Private ruling: Meal expenses
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for meals where you receive an allowance folded into your salary but you do not work overtime or sleep away from your home? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 900-60 | Income Tax Assessment Act 1997 Section 32-50

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. Allowances received by an employee from an employer are generally assessable income to the employee. However, an employee is not automatically entitled to a deduction for expenses incurred in relation to an allowance. The expenses must meet the criteria for deductibility under section 8-1 of the ITAA 1997 and the substantiation requirements. Meal expenses are normally private or domestic in character. However, where a taxpayer is away from home overnight in connection with an income producing activity, meal expenses are deductible under section 8-1 of the ITAA 1997. The expenditure is not considered private because its occasion is the taxpayer's travel away from home on income producing activities. Additionally, under section 32-50 of the ITAA 1997, a deduction may be allowable for the cost of meals to do with overtime worked by a taxpayer if the taxpayer receives a genuine overtime meal allowance under an industrial instrument to buy the food or drink. That is, to be a genuine overtime meal allowance, the allowance needs to be paid for specific individual instances that you work overtime and the amount of the allowance must enable you to buy food and drink in connection with the overtime worked. An amount that has been folded into your normal salary or wages is not considered to be an overtime meal allowance. For example, an amount you receive for meals regardless of whether you work overtime or not is considered to be included as part of your normal salary even though it is shown separately on your pay slip. In your case, you were not required to be away from home overnight and you did not receive a genuine overtime meal allowance. Therefore, you are not entitled to claim a deduction for meal expenses.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Your total remuneration package provides for an amount of daily meal allowance. | You do not work overtime of sleep away from home to receive the allowance.