“I receive a travel or overtime meal allowance. Can I just claim the ATO’s published amount?”

This is one of those tax rules that sounds simple until you look at the detail.

The ATO has released its updated reasonable travel and overtime meal allowance rates for the 2026–27 income year, including an overtime meal allowance of $40.00. 

The problem is that these published amounts are often treated like automatic deductions. They are not.

A genuine allowance comes first

The ATO’s reasonable rates only become relevant where an employee actually receives a genuine travel or overtime meal allowance from their employer.

Generally, that allowance needs to:

• be specifically paid for work-related travel or overtime meal expenses 
• relate to particular trips or overtime worked 
• be shown separately from normal salary or wages 
• and be intended to cover expenses the employee is expected to incur. 

If the amount is simply built into ordinary salary or is not separately identified, the ATO’s reasonable allowance rules may not apply.

The published rate is not a standard deduction

This is the biggest misconception. Receiving an allowance does not mean you can automatically claim the full ATO reasonable amount.

You can generally only claim what you actually spent on deductible work-related travel or overtime meal expenses. The reasonable rates mainly affect the level of substantiation required. In some cases, you may not need a receipt for every individual expense, but the expense still needs to have been genuinely incurred. 

Think of the ATO figure as a record-keeping benchmark, not a target.

Good records still matter

Even where receipts are not required for every expense, you should still keep enough evidence to show that the claim is real and reasonable.

Useful records can include:

• a diary of work trips and overnight travel 
• notes of meal and incidental expenses 
• bank or credit card statements 
• a representative sample of receipts 
• and, for longer trips, a travel diary. 

For travel of six or more consecutive nights, additional travel diary requirements will generally apply. 

What should employees and employers check?

A few simple checks can prevent problems later:

• make sure the allowance appears separately on the payslip 
• keep records as you go, rather than trying to reconstruct them at tax time 
• only claim what was actually spent 
• and pay extra attention to longer trips. 

The rules are designed to make substantiation easier in the right circumstances, not remove it altogether. 

Final thought

The ATO’s published rates are useful, but they are not a shortcut to a bigger deduction.

If you receive travel or overtime meal allowances, speak with your Aspen advisor about whether the allowance qualifies and what records you should keep before lodging your return.