Accountant Discloses $37 Meal Expense That Workers Can Claim on Tax Without a Receipt, According to the ATO

Tax Deductions for Overtime Meal Expenses in Australia: What You Need to Know

Miriam Holme, an established accountant and founder of Fab Tax Accountants, has shared valuable insights regarding tax deductions for overtime meal expenses available to Australian workers. While generally food and drink costs are not tax-deductible, the Australian Taxation Office (ATO) has specific provisions that allow eligible individuals to claim expenses related to meals consumed while working overtime.

Meal Deductions Without Receipts

For the income year 2024-25, individuals eligible for an overtime meal allowance can claim up to $37.65 per meal without providing receipts. Holme emphasised the importance of this deduction for workers who receive a legitimate meal allowance as part of their workplace agreement or award.

“Workers under various awards typically receive a genuine meal allowance,” Holme stated. The stipulation is that if they spend money on a meal during overtime, they can claim that amount without needing to keep a receipt, provided it is noted in their payment summary.

A Quick Overview of Eligibility

1. Overtime Meal Allowance: The allowance must be explicitly included in your employment agreement or award.
2. No Receipt Required: If your meal expense does not exceed $37.65, receipts are not necessary.
3. Personal Purchase: The meal must be purchased by the employee; expenses can’t be claimed for employer-provided meals or reimbursements.
4. Working Overtime: The meal must be consumed during your overtime hours.

Example Scenario

To illustrate how this works, consider a scenario involving a hypothetical employee. After completing an 8-hour shift, they are asked to work an additional 4 hours of overtime. This worker receives a meal allowance of $25, as per their agreement. If they choose to spend $30 on a meal during overtime, they can claim this total amount as a deductible expense without needing to retain a receipt since it is below the $37.65 claim limit.

However, if they spent more than this limit and wished to claim the full amount, a receipt would be necessary to substantiate the claim.

Importance of Awareness

Holme expressed her surprise at how many clients were previously unaware of these valuable deductions. “We make it a point to check every client’s records to ascertain if they are eligible for a meal allowance,” she noted. It’s prudent for employees to review their payslips or consult their workplace agreements to confirm their entitlement to meal allowances when working overtime.

For full details regarding the ATO’s meal allowance rules, taxpayers can visit the official ATO website.

Staying informed about such deductions not only ensures that employees maximise their tax returns but also educates them on their financial rights.

Conclusion

Understanding the nuances of tax deductions, particularly for overtime meal expenses, can significantly benefit Australian workers. By being aware of the available allowances and conditions, employees can make informed decisions that positively impact their tax situations. As we approach the new financial year, it’s advisable for employees to revisit their financial records and engage with accounting professionals to ensure they’re claiming all their entitled deductions.

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