The Australian Taxation Office (ATO) has released the latest travel and meal allowance rates for the 2025–26 financial year under Taxation Determination TD 2025/4. These updated figures apply to employees who claim deductions for meal and travel expenses when working overtime or travelling for work, both domestically and overseas.
Understanding these updates is essential for business owners, HR/payroll teams, and employees who wish to claim deductions without needing to keep detailed receipts for every expense—as long as the claims fall within the “reasonable” limits.
What Are “Reasonable Allowances”?
Under Subdivision 900-B of the Income Tax Assessment Act 1997, employees can claim certain expenses without full substantiation (e.g. receipts for every meal or hotel night) if:
- The amount claimed is within the ATO’s “reasonable” limits, and
- The employee receives a bona fide allowance from their employer.
The 2025–26 ATO Determination TD 2025/4 outlines the acceptable amounts for:
Overtime Meal Expenses
For meals purchased when working overtime (without returning home), a reasonable amount can be claimed. The ATO publishes a flat rate allowance per overtime period.Domestic Travel Expenses
This covers:
- Accommodation
- Food and drink
- Incidentals (e.g. tips, laundry)
Different reasonable rates apply depending on:
- The employee’s salary level
- The travel destination (city or regional)
- Whether the employee is a truck driver, public office holder, or MP
Overseas Travel Expenses
Reasonable overseas rates are also provided based on:
- The country visited
- The employee’s salary band
- The purpose and duration of travel
Why This Matters to You
Failing to follow the ATO’s reasonable rates can lead to:
- Claims being rejected during an audit
- Extra documentation or evidence requirements
- Delays in processing your tax return or deductions
But with the right guidance, your business can confidently:
- Set travel allowances that comply with ATO standards
- Avoid over-claiming (which may trigger red flags)
- Support employees with clear, compliant travel policies
How Boa & Co. Can Help
At Boa & Co. Chartered Accountants, we help business owners, HR managers, and employees understand and apply these ATO rules correctly, especially when:
- Setting travel and meal allowance policies for your team
- Claiming deductions on employee allowances during tax time
- Reviewing your payroll setup or employment contracts
- Handling ATO audits or substantiation queries
Whether you’re a small business owner, a contractor working interstate, or a finance manager preparing staff reimbursements—we can guide you with practical, compliant solutions.
Speak with a Tax Expert Today
If you or your team travel for work or receive overtime meal allowances, it’s critical to ensure your allowances are within ATO guidelines for 2025–26. Let Boa & Co. help you simplify your compliance, avoid unnecessary paperwork, and claim confidently.
📞 Call us on 1300 952 286,
📧 Email [email protected], or
🌐 Visit www.boanco.com.au
to get tailored advice today.