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Overtime meal expenses disallowed because no allowance received


A taxpayer has failed in claiming deductions for overtime meal expenses.



The Administrative Appeals Tribunal (AAT) denied his appeal because he was not paid an allowance under an industrial agreement.

The AAT noted that whether overtime meal expenses are deductible according to the tax law depends on whether the taxpayer receives a food or drink allowance under an industrial instrument. The AAT agreed with the Commissioner of Taxation that the taxpayer had not received an allowance of this kind and, in fact, had not received any allowance at all. Whilst his salary had been increased to compensate him for the higher costs, this was not enough to justify a deduction.

This decision could be applied to many other allowances – e.g. travel, tools and telephone.

It should be part of future wages and salary review for any employee to consider whether “reimbursement” is a better alternative to an allowance.  There will be greater obligations on the employer, but overall it can be a better outcome.