Taxation Determination TD 2023/3
Date of effect: 28 June 2023

What this ruling is about: 1. This Determination sets out the amounts that the Commissioner considers are reasonable (reasonable amounts) for the substantiation exception in Subdivision 900-B of the Income Tax Assessment Act 1997 for the 2023-24 income year in relation to claims made by employees for: 2. This Determination should be read together with Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses, which explains the substantiation exception and the way in which these expenses are able to be claimed. 3. The approach outlined in this Determination can only be used where you receive an allowance to cover the particular expenses you are claiming - for example, you received an accommodation allowance and are claiming accommodation expenses. This Determination is not relevant to you where you do not receive an allowance to cover your expenses. 4. The reasonable amounts only provide the maximum amount you can claim without being required to substantiate your expenditure (refer to paragraph 33 of TR 2004/6). If you rely on the reasonable amounts and the ATO checks your tax return, you will still be required to show: Reasonable amount for overtime meal expenses 5. For the 2023-24 income year, the reasonable amount for overtime meal expenses is $35.65.


Ruling: 1. This Determination sets out the amounts that the Commissioner considers are reasonable (reasonable amounts) for the substantiation exception in Subdivision 900-B of the Income Tax Assessment Act 1997 for the 2023-24 income year in relation to claims made by employees for: 2. This Determination should be read together with Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses, which explains the substantiation exception and the way in which these expenses are able to be claimed. 3. The approach outlined in this Determination can only be used where you receive an allowance to cover the particular expenses you are claiming - for example, you received an accommodation allowance and are claiming accommodation expenses. This Determination is not relevant to you where you do not receive an allowance to cover your expenses. 4. The reasonable amounts only provide the maximum amount you can claim without being required to substantiate your expenditure (refer to paragraph 33 of TR 2004/6). If you rely on the reasonable amounts and the ATO checks your tax return, you will still be required to show: | Reasonable amount for overtime meal expenses: 5. For the 2023-24 income year, the reasonable amount for overtime meal expenses is $35.65.

