Work-related travel expenses: how to track them and what to claim for your business

Many business owners and employees travel, so you’ll likely need to record work-related travel expenses. The good news is that business travel expenses are often tax deductible, so tracking them can help you save money on taxes. Tax deductions can lower your taxable income, so you could pay less in taxes overall.

This guide covers the Australian rules for businesses (sole traders, partnerships, companies and trusts) claiming travel by owners and employees, checked against ATO guidance on 8 October 2026. It covers:

• What are work-related travel expenses?
• Business travel expenses you can claim
• What you can’t claim
• Records you need to claim business travel expenses
• How to track work-related travel expenses

What are work-related travel expenses?

Work-related travel expenses may include costs for business travel, accommodation, or meals. However, not all travel expenses qualify as work-related.

Many small businesses run into issues with the Australian Taxation Office (ATO) when they deduct travel expenses. It can be confusing to determine what counts as a qualified business travel expense and what doesn’t.

One of the key issues employers run into is understanding the line that separates personal and business expenses. The ATO’s guidance on business travel expenses sets out which expenses qualify.

Business travel expenses you can claim

Your business can claim travel expenses when you or your employees travel for business purposes, whether the trip takes a day, one night or many nights. To claim overnight expenses such as accommodation and meals, the traveller must have a permanent home elsewhere and the business must require them to stay away from home overnight.

Some of the common travel expenses businesses can deduct are costs for:

• Car hire fees, and the fuel, tolls and parking for the hire car
• Train, tram and bus fares
• Taxi or ride-sourcing fares
• Airfares
• Accommodation
• Meals, if you are away overnight

If your business is entitled to GST credits, claim the GST-exclusive amount of each expense as the income tax deduction.

What you can’t claim

You can’t deduct travel expenses that aren’t necessary for conducting business. In other words, you can’t deduct your holiday. However, you can deduct the travel costs to go to another city and meet with a client. In that case, you may deduct transport, hotel, and even some meal costs.

Other types of non-deductible travel expenses include:

• Sightseeing and entertainment while on a business trip
• A holiday or visit to family or friends combined with the business travel
• Visas, passports and travel insurance
• Souvenirs and gifts
• The costs of a family member who comes on the trip
• Travel costs because you are relocating or living away from home

If you combine a business trip with holiday, then you can only claim the portion of the trip that was for business. For example, if you live in Perth and attend a work conference in Sydney, you can claim those costs. But, if you decide to stay in Sydney a few days after to sightsee, then the extra days and money don’t qualify. If the main purpose of the trip is business and the private part is incidental, the ATO says the return airfare doesn’t need to be split.

To qualify part of those expenses, you’ll need to show how you separated the work from personal costs.

Records you need to claim business travel expenses

Businesses may cover employees’ work-related travel expenses through travel allowances. The ATO publishes reasonable amounts each year that affect how allowances are taxed and what records employees need, which we cover later in this post.

To claim travel expenses, you’ll need to keep records. If you can prove something was a qualified business travel expense, you should have no issues with your tax return.

Businesses should keep these records for five years:

• Meal and other receipts
• Tax invoices
• Ticket stubs
• Boarding passes
• Travel diaries

You may be able to show proof that something is a work-related travel expense through:

• Signed contracts
• Meetings with documentation
• Proposals
• Email confirmations

How to track work-related travel expenses

Businesses can cover work-related travel expenses for employees and track them. To do this, you generally have three options:

• Pay for expenses directly with a company card or business bank account
• Set up a reimbursement program for travel expenses
• Pay employees a travel allowance

The business must actually pay for the expense to claim it. If the business pays directly or reimburses the employee, the employee can’t also claim it in their own tax return. A travel allowance works differently: it is generally subject to PAYG withholding (unless the ATO’s exception for allowances within the reasonable amount applies), the employee includes it in their income, and they can claim the travel expenses they actually incur.

Keep in mind that fringe benefits tax (FBT), a separate tax paid by employers, may apply when your business pays for or reimburses an employee’s travel, for example if the employee extends the trip for private purposes and you cover those private costs. A living-away-from-home allowance, paid when an employee has to live away from their usual home for work, is also treated under the FBT rules rather than as a travel allowance. If you are a director and shareholder of a private company and the company pays private travel costs, Division 7A may also apply.

Businesses need to keep accurate records on those travel expenses. Here are some tips to help you track work-related travel expenses.

1. Educate employees on what they can claim

You can reduce errors and missing records by training employees on how to track travel expenses before they go on a trip. Even a simple checklist of what travel expenses you cover and don’t will be helpful.

Again, if you offer travel allowances, tell employees your daily allowance for meals, accommodation and incidental expenses, and how it compares with the ATO’s reasonable amounts. The reasonable amounts vary by destination and salary level and are set each income year; for 2026–27 they are in ATO Taxation Determination TD 2026/4.

Additionally, your employees should keep all of their receipts and documents while travelling on business.

2. Track expenses and keep records

The ATO requires that businesses keep records for five years as proof of travel claims. There are several expense tracking apps that make it easier to save receipts and other documents.

The myDeductions tool in the ATO app lets individuals, and sole traders with simple tax affairs, record expenses and photograph receipts. Growing businesses will want a more robust tool. Accounting software like Xero and MYOB also have expense tracking features.

3. Log a travel diary

If you’re a sole trader or a partner in a partnership and travel for business for 6 or more consecutive nights, the ATO requires you to keep a travel diary, before the trip ends or as soon as possible afterwards. It’s a record of the business activities you carry out while travelling.

A travel diary can be in any format as long as it shows, for each business activity:

• What the activity was
• The date and approximate time it began
• How long it lasted
• Where it took place

These entries should line up with the receipts and other records you keep, giving you an activity timeline backed by evidence.

The ATO highly recommends a travel diary for everyone else, and for shorter trips. If you ask your travelling employees to keep a travel diary, you’ll have an extra way to verify their claimed expenses.

4. Track expenses with a bookkeeper

The ATO is particular about what you can and can’t claim for travel expenses, and it can be costly if you track them incorrectly. At the same time, business travel expenses can become complicated to track, deduct, and report. When your business is fast-growing and you have over 100 employees to track, this is especially true.

Visory runs your finance function, bookkeeping included, and can help you track, record and report your travel expenses. When it’s time to lodge your business tax return, you’ll have organised books that include the documents the ATO may ask for.

To learn how Visory can help you manage work-related travel expenses, and the rest of your finance function, book a discovery call. We’ll get to know your business and identify the right services for you.