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FLIGHT ATTENDANTS AND CABIN CREW

TAX DEDUCTIONS

For the year ended 30 June 2014

Work related uniforms, protective clothing and laundry

Laundry: You may claim up to $150 without receipts.

Dry cleaning usually falls under amounts less than $10 up to $200 without receipts. Sometimes if you use a regular dry cleaner they may be able to give you an annual tax receipts based on their records.

Uniforms are usually supplied but repairs to uniforms, shoes, stockings, hair donuts & tortoise shell clips  and accessories can be claimed where the uniforms are strictly enforced. Uniforms do not include jewellery e.g. pearl earrings. Although a watch with an airline logo on its face would be allowed. Hairspray, cuts, colours, foils & nails while strictly enforced are not uniforms and are not tax deductible.

Stockings: Many flight attendants buy 50 pairs of stockings @ over $10 a pair = $500 per year. These receipts are hard to keep, especially if purchased with groceries. Try putting your stockings, conditions, moisturisers, hand creams, etc. through as a group at the beginning of the checkout then photographing the receipt with your mobile then email yourself.

Shoes are tax deductible when part of a strictly enforced uniform or when there are safety issues e.g. in flight turbulence or on the tarmac. These shoes would usually have non slip soles.

 

Union

Union Fees are usually around: Virgin TWU $510, Virgin FAAA $457.60, Jetstar EBA $480 and Qantaslink $509 are deductible.

 

Mobiles & Internet

Mobiles & internet are often used to check rosters for on call days, flight arrivals/departures, facebook & email to make swaps, work calls and personal away overnight calls. When away overnight both work and private calls are allowable tax deductions.

You must keep 2 diaries.

Diary 1: One month's bill of itemised work mobile calls once every 5 years apportioned for business use.

Diary 2: 28 days of internet use once every 5 years apportioned for business use. On mobiles usually 1 gb = $10 per gb of data.

Use an A4 pad with a vertical line down the middle separating work from private then number 1 to 28 days on the left side.

If there is an apportionment change of > 10% you must start a new diary.

 

iPads/laptops/internet

Tax deductions are allowed for iPads, internet, laptops, computers, stationery, home phone and apportioned for private use.

If your iPad or internet is used partly for work then you need to apportion using a 28 day diary once every 5 years or where the work % changes by more than 10%.

A diary can be a simple A4 pad with a line in the middle with work & private on opposite sides.

Stationery (including cartridges) are a tax deduction if used for work.

 

Moisturisers

Due to cabin pressurisation that may result in damage to skin & hair, crew may claim hair and skin moisturisers as a tax deduction.

You may claim the moisturising component of your treatments but not cuts, colours, foils or nails. Many flight attendants use a regular hair dresser once very 6 weeks so obtaining an annual receipt is usually straight forward.

Remember to claim hair products, conditioners and hand & face moisturising creams as well as make-up with moisturisers and facial massages. Hairspray usually does not contain moisturisers.

Purchasing moisturisers and SPF Make-up from stores, e.g. Myer, Mac, Napoleons, etc., is hard to keep receipts. Photograph your receipts and the packaging, description & price with your mobile then email yourself.

 

Sun protection, sun glasses and SPF make-up

Many flight attendants are required to spend substantial amounts of time on the tarmac to direct passengers and for other reasons. This may result in damage to skin caused by the sun.

You would be able to claim make-up cosmetics containing SPF sun protection and sun glasses as tax deductions.

If you usually use sky bridges and are rarely on the tarmac then you would not be eligible to claim sun protection.

Purchasing moisturisers and SPF Make-up from stores, e.g. Myer, Mac, Napoleons, etc., is hard to keep receipts. Photograph your receipts and the packaging, description & price with your mobile then email yourself.

You may claim $200 worth of items costing < $10 without receipts.

 

Passports

If overseas travel is a requirement of employment, the apportioned cost of the issue and renewal of a passport is an allowable deduction.

 

Travel to a place of education for courses

Travel to and from a place of education is usually a tax deduction.

You must be able to work out your kms by using a diary or regular pattern of travel when going to your emergency procedures, dangerous goods, customer service, RSA, etc. training days.

You may claim the ‘set rate per kilometre method’ by multiplying the appropriate rate, between 65c and 77c per kilometre (based on engine size) x up to 5,000 kms.

Many flight attendants will go to 5 training days per year some may have a 40 kms round trip x 5 days x 76c per km = $152 tax deduction.

 

Tax Accountant Fees

Tax accountant fees and travel kms to the accountant are a tax deduction from the previous year.

 

Tax Receipts Substantiation Exceptions
 

$150 tax receipt exception for laundry or $1 per load.
$300 tax receipt exception for work expenses. This includes $150 for laundry but does not include allowances or motor vehicle tax expenses.
$200 tax receipt exception for expenses less than $10. This is on top of the $300 exception. This usually applies to small tools, office stationery and sundry expenses. You must keep a note of the expense.
Home Office tax receipt exception for 45c per hour. You must keep a diary of hours per week for 4 weeks.

 

Record Keeping

Written evidence (receipts, invoices, etc.) must be kept for 5 years from the lodgement of the relevant income tax return.

Tax Receipts must have:

  1. Date of invoice
  2. Date the expenses were incurred
  3. Business name
  4. Nature of goods or services
  5. Amount in $AUS.

