Paperless

In Australia, businesses are encouraged to maintain digital records for expenses, with the Australian Taxation Office (ATO) accepting electronic versions of receipts and invoices. As per ATO regulations, digital records must meet specific criteria for authenticity and accessibility, including:

• Digital receipts: Acceptable formats include PDF, image, and email receipts.
• Storage and access: Documents must be stored for at least five years, and the business must be able to produce them upon request by the ATO.

For more detailed information on digital record-keeping, refer to the ATO guidelines on electronic record-keeping.

Mileage

Australia has strict rules regarding mileage reimbursement for employees using their personal vehicles for business purposes. Mileage rates are set by the ATO and change annually. For the 2023-2024 financial year, the ATO’s recommended rate is:

• 66 cents per kilometre for motor vehicles (cars, utes, and vans).

This reimbursement is tax-free, provided it is substantiated with a logbook or a similar record that details the business purpose of the travel. If the mileage reimbursement exceeds the ATO rate, the excess amount may be taxable.

The maximum amount that employers can reimburse tax-free is evaluated by the ATO and reviewed at the start of each income year. Recent amounts are as follows:

2024-25: 88 cents per kilometer
2023-24: 85 cents per kilometer
2022–23: 78 cents per kilometer
2020–21 and 2021–22: 72 cents per kilometer

Complete ATO guidelines on mileage and motor vehicle deductions can be found here.

Per diem

In Australia, there is no official government-set per diem rate. However, companies are encouraged to set their own reasonable allowances based on industry standards or the ATO’s guidance on travel allowances. These allowances typically cover accommodation, meals, and incidental expenses.

To ensure compliance, per diem amounts must reflect actual business expenses incurred, and any unused portion should not be reimbursed to employees. The ATO allows businesses to provide employees with travel allowances, but these must be reported on the employee’s payment summary and are subject to tax if not spent on legitimate business expenses.​​

What the ATO considers reasonable amounts for travel changes based on location or business travel and the travelling employee’s salary. Below, see an example of reasonable amounts for domestic travel expenses for employees who make $143,650/year or less.

The full taxation determination can be viewed here.

Table 1: Reasonable amounts for domestic travel expenses – employee’s annual salary $143,650 or less (2024-25)

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $143,650 to $255,670 (2024-25)

Meal allowances

Meal allowances in Australia are typically reimbursed based on the actual expenses incurred during business-related travel. The ATO provides guidelines on what constitutes a reasonable meal expense. Employees must keep receipts and documentation to substantiate their meal expenses.

The ATO does not specify a fixed rate for meal allowances, but any reimbursements above the actual cost may be subject to taxation. Meal allowances are usually tax-free if the employee is traveling overnight or at least 100 kilometers away from home or their regular place of employment.

For more details on meal allowances and substantiation requirements, refer to the ATO’s meal expenses guidelines.

Sales tax rates

In Australia, the Goods and Services Tax (GST) is a 10% tax applied to most goods, services, and travel expenses. For businesses, GST-registered entities can claim back the GST paid on business-related travel expenses, including hotel accommodation, meals, and transportation.

The GST applies to both domestic and international travel, with specific provisions for overseas travel and reimbursements. Employees traveling for business can generally claim back the GST on their travel expenses if they are registered for GST.

For more information about the GST on travel expenses, refer to the ATO’s GST page.