As tax time is fast approaching we will be outlining common work-related expenses for Truck Drivers. Short-haul or local Truck Drivers usually return home at the end of a day’s work. A long-haul Truck Drivers usually sleeps away from home in the course of driving the truck.
When you can make a claim
In most situations, you can claim deductions for work-related expenses if:
- You incurred the expense in doing your job
- The expense is not private – for example, travel to and from work
- You can show you incurred the expense by producing receipts or other written evidence, unless an exception applies.
Claim the correct amount for the year
- You must have incurred the expense in the year you are claiming the deduction, unless the expense relates to the decline in value (depreciation) of tools or equipment you purchased
- When claiming the decline in value of your tools or equipment, you must have used them or had them available for use in the year you are making the claim
- You can only claim that part of an expense that relates to your work.
The most common allowances paid to an employee truck drivers are:
- Overtime meal allowance
- Travel allowance (meal allowance). In the trucking industry, a travel allowance paid when you have to sleep away from home is sometimes referred to as a living-away-from-home allowance.
- A travel allowance is an amount you receive that could reasonably be expected to cover your meals and expenses incidental to your work-related travel.
- A token amount you receive as a travel allowance that does not reasonably cover your travel costs is not accepted as being a travel allowance.
- If you receive a cents per kilometre allowance, you may receive a higher cents per kilometre rate when you must stay away from home overnight. The increased cents per kilometre rate is not accepted as being a travel allowance.
Travel allowance is different to living-away-from-home allowance. Living-away-from-home allowance is paid to cover your additional accommodation and meal costs when you live in a second home because your employer requires you to work away from your usual home for a long period to do your work. Living-away-from-home allowance is usually subject to fringe benefits tax and is not shown on your payment summary.
If your living-away-from-home allowance appears on your payment summary and is paid to you to cover meal expenses because you have to sleep away from home, you should treat it as a travel allowance.
Regardless of how much allowance you receive as a Truck Drivers, you can only claim a deduction for the expenses you paid – that is, if you paid $80 in work-related expenses and you received a $100 allowance for those expenses, you can claim only $80.
If your employer or any other person reimburses you for expenses you have actually incurred, the payment is called a reimbursement. An allowance is not considered to be a reimbursement. You cannot claim a deduction for expenses you incur if those expenses are reimbursed to you by your employer – you do not include a reimbursement on your tax return. If you claim your motor vehicle expenses from your employer using the cents per kilometre method, the amount you receive is considered to be an allowance.
Troy had to use his car to meet another truck driver who had to stop driving his truck 20 kms away from the depot due to a mandatory long break. The driver returned Troy’s car to the depot while Troy drove the truck.
Troy was paid for the 20 kilometres he used his car, based on the cents per kilometre rate plus the bridge toll he incurred. Even though Troy received a payment for using his car, the payment is not a reimbursement but an allowance, because it is only an estimate of the cost of using the car. As a result, Troy must show the amount he received on his tax return at item 2.
The amount Troy receives from his employer to cover the cost of the bridge toll is a reimbursement, and does not have to be included on Troy’s tax return.
Troy can claim a deduction for these car expenses at item D1 Work-related car expenses on his tax return.
Claiming overtime meal expenses
Generally, meals, snacks and drinks you buy and consume while on the job are considered to be a private expense for which you cannot claim a deduction. If you are working overtime, you can claim a deduction for overtime meal expenses if you:
- purchased a meal when you worked overtime
- received an overtime meal allowance under an industrial award for working overtime.
You must include the allowance you receive on your tax return if you:
- have an overtime meal allowance shown on your payment summary
- are claiming a deduction that is different from the allowance amount and the allowance is not shown on your payment summary, or
- received an allowance in excess of the reasonable allowance amount.
Most industrial awards roll the overtime meal allowance into the normal salary or wage and it is not included as a separate allowance on your payment summary. In this situation, you cannot claim a deduction for overtime meals.
We set the reasonable allowance amount for your circumstances in an annual taxation determination, which explains:
- when you don’t need evidence of your expenses
- the way in which you can claim them.
If the overtime meal allowance is not shown on your payment summary and was not more than the reasonable allowance amount, you do not have to show it on your tax return if you:
- spent the entire allowance on expenses for which you can claim a deduction, and
- are not claiming the deduction.
- Keeping records of your overtime meal expenses
You must keep records, and these can be:
- receipts, or other written evidence of your expenses, including receipts for depreciating assets you have purchased
- diary entries you make to record your small expenses ($10 or less) totaling no more than $200, or expenses you cannot get any kind of evidence for, regardless of the amount
- payment summaries showing items such as overtime meal allowances
- pay slips which record allowances
- a letter from your employer recording your allowances.
Evidence to support your claims:
If your total claims add up to more than $300 (excluding claims for car, meal allowance, award transport payments allowance and travel allowance expenses), you must keep written evidence, such as receipts. Your written evidence must show you incurred the full amount of your claim, not just the amount over the first $300.
If the total amount you are claiming is $300 or less, you do not need to keep receipts, but you must be able to show how you worked out your claims.
- Types of records
- Written evidence
Written evidence can be:
Invoices, receipts or other documents showing your travel expense and travel allowance details. If it is too difficult to get a receipt for a meal you purchased – for example, if you purchase a meal from a vending machine – you can keep diary entries as your proof of purchase receipts or other documents (such as diary entries) for air, bus, train, tram and taxi fares, bridge and road tolls, parking and car-hire fees.
A travel diary is a document that shows the dates, places, times and duration of your activities and travel. Each diary entry must show the date you incurred each expense, the name of the supplier, and the amount and type of expense. To find out more about record keeping click here.