Allowances are separately identified payments made to an employee for:
- working conditions - for example, danger, height or dirt
- qualifications or special duties - for example, first aid certificate or safety officer
- expenses that can't be claimed as a tax deduction by the employee – for example, normal travel between home and work
- work related expenses that may be claimed as a tax deduction by the employee - for example, travel between work sites.
Allowances that have been folded in to normal salary or wages are not treated separately for withholding.
- car, travel and transport allowances, and reimbursements of car expenses (calculated by reference to the distance travelled by the car, such as 'cents-per-kilometre' allowances)
- award transport payments (paid under an industrial law or award that was in force on 29 October 1986)
- tool, clothing and laundry allowances
- dirt, height, site, first aid and risk allowances
- meal and entertainment allowances.
If you received a travel or an overtime meal allowance paid under an industrial law, award or agreement, do not show it on your tax return if:
- you spent the whole amount on deductible expenses
- it was not shown on your payment summary
- it does not exceed the Commissioner's reasonable allowance amount.
You cannot claim deductions for expenses that you paid for with that allowance. For more information, see Taxation Determination TD 2019/11 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2019–20 income year?