Private ruling: Employee meal expenses
Published: August 2011
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the cost of meals provided to your employees while they are travelling to and working in remote locations? | A1: Yes.



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. Construction is your main business activity and how you produce assessable income. It requires your employees to be away from home overnight on occasion in remote locations. During those times, the expense that you incur to provide them with meals is connected to the travel and work in which they are engaged. Therefore, the expenses are considered to be connected to the production of your business income and have the essential character of a business expense. Meal expenses that you incur for your employees whilst they are working away from home overnight will be deductible under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You are a company engaged in the construction business. | A number of your business projects are located in remote areas. | You have a number of employees who travel to these remote locations to complete these projects. | Your employees may be required to remain at or near the project locations for a number of nights. | The employees do not have access to shops to purchase food or drinks during these projects. | Your employees are usually away from home for a period of one to four nights. | You provide meals from food you have pre-purchased to provide to your employees while they are on these remote projects. | The meals are consumed by your employees at the project locations.