Generally, meals and drinks purchased during work are considered as private expense that is a non-deductible expense to the employee. There is an exception where the employer pays an overtime meal allowance under an industrial award to the employee who is required to work overtime.

Meal deductions

In this case, the employee is entitled to claim a tax deduction for the meal expenses up to a reasonable amount without obtaining written evidence (2016: $28.80/meal, 2017: $29.40/meal). However, the employee can only claim the amount of meal expense that has actually been spent. The taxpayer may still be required to demonstrate the genuine basis of their claim by showing how the amount was incurred. If the claims are more than the reasonable amount, it must be fully substantiated with written evidence. For example, Invoices or receipts.

According to a recent case, no deduction is claimable under income tax law for overtime meal expenses unless a bona fide award overtime meal allowance is paid. The meal allowance must be paid under an industrial award. Generally, it would be shown as an separate item on the PAYG Payment Summary under the allowance section. Please be aware that if you do not receive a separate identifiable and reasonable meal allowance then you will not be able to claim for your meal expenses. In this situation, you will need a letter from your employer breaking down how much you were paid for the allowance.

If you have any queries, please contact one of our accountants for assistance with this matter on (02) 9223 9166 or submit an online enquiry form today.