When planning a trip away, many people question whether their holiday is tax deductible. What if you are combining a family vacation with a business trip – how does this work for tax purposes?

As a general rule, travel expenses are only tax deductible when they are a part of you performing your duties and earning assessable income.

Deductible travel expenses include the cost of driving your car, flying, catching a train, taxi or bus. Accommodation, meals and incidental expenses are also generally deductible when you are required to be away from home overnight.

You will need to keep receipts and evidence of your expenses, however there are some exceptions for accommodation, meals and incidentals.

A travel diary is recommended to record your travel movements, particularly if each trip takes you away from home for six or more nights in a row. It’s important to record where you were, what you were doing and the times the activities started and ended.

A diary will help you work out the work-related and private elements of your trip. You will need to apportion your expenses if they are partly private in nature. For example, if you take your partner or children with you when you travel for work, or only a period of the travel is for work, you cannot claim the cost of any travel you incur for your family members or for the days that you aren’t technically working.

Just remember, receiving a travel allowance from your employer does not automatically entitle you to a tax deduction. For example, if any travel expenses are reimbursed from your employer, you cannot claim a deduction for them. Generally, you can’t claim for normal daily trips between home and work, this is private travel.

This advice is general and doesn’t take into account your personal circumstances, so speak with your accountant for more specific information.


Karen Peall is the Executive Manager of Lyons Judge Bundaberg and has more than 20 years’ experience in accounts and taxation.