Personal Income Tax

When Does Work Travel Qualify For Tax Deductions?

If you are an employee and your work is itinerant in nature (changing the location of work), you can claim a deduction against the cost of travelling between your workplaces and your home. Your home only qualifies as a workplace if you do itinerant work there.

The Tax Office has put forward factors that help determine whether or not you carry out itinerant work:

  • The nature of your work warrants travelling, which is not just for the purposes of convenience on your part or your employer’s part.
  • You shuttle between different workplaces daily.
  • Travelling from one site to the other is a continuous occurrence.
  • You cannot complete work unless you move to another work site.
  • The exact work site for the day is usually uncertain.
  • Your employer offsets your travel expenses with a monthly allowance dedicated to paying for your constant movements.

Limited flexibility

While the factors listed above give a semblance of significant flexibility, a recent decision taken by the Administrative Appeals Tribunal (AAT) adds extra considerations that limit that flexibility somewhat, in relation to when an employee can claim on itinerant work.

A certain Mr. Hill made claims for deductions for some work-related travel expenses such as meals and accommodation on the premise that his job was itinerant in nature. Looking at Mr. Hill’s job history and pattern might suggest he had a legitimate claim. Mr. Hill’s different roles and job engagements had him working in several locations, usually short-term, and seasonal, all in the mining industry.

Mr. Hill and his wife had a house, which he had claimed was their usual abode. However, he failed to state that they also owned a motorhome that he and his wife stayed in at rented caravan sites close to the mines where he worked. It was discovered that the couple often returned home in between each job, sometimes for weeks. In considering the factors provided by the ATO, the AAT concluded that Mr. Hill cannot be classified as an itinerant worker, and therefore not entitled to claim deductions.

The AAT’s reasons were that:

  • The taxpayer was not required by any employer to work at different sites. Therefore, travelling was not an essential requirement of his job.
  • The taxpayer's responsibilities did not start from home or in his motorhome parked at the different caravan parks.
  • At the completion of each job, he always returned home, most times for three weeks before moving on to a new workplace.
  • Hill didn’t need different work sites to complete his work, as he had a measure of certainty over the location of each workplace.
  • Hill was not required by his employers to shuttle between various workplaces as part of his core responsibilities. The only travel required him traversing his motorhome location to the same location throughout the duration of each job.
  • No employer paid him any allowance that recognized travelling as an integral means to execute his job functions.

The AAT further remarked as follows:

  • Hill decided on a lifestyle which involved living in his motorhome and working in regional towns.
  • His job functions while there did not require him travelling between worksites.
  • All travel by the taxpayer was to accept a new job in a new location and not a consequence of his job functions.
  • Each job only qualifies as a fixed place of employment with uncertainty over the length of time he would spend at the job.

The take-away

In recent years, the Tax Office has set its sights on incorrect claims for work-related travel expenses such as car expenses, accommodation, and flight expenses. The ATO has further stressed that it will keenly supervise work-related deductions that are higher than they ought to be. As Mr. Hill’s case points out, your client’s entitlement to claims any work-related travel deductible will depend on their specific situations.


Latest Blog

« »

Welcome to my blog

Welcome to my blog



Recently somebody asked me how many qualifications and post nominals I had. I replied that I don’t know – I’ve lost trac...


Ben, Have you invented any new words lately?

A correspondent has asked if I have invented any new words. Indeed I have. Procreastation: The tendency to put off doing...


Ben, what is the greatest waste of taxpayers money?

Thank you for asking this important question. The greatest waste of taxpayers money in history is without doubt the new...


Ben, What is the Mac tax? Is it federal or state?

Thank you for that interesting question. The Mac tax is a tax that is imposed neither by the federal nor the state gover...