When an employee is travelling overnight in the course of work and they receive a bona fide travel allowance they can potentially access relaxed substantiation rules by relying on the ATO’s reasonable rates. Similar rules can apply when employee receives an overtime meal allowance.
In very broad terms, someone in receipt of a bona fide travel or overtime meal allowance does not need to comply with the normal record keeping rules as long as their deductions do not exceed the ATO’s reasonable rates for that year.
Many practitioners would be aware that for the 2018 income year the ATO changed its approach for truck drivers by replacing specific reasonable amounts per meal with a combined daily reasonable amount. The ATO has now changed its approach again, moving back to an amount per meal. For the 2018 income year this is $24.25 for breakfast, $27.65 for lunch and $47.70 for dinner.
The ATO has also confirmed that even though someone might qualify for the relaxed substantiation rules, there is still a requirement for them to gather and retain evidence to support the deductions being claimed, including the fact that they incurred the expenses personally, they have not been reimbursed, the fact the expenses were incurred while travelling overnight and the amount incurred.
While the ATO does not expect these employees to have receipts or invoices for every expense, the ATO has indicated that employees should maintain at least some receipts as part of their records. For truck drivers travelling a similar route on a regular basis, the ATO suggests keeping receipts for a representative period of 3 months.