Overnight work travel is one of the easier deductions to get wrong. A trip that mixes work and a holiday, a claim with no receipts, or an allowance left off the return can all lead to an ATO review and a bill for tax, interest and sometimes a penalty.
This guide explains what the ATO looks for when it checks travel claims for the 2025-26 returns being lodged now and the 2026-27 income year. It covers overnight travel rules, travel diaries for trips of 6 or more nights, the reasonable amounts in TD 2025/4 and TD 2026/4, and what happens if a claim is disallowed. Figures were checked against ATO pages and taxation determinations.
It is written for employees and sole traders who travel for work and want claims that hold up. If you have already received a letter or a call, read our guide on what to do when the ATO is reviewing your return.
Key takeaways
- You can only claim overnight travel when you stay away from home overnight for work; day trips do not qualify.
- Keep a travel diary for trips of 6 or more nights in a row, plus written evidence of each expense.
- Reasonable amounts are $36.00 breakfast, $40.45 lunch and $69.00 dinner in capital cities for 2026-27 (salary $153,210 or less).
- Claiming up to the reasonable amount only removes the receipt requirement if you received and declared a travel allowance.
- Keep records for 5 years from the date you lodge.
- Shortfall penalties start at a base of 25% for failing to take reasonable care.
ATO travel expense rules at a glance
| Topic | What the ATO says |
|---|---|
| Who can claim | Employees who travel and stay away from home overnight for work, with the same regular workplace |
| What you can claim | Accommodation, meals, incidentals and transport to the overnight location |
| What you cannot claim | Reimbursed or employer-paid costs, private portions, living at a work location |
| Travel diary | Generally needed for 6 or more nights in a row |
| Overtime meal amount | $38.65 (2025-26), $40 (2026-27) |
| Record keeping | 5 years from the date you lodge your return |
Source: ATO overnight travel expenses, ATO keeping travel expense records, TD 2025/4 and TD 2026/4, checked 9 October 2026.
What counts as a deductible overnight travel expense?
The ATO says you can claim travel expenses when you travel and stay away from home overnight while doing your job, such as working temporarily at a location other than your regular workplace. Your regular workplace stays the same, trips are short and you usually stay in short-term accommodation like a hotel.
Deductible costs include:
- Accommodation – hotels, motels, serviced apartments, caravans or places booked through digital platforms
- Meals and drinks while you are away overnight
- Incidentals – small work-related costs such as parking, bus fares or work use of the internet at your accommodation
- Transport to and from the overnight location, such as flights
You cannot claim costs your employer pays directly or reimburses, costs that come from personal choices such as living far from work, or costs incurred while you are effectively living at a work location. Daily travel between home and your regular workplace is private. Car costs for work trips are a separate claim; the cents per kilometre rate is 88c for 2025-26 and 91c for 2026-27, up to 5,000 km, as set out in the ATO D1 car expenses instructions.
What records does the ATO expect for travel claims?
According to the ATO travel records page, you need written evidence of each expense, such as a receipt. It must show the supplier name, the amount, what was bought, the date of the expense and the date of the document. You may add missing details by hand before you lodge.
The ATO is blunt: if you do not keep written records of your travel expenses, you cannot claim them. Keep them for 5 years from the date you lodge, as the ATO record keeping rules require.
When you need a travel diary
For trips of 6 or more nights in a row, you generally need a travel diary or similar record as well. For each activity, record where you were, what you were doing, when you stopped for meals, and the date with start and end times. Write entries as you go or soon after. Shorter trips do not need a diary, but one still helps if the ATO asks questions.
If you use an app or spreadsheet, the content matters more than the format. Our guide on how much you can claim without receipts explains where the ATO accepts other evidence, and our older article on claiming tax deductions without receipts covers the basics.
How do the reasonable amounts in TD 2025/4 and TD 2026/4 work?
Each year the ATO publishes reasonable amounts for travel and overtime meal allowances. TD 2025/4 covers 2025-26 and TD 2026/4 covers 2026-27. The amounts depend on your salary band and destination.
| Item (capital cities, lowest salary band) | 2025-26 (TD 2025/4) | 2026-27 (TD 2026/4) |
|---|---|---|
| Salary band | $148,250 or less | $153,210 or less |
| Breakfast | $34.75 | $36.00 |
| Lunch | $39.10 | $40.45 |
| Dinner | $66.65 | $69.00 |
| Incidentals (per day) | $24.50 | $25.40 |
| Accommodation Sydney | $223 | $230 |
| Accommodation Melbourne | $173 | $175 |
| Overtime meal | $38.65 | $40 |
TD 2026/4 sets out three conditions that people often miss:
- You must receive an allowance for the expense and declare it in your return. No allowance means no exception.
- The expense must still be deductible. You incurred it, were not reimbursed, and it relates to earning your income.
- Go over the reasonable amount and you lose the exception for the whole claim, not just the excess. You then need receipts for everything.
Reasonable amounts are not an automatic deduction. You claim what you spent, and if the ATO checks, it can ask for pay slips, diary notes and bank statements showing the trip and your spending. For overseas trips, accommodation must always be fully substantiated, and travel records are still required for 6 or more nights in a row. Our guide to ATO meal allowances covers overtime meals in more detail.
What is the ATO focusing on in 2026?
On 27 April 2026 the ATO announced its tax time focus areas: work-related deductions and expenses, and omitted income. Assistant Commissioner Anita Challen reminded taxpayers of the three golden rules: the expense must relate to earning your income, you must have paid for it yourself without reimbursement, and you must be able to back it up with records.
