Private ruling: Travel
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for travel between home and work? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in the course of gaining or producing assessable income, but are not allowable to the extent that they are of a capital, private or domestic nature. A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses ). However, there are situations where it has been accepted that travel by employees from home to work is deductible. Taxation Ruling IT 2543 Income Tax : Transport Allowances : Deductibility Of Expenses Incurred In Travelling Between Home And Work summarises these situations as follows: (a) the taxpayer's home constitutes a place of employment and travel is between two places of employment or business; (b the taxpayer's employment can be construed as having commenced before or at the time of leaving home; (c) the taxpayer has to transport by vehicle bulky equipment necessary for employment; (d) the taxpayer's employment is inherently of an itinerant nature; (e) the taxpayer is required to break his or her normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etc.) on the way from home to the usual place of employment, or from the place of employment to home. As your home is not a place of business, you do not transport bulky equipment, your work is not considered to be itinerant and you do not perform any significant employment duties on the way to work the only situation that could be applicable to you is whether your employment can be construed as having commenced before or at the time of leaving home. In your case, even though your employer pays you during the travel leg of your journey, you are not on work during this time instead you are travelling to work to commence your work duties. As your employment has not commenced, this circumstance does not apply to you. Therefore, the expenses that you incur when travelling between home and work are not deductible.

Relevant facts: You are employed under a roster of X days on and Y days off. | Your work place is Z hours away from your home. | You use your own car to travel to the work place and your employer compensates you by payment of an hourly rate for the travel. | Your home is not a place of business, you are not required to carry bulky equipment between home and work and you do not undertake any significant work activities on your way to the work place.