Private ruling: Deduction - travel expenses
Date of advice: 16 April 2026
Published: 13 July 2026
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you claim a deduction for any of the travel expenses you incurred in relation to your trips to and from the City X office under section 8-1 of the Income Tax Assessment Act 1997 ? | A1: No.

Relevant facts and circumstances: You are an employee of Company ABC, commencing your employment with them some years ago in the role of Position 1. Under your contract of employment Position 1 was full-time located in City A in State A, with your hours of work being X hours per week plus reasonable additional hours as necessary to meet the needs of the business. Company ABC has offices in State A and another state in Australia, in addition to international offices. Company ABC has a hot desk approach, and you can use a desk in their office in City A when you are there. You also have access to a desk in their office in another state if you were to travel there, or similarly in any of their other global offices if you travelled internationally. Company ABC has a hybrid working arrangement which allowed you to be in the City A office for part of the working week, working from your home for the remaining days. After a period, you changed positions, now being in Position 2, with a change to your job title and a change in your reporting conditions with the terms of your contract of employment not being changed. The department of which Position 2 is a part had only started some months prior to you being offered the position, with Position 2 not existing in the City A office prior to it being offered to you. Position 2 changed where you reported, with you ceasing reporting to your manager in the Australian office to directly reporting to your manager who was in Country X. Your team are in different countries where Company ABC has a business presence. Your working hours remained the same with the position requiring you to engage with many different departments, some of which were not in Australia, with a requirement that you had to work with parties in multiple time zones. You were living at a rental property located in City A when you commenced Position 2 but had purchased a property located in State B (the Property) some years earlier on which you were having a house constructed. You raised the issue of the multiple time zones when you first took Position 2 and made a request in relation to your working from home arrangement and being able to work remotely from the Property in State B. Your working from home request was approved for you to work at the Property for a specified period with the requirement that you were to spend a specified period in the City A office at your discretion during specified periods of the year. During the same month the construction of your house in State B was completed and you moved into the new house after some weeks, commencing your employment duties in relation to Position 2 some weeks later. After some weeks you were notified by a Company ABC representative that your position name had changed, but there were no further changes to your existing terms and conditions of your employment. You have a group of internal and external stakeholders who are located both domestically and internationally. You do not meet face to face with international stakeholders, but are expected to engage with domestic stakeholders face to face, with those stakeholders being located in City A both before and after your move to State B. You are not required to be on call, but you sometimes need to work varied, and late, hours due to the projects and deliverables you are involved with in your role. You have undertaken several return trips from State B to the State A to complete the mandatory period working in the City A office in accordance with your working from home agreement. During those trips you have incurred expenses in relation to flights, Uber, taxi fares, public transport, accommodation and food (collectively referred to as the travel expenses). You stayed at a relative's property for most of the trips, which is located some distance from the City A office, staying in paid accommodation during other times. You travelled from State B to State A during weekday evenings or nights, returning to State B of weekday evenings or weekends. You do not undertake any employment duties outside of the City A office while you are working there. Due to the varied nature of your role, you had sometimes undertaken activities prior to leaving on the trips to State A. When you travel to State A you take equipment that has been provided by Company ABC, being a laptop, laptop charger cable, wireless headset, mouse and work pass. You would use your laptop to work from the airport. Your working hours while in the City A office vary but normally were between Xam and Xpm as that time period was better to cover the hours in Country X with your team and external vendors. On a couple of occasions you had worked late due to timelines in relation to a project you were leading. You are currently organising another trip during the ruling period, having books flights for the upcoming trip. You anticipate spending several nights in paid accommodation during the trip. Company ABC does not reimburse you for any expenses you incur in relation to your travel between State A and State B, or while you are in City A. Nor do you receive any travel allowance from Company ABC to cover the travel expenses you incur in relation to the trips.