Examples: Example 1: calculation of reasonable amount for overtime meal expenses 6. Samantha works for the local government. She is asked to work overtime one night to complete an urgent task. Samantha works her 8-hour day followed by 4 hours of overtime. Samantha receives an overtime meal allowance of $25 pursuant to her agreement, which is shown on her payment summary. During the overtime, Samantha takes a rest break to get a meal and returns to continue her overtime. Samantha spends $30 on her meal. 7. Because Samantha has spent less than the reasonable amount for overtime meal expenses, she can claim a deduction for the $30 she spends and she is not required to substantiate the expenditure (for example, get and keep the receipt for the meal). 8. If Samantha's tax return is checked by the ATO, she may be asked to explain her claim for a deduction. To do this, Samantha would show that she: 9. If Samantha had spent more than the reasonable amount and wanted to claim the higher amount she spent, she would need to get and keep the receipt for the meal. 10. If Samantha's overtime meal allowance was not shown on her payment summary and she fully spent the allowance, she can choose to leave it out of her tax return and not claim a deduction for the meal she purchases when working overtime. Reasonable amounts for domestic travel expenses 11. The following reasonable amounts for domestic travel expenses do not apply to employee truck drivers [1] , office holders covered by the Remuneration Tribunal [2] or Federal Members of Parliament. [3] 12. Reasonable amounts are provided for 3 salary levels. Salary excludes any allowances received. Use Table 1 of this Determination if your salary is $138,790 or less. Use Table 2 of this Determination if your salary is between $138,791 and $247,020. Use Table 3 of this Determination if your salary is $247,021 or more. 13. Reasonable amounts are given for: 14. These amounts are shown for the following travel destinations: 15. The reasonable amount for accommodation applies only for short stays in commercial establishments like hotels, motels and serviced apartments. If a different type of accommodation is used (for example, a hostel or caravan park), the reasonable amount cannot be used even if you receive an allowance. 16. The reasonable amount for meals depends on the period and time of travel. That is, the reasonable amounts only apply to meals (that is, breakfast, lunch and dinner) that fall within the time of day from the commencement of your travel to the end of your travel that is covered by the allowance. For example, if you leave at 10:00 am on Monday and return home at 3:00 pm on Tuesday, you can apply the reasonable amounts for lunch and dinner on Monday and breakfast and lunch on Tuesday. 17. The reasonable amount for incidentals applies in full to each day of travel covered by the allowance, without the need to apportion for any part-day travel on the first and last day. 18. The reasonable amounts for domestic travel expenses, according to salary levels and destinations, for the 2023-24 income year, are shown in Tables 1 to 5 of this Determination as follows: | Example 2: calculation of reasonable amount for meals and incidental expenses - domestic 19. Svetlana is an accountant earning $145,000 a year. As part of her duties, she is required to travel to and work in Sale for 4 days and 3 nights each month. Svetlana's employer pays for her accommodation directly and gives her a meal and incidental allowance of $120 per day for the 4 days of travel. This allowance is shown on her payment summary. Svetlana's usual pattern is to eat 3 times a day, spending $20 on breakfast, $25 on lunch and $40 on dinner (that is, a total of $85 per day). Svetlana calculates the daily reasonable amount for meals and incidentals as follows: 20. Because Svetlana has spent less than the reasonable amount on meals and incidentals, she can claim a deduction for the $85 per day that she spends on meals and she is not required to substantiate the expenditure (for example, get and keep all of the receipts for the meals). Svetlana cannot claim anything for accommodation because her employer paid for it. 21. If Svetlana's tax return is checked by the ATO, she may be asked to explain her claim for a deduction. To do this, Svetlana would show that she: 22. If Svetlana had spent more than the reasonable amount on meals and incidentals and wanted to claim the higher amount that she spent, she would need to get and keep all of the receipts. 23. If Svetlana's meal and incidental allowance was not shown on her payment summary and she fully spent the allowance, she can choose to leave it out of her tax return and not claim any deductions for the meals and incidentals that she purchases while travelling and working in Sale. Reasonable amounts for domestic travel expenses for employee truck drivers 24. Reasonable amounts for domestic travel expenses for employee truck drivers [4] are given for meals (breakfast, lunch and dinner). The amounts are for all domestic travel destinations (that is, capital cities, regional and country centres). For the 2023-24 income year, the relevant amounts are as set out in Table 5a of this Determination: 25. The amounts for each of these meal breaks are separate and cannot be aggregated into a single daily amount. This is of particular importance for the days on which travel commences and ends, when some meals may not be deductible because they are not consumed in the course of work travel. A driver's work diary (as maintained for fatigue-management purposes) can be used to demonstrate when meal breaks were taken, since employee truck drivers may take meal breaks at different times of the day compared to other taxpayers. It should also be noted that amounts cannot be moved from one meal to another (for example, if the full amount for breakfast is not expended, it cannot be carried over to lunch or dinner). 