The Rules For Claiming Meal Expenses

Something that you can do as a business is to pay a meal allowance for your employees.

The reason why you pay meal allowances is if they went for a business trip, and you send them off for a seminar and you pay them a meal allowance. That meal allowance is usually included on your PAYG summary if it’s above a certain amount.

The ATO releases a ruling or guidance showing what a reasonable amount of allowance is. If it’s below the reasonable amount, you don’t have to include it in your PAYG summary. It’s not considered income but it’s still a tax deduction to the company.

If you’re a business owner, the big benefit of doing that is if you, as an employee of the business, and you work overtime, What they can do is they can pay the overtime meal allowance in their name, not get tax in their individual name but essentially get that deduction in the business as a meal allowance.

Here’s a question from Jen, “Can you claim the whole amount as a deduction as well?”

It depends on what level are you entering it at. If it’s above the reasonable amount, you just need to claim the expenses against that allowance. Obviously, those expenses have to happen in the first place for you to claim that. If it’s below the reasonable amount, you don’t even need to include in your PAYG summary. It’s not taxable.

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