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 (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. When considering whether travel expenses are deductible, it is important to determine whether the travel is being undertaken while 'travelling on work' or if the expenses are incurred in relation to 'living expenses. Taxation Ruling TR 2021/ 1 Income tax: when are deductions allowed for employees' transport expenses? outlines when an employee can deduct transport expenses under section 8-1 of the ITAA 1997, such as travel by airline, train, taxi, bus, or other vehicle. The mere fact that an employee lives a significant distance from their regular place of work does not make their transport expenses deductible, for example, if they are required to fly to attend work. In such instances, the transport expenses are incurred because the employee lives at a distance from their regular place of work, rather than the employment itself being the occasion for the expenses. The expenses are explained by where the employee chooses to live in relation to where their regular place of work is located and as such, they are not incurred in gaining or producing the employee's assessable income. The transport expenses are also private expenses (Paragraph 48 of TR 2021/1). The following example, Example 5 at paragraph 49 of TR 2021/1, considers travel between home and a distant regular work location: Isabelle is a specialist technician who lives in Brisbane. She works as an employee for a company based in Sydney on a part-time basis. On the days she is required to work (Wednesdays and Thursdays), she drives from her home in Brisbane to the airport, catches a flight to Sydney and then a taxi to her company's office. She stays overnight in Sydney on Wednesday night and returns home on Thursday evening. Isabelle's transport expenses (travel between her home and Brisbane airport, return flights from Brisbane to Sydney and taxis between Sydney airport and her office) are not deductible. Isabelle's travel is undertaken to put her in the position to commence her duties, and the expenses are not incurred in gaining or producing her assessable income. The expenses are incurred as a necessary consequence of Isabelle choosing to live in Brisbane and work in Sydney and are a prerequisite to gaining or producing her assessable income. Isabelle's travel between her home and her regular workplace is also private in nature. In contrast, where the nature of the employment requires an employee to travel away from home overnight, for purposes explained by their employment and not because of where they have chosen to live, the transport expenses incurred in travelling to the alternative work location will be incurred in the course of gaining or producing the employee's assessable income (Paragraph 50 of TR 2021/1). The following example, Example 8 at paragraphs 61 and 62 of TR 2021/1, considers travel between home and work location that is not part of employment duties: Sue lives with her family in Sydney. Sue takes on a leadership role with a company that has offices all around Australia. The role is based in Melbourne and the duties attached to it can be primarily performed in Melbourne. However, Sue enters into an arrangement with her employer where she must attend the Melbourne office at least three days per week, but at her discretion (or choice) can work out of the Sydney office up to two days per week. Although the Melbourne office is a distant work location and Sue carries out her duties at the Melbourne and Sydney offices, Sue's travel from home to those offices will not be deductible. This is not a case where the role Sue undertakes necessarily requires travel to be undertaken. The substantive duties attached to Sue's role do not require her to travel between Sydney and Melbourne. The travel is attributable to Sue's choice to remain living in Sydney whilst taking on a Melbourne-based role. Sue is required to work in Melbourne, and, for convenience, she may also work part of the time in Sydney. The transport expenses incurred in travelling between Sydney and Melbourne are not incurred in gaining or producing her assessable income. The travel is better characterised as travel from home to a regular work location which is attributable to her private circumstances, that is, her choice about where to live rather than being a necessary incident of her employment. The undertaking of some work duties by the employee at home at their convenience does not make expenses of travel to their regular place of work deductible. This is because the travel itself is not explained by the employment duties and is thus not part of the employment. This treatment will not change even if the travel occurs during work hours. Moreover, travel from home to a regular place of work in this situation is still explained by where an employee chooses to live in relation to their regular place of work, which is a private or domestic matter. It does not matter whether the work at home occurs informally or as part of a regular arrangement with the employer (Paragraph 75 of TR 2021/1). Where an employee has an area of their home set aside as their sole base of operations because their employer provides them with no other location to work from, that area of their home becomes their regular place of work. Such an employee will be entitled to a deduction for expenditure incurred in travelling to perform their duties, such as travel to a client's premises (Paragraph 78 of TR 2021/1) The following example, Example 12 at paragraph 76 in TR 2021/1, considers travelling between home and work location when working at home for convenience: Nico works as a travel agent. As he has a small child, his employer allows him to work from home rather than in the office. Nico has a home office that he uses exclusively for work. At least twice per month, Nico is required to attend the office for regular staff meetings. Nico's home office is not a place of business because Nico's employer would normally accommodate him at their office. At Nico's request they have agreed to let him work from home so that he can work at whatever time is convenient for him within an extended bandwidth. The transport expenses relating to travel from Nico's home to the office are not incurred