You can claim a deduction for overtime meal expenses you incurred if you worked overtime and you received a bona fide overtime meal allowance from your employer which was paid under an industrial law, award or agreement.
You can claim only the amount of expenditure you incurred.
If your claim is more than $22.60 per meal, you will need written evidence.
An amount for overtime meals that has been ‘folded in’ (for example, under a workplace agreement) as part of your normal salary or wages income is not considered to be an overtime meal allowance.
Amounts received as overtime meal allowances must be included as income on your tax return, subject to the note below.
Note
If your award overtime meal allowance was not shown on your payment summary and was not more than $22.60 for each meal, you do not have to include the amount on your tax return provided that you have fully expended the allowance and do not claim a deduction for overtime meal expenses.
Evidence to support expenses
If you incurred work related overtime meal expenses and want to claim these as a deduction, the nexus has to be established.
If you are selected for a review or an audit, you may be asked to provide the following records to the ATO.
- Details of your employment duties and an explanation of the requirements to incur overtime meal expenses for work related purposes
- Written evidence that you received overtime meal allowances in addition to your normal salary and wages, which were paid under an industrial award, law or agreement
- Letter from your employer including contact name and telephone number:
- confirming why you were required to work overtime in the course of carrying out your employment duties
- details of any relevant reportable fringe benefits, or reimbursement to compensate you for expenses incurred, and
- details of specific overtime meal allowances paid to you.
Substantiation
Substantiation does not apply where you received a bona fide overtime meal allowance and the deduction does not exceed the Commissioner’s reasonable allowance ($22.60 per meal for 2007-08 income year). However, you may still be required to show the basis for determining the amount of your claim and that the expense was actually incurred for work-related purposes.
The evidence the ATO may request in these situations will vary according to the individual circumstances and the nature of the expense.
Where you received a bona fide overtime meal allowance, and the deduction exceeds the Commissioner’s reasonable allowance, substantiation applies. To substantiate the deduction you will be asked to keep receipts or other similar records.
About The Author
Warren Kruger is an Australian Tax Specialist and Advisor.
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