The ATO has released updated figures for daily travel allowances, which apply for the current financial year ending 30 June 2019.
Travel allowances can be paid by an employer (e.g. a practice trust) to an employee (the medical or dental practitioner) to cover costs of accommodation and/or meals while travelling for business involving at least one night away from home. Both domestic and international travel is covered.
The advantages of being paid a travel allowance are as follows:
There is no need to substantiate spending on items covered by the allowance. This means it is not necessary to keep receipts, making record-keeping simpler. The allowance amount might also exceed actual expenditure. For example, high income earners can be paid a travel allowance for Melbourne or Sydney of $448.40 per day ($265 accommodation plus $183.40 for meals and incidentals).
The allowance is deductible to the employer and does not appear on the employee’s PAYG Payment Summary or tax return.
The ATO ruling, TD 2018/11, contains tables specifying allowance limits for various domestic and international locations. Here is a link to the full text of the ruling:
Should you have any questions regarding the payment of travel allowances, please contact our office.