in gaining or producing his assessable income and are private in nature. Nico works from home for his mere convenience so he can look after his small child and work flexible hours. Accordingly, his travel from home to his regular place of work at the office is not explained by his work duties, that is, the travel is not relevant to the practical demands of carrying out Nico's work duties. It is a consequence of Nico's choice to work from home rather than in the office. Nico is not entitled to claim a deduction for his transport expenses. TR 2021/1 should be read in conjunction with TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances. TR 2021/4 outlines when an employee can deduct accommodation and food and drink expenses under section 8-4 of the ITAA 1997 when they are travelling on work. Whether accommodation and food and drink expenses are deductible depends on the facts and circumstances of each case. An employee can only deduct accommodation and food and drink expenses under section 8-1 of the ITAA 1997 to the extent that: • they incur the expense in gaining or producing their assessable income • the expense is not of a capital, private or domestic nature • the expense is not incurred in gaining or producing exempt income or non-assessable non-exempt income, and • a provision of the Act does not prevent it from being deducted (Paragraph 5 of TR 2021/4) Accommodation and food and drink expenses are ordinarily private or domestic in nature and are generally not deductible under section 8-1 of the ITAA 1997. This includes the costs an employee incurs to maintain their usual residence and of consuming food and drink to go about their daily activities, which are considered to be 'living expenses' (paragraph 9 of the TR 2021/4). However, where an employee travels and stays away from their usual residence overnight in the course of performing their income-producing activities and incurs accommodation and food and drink expenses, these expenses will generally be deductible under section 8-1 of the ITAA 1997. For the purposes of TR 2021/4, an employee who stays away from their usual residence overnight in the course of performing their income-producing activities will be referred to as 'travelling on work' (Paragraph 10 of the TR 2021/4). To be deductible, the accommodation and food and drink expenses must have a sufficiently close connection to the performance of the employment duties and activities through which the employee earns income. It will not be enough to show some general link or causal connection between the expenditure and the production of income (Paragraph 16 of TR 2021/4). The occasion of the outgoing on accommodation and food and drink must be found in the employee's income-producing activities, rather than in the personal circumstances of where the employee lives (Paragraph 17 of TR 2021/4). Where the accommodation and food and drink expenses are incurred because the employee's personal circumstances are such that they live far away from where they gain or produce their assessable income, the occasion of the outgoing will not be found in the employee's income-producing activities (Paragraph 20 in TR 2021/4). An employee cannot deduct accommodation and food and drink expenses they have incurred where, due to their personal circumstances, they live far away from where they gain or produce their assessable income. These expenses are living expenses and are not deductible (Paragraph 25 in TR 2021/4). A deduction may be allowed in certain exceptional circumstances in relation to expenses incurred when commuting between home and place of work, such as: • Where the taxpayer's job is itinerant. Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances, and reimbursements for transport expenses outlines the indicators of being itinerant, such as travel is a fundamental part of employee's work, the employee has a web of workplaces in their regular employment, and employee has no fixed place of work. • Where the taxpayer is required to carry bulky tools or equipment to work. Where the nature of the employment creates a practical necessity, explained by work duties, to transport bulky equipment to and from a regular place of work (including to and from home to a regular place of work), the expenses of transporting that bulky equipment to and from that regular place of work may be deductible (Paragraph 79 in TR 2024/1). • Where the taxpayer is on call or stand by. In some limited cases, travel that occurs while an employee is 'on call' may be construed as part of the employment, rather than a private matter even if it is between home and a regular place of work (paragraph 70 in TR 2021/1); or • Where the taxpayer is required to attend a business trip on the way to or from work from home. | Detailed Reasoning - Application to your situation: Your employment contract for Position 1 stated that the location of your position with Company ABC was the City A office. You accepted the offer of Position 2, which meant that your reporting line requirements had changed, which involved you dealing with various time zones, but the terms of your employment contract had not changed. After accepting Position 2 you requested your working from home agreement to be varied to allow you to work from the Property in State B, which was approved on the condition that you complete a specified period of time in the City A office during a specified period of each year. During the ruling period to have made several return trips between your home in State B and State A, incurring the travel expenses. You are planning a further trip during the ruling period. We have considered the following when determining whether you are entitled to any deduction in relation to the travel expenses. • Position 2 had not existed in the City A office prior to it being offered to you while you were working and living in City A. Your working hours remained the same after you accepted the position despite your reporting changing from City A to the Country X. • You were able to undertake the activities in relation to your position despite you having to navigate various time zones during the periods you were in the City A office during each of the trips. • Given that Company ABC had created the position in the City A office, had