advantaged Allowances
- Overtime meals
- Domestic travel
- Employee truck drivers
- Overseas travel
- Office holders covered by the Remuneration Tribunal
- Federal Members of Parliament
With some exceptions, an overtime meals allowance should be declared as income, and subject to conditions, may be claimable as a tax deduction. You can claim a deduction for overtime meals without getting written evidence, if all the following apply, you:
- Get paid and overtime meal allowance under an industrial instrument (such as an award)
- Buy food and drink on overtime
- Only claim up to the reasonable allowance expenses amount.
- $24.25 for breakfast
- $27.65 for lunch
- $47.70 for dinner
If the employee long distance truck driver does not receive a bone fide travel allowance then full substantiation applies. The reasonable daily travel allowance rate cannot be used. Owner-drivers must also substantiate all claims.