You can generally claim a deduction for the cost of transport relating directly to your work-related activities.
Transport costs include public transport fares and the running costs associated with using motor vehicles, motor cycles and bicycles, etc., for work-related travel. They do not include accommodation, meals and incidental expenses.
The treatment of some typical transport journeys incurred by employees when travelling is discussed in this article, but not the method in which you can claim your deduction nor evidence requirements, as these vary depending on a range of other circumstances.
Contact us now on 1300 554 948 or on email@compassdirection.com.au to discuss what methods to make your claim are available for your situation and also how you can evidence your claims.
A deduction is not allowable for the cost of travel by an employee between home and his or her normal work place as it is generally considered to be a private expense.
Collecting mail, stationery supplies, general resources and performing other incidental tasks while travelling between the employee’s home and his or her regular place of employment does not, of itself, transform private travel into work-related travel. The cost of this travel is not allowable.
A deduction is allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work.
Example: Charlie, a carpenter, uses his car to travel to the work site each day in order to transport his power saw, nail gun and compressor, ladders, work horses and other equipment. There is no secure place on site for storage of these items. Because of the bulk of this equipment, Charlie would be entitled to claim a deduction for his car expenses.
An employee is not entitled to a deduction for transport costs if, as a matter of convenience, work is performed at home and items such as tools, papers, books and material (whether bulky or not) are transported between home and work for that purpose.
A deduction is allowable for the cost of travel from an employee’s normal work place to other work places. The cost of travel from the alternative work place back to the normal work place or directly home is also an allowable deduction. This travel is undertaken in the performance of an employee’s duties. It is incurred in the course of gaining assessable income and is allowable as a deduction.
Example: Mary, an aged-care worker, travels from her normal aged care facility to a regional administrative centre for a meeting. After the meeting, she travels directly home. The cost incurred in travelling from the normal aged care facility to the administrative centre and then directly home is an allowable deduction.
A deduction is allowable for the cost of travel from home to an alternative work place. The cost of travel from the alternative work place to the normal place of employment or directly home is also an allowable deduction.
A deduction is allowable for the cost of travelling directly between two places of employment or between a place of employment and a place of business. This is provided that the travel is undertaken for the purpose of engaging in income-producing activities.
Example: Kirsten, a lawyer, works at two branch offices each day. The cost of travel from one office to another is an allowable deduction as the cost is incurred in travelling between two places of employment
If an employee lives at one of the places of employment or business a deduction may not be allowable as the travel is between home and work. It is necessary to establish whether the income-earning activity carried on at the person’s home qualifies the home as a place of employment or business. The fact that a room in the employee’s home is used in association with employment or business conducted elsewhere will not be sufficient to establish entitlement to a deduction for travel between two places of work.
A deduction is not allowable for the cost of travel between a person’s home, at which a part-time income-producing activity is carried on, and a place of full-time employment unless there is some aspect of the travel which is directly related to the part-time activity.
Example: Rebecca, an employee call centre operator, teaches guitar at her home on Monday evenings. The cost of travelling from the call centre to home is not an allowable deduction. It is a private expense rather than an expense incurred in deriving assessable income.
On call employees are those employees who are required to attend the workplace on short notice due to factors such as to cover an absent employee’s activity at the workplace, or attend to undertake imperative repairs to machinery or equipment. Generally, the employee will be telephoned at home and asked to attend the workplace for the shift. The cost of travelling between home and the workplace is not allowable as a deduction.
Example: Mark, an engineer, was contacted after regular hours to attend to machinery breakdowns. Although he may be required to travel to work in response to a call while on standby, this would not ordinarily alter the private character of that travel, making the cost of this travel not allowable.
Article adapted from ATO Tax Ruling TR95/14 – Income tax: employee teachers – allowances, reimbursements and work-related deductions. URL: http://law.ato.gov.au/pdf/pbr/tr1995-014.pdf
Sighted: 14 September 2015
Disclaimer: The information contained in this article is general in nature without taking into account any particular person’s situation. You should consider whether the information is appropriate to your situation and it should not be relied upon as a substitute for specific professional advice.
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