Overtime Meal Expenses

Generally meals, snacks and drinks bought and consumed while working are considered to be private and non- deductible.

An exception to this rule applies where an employee is paid an overtime meal allowance under an industrial award. In this situation the employee is taxed on the overtime meal allowance received and allowed a deduction for the overtime meal expenses incurred (subject to written receipts).

If an overtime meal allowance is received and not folded into normal salary then an overtime meal deduction can be claimed without substantiation subject to:

• The amount claimed per meal does not exceed the Commissioner’s reasonable amount of $28.20 per meal for the 2015 income year (see TD 2014/19).
• The amount claimed per meal was actually expended by the employee. So, if the employee only spent $5 on some noodles, they should only be claiming $5 as a deduction for the meal.
• In an audit the taxpayer will still need to show the basis of their claim and provide some evidence (normally some receipts or credit card statements) to demonstrate that the expenses were actually incurred.
• There are a couple of traps. Firstly the meal allowance must be paid under an industrial award. It cannot just be a meal allowance paid by an employer. Secondly, if the employee wants to claim more than the Commissioner’s reasonable amount of $28.20 per meal, they need to substantiate the full amount of the deduction with receipts.