The ATO also said that people who have overclaimed in earlier years can lodge an amendment themselves or ask their tax agent to do it. For individuals the amendment window is generally 2 years from the day after the notice of assessment, per the ATO time limits page. Sole traders have 4 years for 2024-25 and later years.
For a wider view of what draws ATO attention, see our post on what triggers a tax audit and our guide to work-related tax deductions.
Which travel claims are most likely to be questioned?
The ATO examples on its overnight travel page show where claims fail:
- Day trips – meals on a trip with no overnight stay are not deductible, and any food allowance is still taxable.
- Long stays – moving to another city for a long project, or living at the work location, is not travel.
- Employer-paid costs – you cannot claim what your employer paid or reimbursed.
- Family travel – you can claim your own meals and a single-occupancy room rate, not costs for family members.
- Holiday plus work – only the work portion of airfares is claimable, and a mainly private trip with one seminar only allows the seminar fee.
Worked example: travel allowance within the reasonable amount
Priya earns $95,000 as an employee. In August 2026 she travels to Sydney for a work project, leaving home at 10am Monday and returning at 3pm Thursday. Her employer pays her hotel directly and gives her a meal and incidentals allowance of $150 a day for 4 days, which appears on her income statement ($600).
Under Table 1 of TD 2026/4 she can use: lunch and dinner Monday; breakfast, lunch and dinner Tuesday and Wednesday; breakfast and lunch Thursday. That is 3 breakfasts (3 x $36.00 = $108.00), 4 lunches (4 x $40.45 = $161.80) and 3 dinners (3 x $69.00 = $207.00), so meals total $476.80. Incidentals are 4 days x $25.40 = $101.60.
Priya spends $450 on meals and $40 on parking and bus fares. Both are below the reasonable amounts, so she can claim $490 without keeping every receipt. She still declares the $600 allowance, so her taxable income rises by $600 – $490 = $110.
She cannot claim the hotel because her employer paid it. If she had spent $520 on meals, she would have exceeded $476.80 and would need receipts for the full $520.
Rule of thumb: If you cannot show the ATO where you were, why you were there and what you paid, do not claim it. Receipts plus a simple diary beat any estimate.
What happens if your travel claim is disallowed?
If the ATO adjusts your claim, you repay the extra tax and interest. A shortfall penalty can also apply. The ATO penalties page sets the base penalty by behaviour:
| Behaviour | Base penalty (% of shortfall) |
|---|---|
| Failure to take reasonable care | 25% |
| Recklessness | 50% |
| Intentional disregard | 75% |
Penalties are generally reduced if you tell the ATO about the error yourself before it finds it, and can be increased by 20% if you obstruct the ATO or repeat the same behaviour. If a registered tax agent made the error after you gave them full and correct information, safe harbour may apply. If you need help preparing a correct return, see our individual tax return service.
Common mistakes with travel expense claims
- Claiming day trips: meals are only deductible when you stay away overnight.
- No diary for longer trips: 6 or more nights in a row generally needs a travel diary.
- Using reasonable amounts without an allowance: the exception only applies if you received and declared an allowance.
- Not apportioning private days: holiday days, family costs and private side trips are not deductible.
- Claiming employer-paid costs: anything paid directly or reimbursed by your employer cannot be claimed.
FAQ about ATO travel expense audits
Can I claim travel expenses without receipts?
Only in limited cases. If you received a travel allowance, declared it, and your claim for meals and incidentals is within the ATO reasonable amount, you do not need to keep every receipt, but you must still show the trip happened and what you spent. Accommodation overseas always needs receipts. Without an allowance, you need written evidence for every travel expense.
When do I need a travel diary?
The ATO says you generally need a travel diary or similar record if you are away for 6 or more nights in a row. It should show where you were, what you were doing, the date and the start and end times of each activity. Record entries as you go or soon after, and keep the diary in English.
What are the reasonable amounts for 2026-27?
They are set by TD 2026/4. For an employee earning $153,210 or less, the daily meal amounts in capital cities are $36.00 for breakfast, $40.45 for lunch and $69.00 for dinner, plus $25.40 for incidentals. Accommodation varies by city, for example $230 in Sydney and $175 in Melbourne. The overtime meal amount is $40.
Is a work trip with a holiday deductible?
Only the work part. If you add private days, bring family or take a private side trip, you must apportion and claim only the work-related portion. Where the private element is minor and incidental to a work trip, the ATO says apportioning may not be needed. A trip that is mainly private does not become deductible because you attend one seminar.
What happens if the ATO disallows my travel claim?
The ATO amends your assessment and you repay the extra tax, plus interest. A shortfall penalty may also apply, with a base of 25% for failing to take reasonable care, 50% for recklessness and 75% for intentional disregard. Telling the ATO about an error before it finds it usually reduces the penalty.
Talk to specialist before it costs you
15-minute discovery call. No obligation, no jargon.
Talk to a registered tax agent
If the ATO has asked about your travel claims, or you want them checked before you lodge, Nanak Accountants can review your records and help you respond. Call 1300 626 258 or contact our team.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO overnight travel and record keeping pages, TD 2025/4, TD 2026/4, the ATO penalties and amendment time limits pages and the ATO 27 April 2026 media release on 9 October 2026. Rates and thresholds change, so confirm the current position before acting.
