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Reasonable Travel and Overtime Meal Allowance Rates for 2026–27

July 2, 2026

The Australian Taxation Office (ATO) has released Taxation Determination TD 2026/4, setting out the reasonable travel and overtime meal allowance expense amounts for the 2026–27 income year.

These rates are important for both employees and employers because they determine when taxpayers may be able to claim certain work-related travel and overtime meal expenses without keeping detailed receipts.

However, many taxpayers mistakenly believe these are automatic deduction amounts. They are not.

What Are the ATO’s Reasonable Allowance Amounts?

The ATO publishes annual reasonable amounts that apply to:

  • Overtime meal allowance expenses.
  • Domestic travel expenses, including accommodation, meals and incidentals.
  • Employee truck driver travel expenses.
  • Overseas travel expenses.

These amounts are used solely for the substantiation exception under the tax law. They do not create an automatic tax deduction.

Overtime Meal Allowance

For the 2026–27 income year, the ATO’s reasonable overtime meal allowance is:

$40 per overtime meal.

If an employee:

  • receives a genuine overtime meal allowance,
  • declares the allowance as income,
  • incurs deductible meal expenses, and
  • claims $40 or less,

they generally do not need to keep a receipt, although they must still be able to demonstrate that they actually incurred the expense.

Domestic Travel Allowances

The ATO has updated reasonable daily travel allowance amounts based on:

  • annual salary level;
  • travel destination; and
  • accommodation, meals and incidental expenses.

For example, employees earning $153,210 or less travelling to Sydney have a reasonable daily amount consisting of:

  • Accommodation: $230
  • Breakfast: $36.00
  • Lunch: $40.45
  • Dinner: $69.00
  • Incidentals: $25.40

This gives a total daily reasonable amount of $400.85.

The ATO also provides separate reasonable amounts for:

  • high-cost regional locations;
  • employee truck drivers; and
  • overseas travel destinations.

Remember: These Are Not Automatic Deductions

One of the most common misconceptions is that employees can simply claim the published reasonable amount without spending the money.

This is incorrect.

To claim a deduction, you must still:

  • actually incur the expense;
  • receive a qualifying travel or overtime meal allowance where required;
  • declare the allowance as income (unless specific exceptions apply); and
  • satisfy the normal deductibility rules under the Income Tax Assessment Act.

The reasonable amounts only remove the need to keep detailed written evidence if your claim does not exceed the published reasonable amount. If you claim more than the reasonable amount, you must retain full substantiation, including receipts.

Example

Sarah travels from Melbourne to Sydney for a two-day business trip. Her employer pays her a travel allowance that is included in her income statement.

She spends:

  • $35 on breakfast,
  • $38 on lunch,
  • $65 on dinner, and
  • $20 on incidentals.

As her expenses are below the ATO’s reasonable amounts and she satisfies the deductibility requirements, she may not need to keep receipts. However, she should still be able to demonstrate that she travelled for work and incurred the expenses.

How Gavin Ma & Co Can Help

Travel allowance claims can be more complex than many people realise. Whether you’re an employee claiming work-related travel expenses or an employer paying travel allowances, it’s important to understand the ATO’s substantiation rules.

At Gavin Ma & Co, we can help you:

  • Determine whether your travel expenses are deductible.
  • Review employee travel allowance arrangements.
  • Apply the correct ATO reasonable allowance rates.
  • Prepare accurate income tax returns.
  • Minimise the risk of ATO adjustments during a review or audit.

Obtaining professional advice can help ensure you claim the deductions you’re entitled to while remaining fully compliant with ATO requirements.

Disclaimer

This article provides general information only and does not constitute taxation, accounting or legal advice. The information is based on Taxation Determination TD 2026/4 and should not be relied upon as a substitute for professional advice. Individual circumstances vary, and you should seek advice before lodging your tax return or making taxation decisions.