offered it to you knowing that you lived and worked in City A at that time, it is reasonable to conclude that Company ABC had expected and anticipated that the role would and could be undertaken by someone in the City A office. • Company ABC's City A office has a hot desk approach, and you are able to use a desk in there whenever you are there. You also have access to a desk in Company ABC's office in another state if you were to travel there, or similarly in any of their other global offices if you travelled internationally. Therefore, you have accommodation provided by Company ABC in relation to a place for you to undertake your employment duties. • You have a home office at the Property that is not used for any private use. You undertake working from home as a matter of convenience so that you can carry out your employment duties there that would otherwise be done in the City A office. • It therefore cannot be viewed that your home office has become your regular place of work with the City A office continuing to be your regular place of work in accordance with your employment contract. • The Property is not viewed as a place of business. The City A office is listed as the location of your employment in your employment contract and Company ABC would normally accommodate you in the City A office or any of their other offices, but you have chosen to work from home and live at the Property. You don't see stakeholders in the Property in relation to your employment. You have a study at the Property where you undertake your employment activities while not in the City A office, but that is a home office and not a place of business. • You completed the duties involved with Position 2 for a period, from both the City A office and your City A home before making a request for a change in your working from home arrangement prior to the construction of the house at the Property being completed. Your request was approved with the condition that you would attend the City A office for two weeks during each quarter. • You chose to relocate to the Property knowing that there was not an office in State B and that you would be required to meet the specified periods working in the City A office in accordance with the revised working from home agreement. • It cannot be viewed that you had moved to State B due to any requirement of your employment with Company ABC, or at their directive, but due to personal reasons. The change in your living arrangement was undertaken at your own volition even though the position was located in City A and not based on any requirement made by Company ABC. • While you were living in City A and working in the City A office you had spent several days per week in the office and remaining works working at your home under Company ABC's hybrid working arrangement. You had travelled from your home to the City A office during this period. • After moving to State B you continued to work from home under the revised working from home agreement, travelling to the City A office in accordance with the revised working from home agreement. • You were allowed to work from home as a matter of choice for your convenience, similar to what had occurred when you were living in City A. It was not a requirement of your position and/or Company ABC that you worked from your home, but it was a personal choice available to you. Your work duties did not necessitate the travel, but the travel is instead explained by private circumstances such as a choice of where you lived. • Your travel between the Property and City A was undertaken outside of your working hours, either in the evening or night during workdays and/or during on the weekend. • You were not under the control or direction of Company ABC while you were travelling. While you may have worked on the days you travelled, and used your laptop to work from the airport, that does not convert your travel and trips to being part of your employment. The trips were undertaken so that you could complete your employment duties at the City A office, being your regular place of work. • You are not an itinerant worker with all of your activities being undertaken in the City A office when you travel there, or at your convenience at the Property. You are not required to work from your home but choose to do so and there is there is no web of workplaces. • You are not required to carry bulky equipment when you travelled, with the items you carry to and from the City A office being considered as being portable and not bulky. • While your work hours vary, you are not required to be on call. The accommodation and food expenses you incurred during the trips were incurred because of your personal circumstances of where you chose to live, with the requirement to travel to the City A office in accordance with the mandatory condition in your working from home agreement. They are viewed as living expenses that are private in nature. Based on the information provided, the travel expenses were incurred because of where you live, rather than your employment being the occasion of the expenses. The expenses can be explained due to where you choose to live in relation to where your regular workplace is located, being a necessary consequence of your choice to live in State B with your regular workplace being in State A. The duties attached to your role with Company ABC did not require you to travel to the City A office. The trips are attributable to your choice to move to State B whilst continuing to have a State A based role. Accordingly, the travel expenses are attributable to your personal circumstances, being your choice of where to live, rather than being a necessary incident of your employment. You do not meet the conditions for the limited exceptions to being able to claim deductions, such as being an itinerant employee, carrying bulky equipment or being on call. The trips can be characterised as being in relation to you travelling from your home to your regular work location with the travel expenses not arising out of the employment itself but were incurred due to your personal circumstances. Therefore, as the travel expenses are private in nature you are not entitled to claim a deduction for any of the amounts included in the travel expenses under section 8-1 of the ITAA 1997.