26. The deduction allowed for each meal is the amount actually spent and not simply the reasonable amount specified in Table 5a of this Determination. Although the formal substantiation requirements do not apply for claims up to the reasonable amount, taxpayers should still be able to demonstrate the basis for their claims. Example 3 of this Determination shows how this can be done. 27. All accommodation expenses and incidental expenses (for example, the cost of a shower) incurred by employee truck drivers as part of work-related travel must be substantiated with written evidence (for example, a receipt). | Example 3: calculation of reasonable amount for meals - employee truck drivers 28. Glenn is an employee truck driver. He is required to drive from Melbourne to Adelaide. Glenn leaves Melbourne at 9:00 pm, sleeps away from home overnight in his truck cab, then drives back to Melbourne the following day. Glenn is paid a travel allowance of $55 for each day. These amounts are shown on his payment summary. 29. Glenn stops around midnight at a 24-hour truck stop in Horsham and spends $25 on food and drink. He then continues to Adelaide where he snacks on a sandwich and fruit that he brought from home, before having a sleep in the truck cab. In the morning, Glenn spends $20 on food and drink at the truck stop where he parked overnight. After the truck is unloaded and reloaded, Glenn heads to Bordertown where he stops for lunch. Here he spends $25 on food and drink. He then continues to Melbourne arriving at 5:00 pm, snacking on almonds and water that he brought from home as he drives. 30. Because Glenn spent less than the reasonable amount for each of dinner, breakfast and lunch, he can claim a deduction for the full amount that he spent on those meals ($70) and is not required to obtain and keep all of the receipts for these meals. He may still need to provide a reasonable explanation of the expenses and so the receipts could be useful in demonstrating a pattern (see paragraph 31 of this Determination). 31. If Glenn's tax return is checked by the ATO, he may be asked to explain his claim for these amounts. He would need to: Reasonable amounts for overseas travel expenses 32. If you are travelling overseas and are away from your usual residence for 6 or more nights in a row, you must still keep travel records even if you rely on the reasonable amounts and do not have to substantiate your expenses. Travel records may include ticketing information, diary entries or other information setting out the nature of your travel, the day and time it began, how long it lasted and where you travelled. 33. Reasonable amounts are provided for 3 salary levels. Salary excludes any allowances received. 34. Reasonable amounts are given for: 35. Any expenditure on accommodation overseas must be fully substantiated. 36. Reasonable amounts are shown for cost groups to which a country has been allocated. Table 9 of this Determination sets out the cost group to which a country has been allocated. 37. If you travel to a country that is not shown in Table 9 of this Determination, use the reasonable amount for Cost Group 1 in the table relevant to your salary range. 38. If you travel to 2 or more countries in the same day, use the cost group of the country that is in the higher cost group in determining the reasonable amount for that day. 39. The reasonable amount for incidentals applies in full to each day of travel covered by the allowance, without the need to apportion for any part-day travel on the first and last day. 40. The reasonable amounts for overseas travel expenses per day according to salary levels and cost groups for the 2023-24 income year are shown in Tables 6 to 9 of this Determination as follows: | Example 4: calculation of reasonable amount for meals and incidental expenses - overseas 41. Prashant travels to China on business for 2 weeks and is paid a travel allowance of $500 per day (made up of $250 for meals and incidentals and $250 for accommodation). Prashant's annual salary is $191,000. Prashant usually spends $250 per day on meals and incidentals and $300 per night on accommodation when travelling in China. Prashant calculates the daily reasonable amount for his overseas travel as follows: 42. Because Prashant has spent less than the reasonable amount on meals and incidentals, he can claim a deduction for the $250 per day that he spends and he is not required to substantiate the expenditure (for example, get and keep all of the receipts for the meals and incidentals). However because he has spent more than 6 nights away in a row, Prashant must keep travel records (such as a travel diary) for the 2 weeks he is in China. Prashant can claim a deduction for the $300 per day he spends on accommodation but he must fully substantiate this expenditure (by getting and keeping a receipt or other documentary evidence of the expenditure). 43. If Prashant's tax return is checked by the ATO, he may be asked to explain his claim for a deduction. To do this, Prashant would show he: 44. If Prashant's travel allowance for meals and incidentals were not shown on his payment summary and he fully spent the allowance, he can choose to leave this allowance out of his tax return and not claim any deductions for the meals and incidentals he purchases when travelling and working in China. His accommodation allowance will have been included on his payment summary as Prashant's employer must withhold from the accommodation allowance. [5] Date of effect 45. This Determination applies to the 2023-24 income year only. However, this Determination will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of this Determination (see paragraphs 75 to 76 of Taxation Ruling TR 2006/10 Public Rulings). Commissioner of Taxation 28 June 2023 © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).



What this Determination is about | If this Determination applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Determination. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Determination. | [Note: This is a consolidated version of this document. Refer to the Legal database ( ato.gov.au/law ) to check its currency and to view the details of all changes.] | Food and drink ($) breakfast 32.10 lunch 36.10 dinner 61.50 | High-cost country centres | Tier 2 country centres (see Table 5) | breakfast 28.75 lunch 32.80 dinner 56.60 | Food and drink ($) breakfast 34.95 lunch 49.35 dinner 69.20 | breakfast 32.10 lunch 32.80 dinner 63.95 | Food and drink ($) breakfast 38.90 lunch 55.00 dinner 77.00 | $195 or the relevant amount in Table 4 if higher | Cocos (Keeling) Islands (WA) | Congo Democratic Republic


Previous rulings: TD 2018/11 TD 2019/11 TD 2020/5 TD 2021/6 TD 2022/10
Related rulings: TR 95/18 TR 2004/6 TR 2006/10
Legislative references: ITAA 1997 Subdiv 900-B