APA (NSW) Member Update
Meal Payments and Tax
Wednesday 17 August 2016
We are well into the new financial year, and some APA (NSW) members while doing their tax return have asked what the impact of their allowance are on their taxable income. Unfortunately there isn’t a simple answer for this as each allowance is treated in different ways when it comes to what is taxed, what can be deducted and some also have superannuation impacts.
Below, we will attempt to explain this as best as possible, but always talk to your accountant to clarify your personal position.
Firstly, just because an allowance is paid, does not automatically entitle the employee to a corresponding deduction. If it is deductible, you will need to have the appropriate documentation (receipts) to claim the deduction on your tax return.
Allowances such as missed cribs are considered part of your gross pay for the purposes of tax, and the employer is required to tax it appropriately. They will however incur the superannuation payments.
Allowances such as meal away from station and overtime meal allowance, which are paid to cover additional expense, are paid as a non-taxed payment to employees and have no impact on superannuation. If this allowance is shown on your group certificate, you can claim a deduction provided that there is appropriate proof of the expense. The ATO sets an yearly limit on these, which is based on your income, which can be found here.
Additional detailed explanation is available at the ATO website. We hope this addresses some questions.
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