Try photographing these receipts with your mobile.

ATO Practice Statement LA 2005/7

In some circumstances BPAY and internet banking statements may include sufficient details to support the correctness of your claims. Suppliers may not issue a receipt containing all the information required by the substantiation legislation. However you may use a combination of other documents to support your claims.

In some cases if a credit card statement has the date of the transaction, the name of the supplier and the amount paid and you make a note on the credit card statement detailing the items purchased with their respective prices, the Tax Office may accept this as sufficient evidence. See examples below.

The above does not apply for EFTPOS transactions because bank statements do not show cash withdrawals separately.

 

 

Reasonable overnight travel allowance meals & incidentals

Conditions:

1. You must be paid a bona fide travel allowance -

A 'bona fide travel allowance' is an amount that could reasonably be expected to cover accommodation, or meals or expenses incidental to travel. This does not require that the amount paid by the employer must equate dollar for dollar to the employee's actual expenditure. However there must be relativity between the quantum of the travel allowance and the purpose for which it is said to be paid. A token amount, or a general payment, is not a bona fide travel allowance. In this context the words 'cover' and 'covered' refer to the nature of the expenses for which the allowance is provided, that is the subject matter to be dealt with by the allowance paid, namely accommodation and applicable meal expenses. (See Re McIntosh and F.C. of T. [2001] AATA 702; 47 ATR 1242).

For accommodation, meal and incidental expenses to be considered under the exception from substantiation, the meal allowance must be a bona fide travel allowance (refer to TR 2004/6) paid or payable under a law of the Commonwealth or of a State or Territory, or an award, order, determination or industrial agreement in force under such a law (section 900-60 of the ITAA 1997).

 

2. You must be an employee (not a sole trader or partnership).

3. You must be away from your usual place of work.

4. You must not stay in one town for more than 21 days (Roads and Traffic Authority of NSW case; MT 2030).

5. You must be able to explain to the ATO how you spent your meal & incidentals allowances, keep an expense diary and receipts to show a regular pattern of expenditure over a 28 day period. e.g. You may be away overnight for only 7 days in that 28 day period.

6. Your claims have to be consistent with the employees occupation and type of expense.

 

SUMMARISE YOUR PAYSLIPS ON TO SPREADSHEETS

 

Flight attendants payslips summary - Domestic

 

Flight attendants payslips summary - International

 

NEW ATO GUIDELINES CONSULTAION PROCESS UNDER WAY

[201529] Domestic travel allowance expenses – reasonable rates and safe harbours for meals, incidentals and accommodation

https://www.ato.gov.au/General/Consultation/What-we-are-consulting-about/Matters-under-consultation/Administration/#D201529

David,

Thanks for your email.

The ATO is aware of the current dilemma that many taxpayers are confronted with when claiming for meals and incidentals associated with travelling on work.

A person can only claim what they incurred. But they don’t need to keep receipts if not claiming more than the Commissioner’s published rate. So how do they work out what they incurred? And how do they satisfy the Commissioner that they have only claimed what they incurred?

My advice to people in this situation is to summarise a daily or weekly meal cost and use that as a guide. They may be able to use bank account withdrawals or credit card statements to refresh the memory. It would be rare for the amount to come anywhere near the Commissioner’s rate unless such travel is infrequent and they live it up when they travel.

The ATO has publicly noted that it is consulting on the issue and I am the contact. I am awaiting an internal report based on data analysis before I actually have any external conversations. I have been advised that the report is almost ready.

What we are hoping to achieve through the consultation is a safe harbour amount that requires no records and some rules for records to keep when substantiation is not required and you are claiming between the safe harbour amount and the Commissioner’s rate.

Please call me if you wish to discuss.

Michael Majoor 
Director, New Measures & Priority Issues, Small Business/Individual Taxpayers

Australian Taxation Office
Phone: 02 9354 3158 | Facsimile: 02 9685 8666

 

Jetstar International Flight Attendant Spreadsheet - 2014

 

The following airlines paid a set overnight rate for the year ended

30 June 2014:

Jetstar

I have noticed that Team Jetstar and EBA Jetstar's overnight travel allowance are $111.03 and $113.52 respectively for Australian ports.

This means that you will need to summarise the number of overnights that you have had and claim the ATO rate of $118.85 or $109.80 per overnight.

When travelling overseas the ATO overnight allowance varies between countries $215.00 (Japan) to $145 (Thailand). Therefore your tax deduction depends on which country and city you stay.

I have noticed that Team Jetstar's overnight travel allowance for some cities are as follows: $134.34 (Narita), $122.13 (Osaka), $113.25 (Honolulu), $139.90 (Singapore), $136.57 (Auckland) and $97.16 (Phuket).

e.g. ATO travel allowance for Japan is  $215.00 - Jetstar allowance for Narita $134.34 = $80.66 x overnights e.g. 59 = $4,758.94 if you satisfy the above named conditions.

The overnight allowance would be included as income at Item 1 and the ATO rate claimed at D2.

Jetstar International Flight Attendant Spreadsheet - 2014

 

Virgin Australia / Virgin Regional

I have noticed that Virgin Australia & Virginal Regional overnight travel allowance within Australia is $108.00. Overseas travel allowance vary depending on the city.

This means that you will need to summarise the number of overnights that you have had and claim the ATO rate of $118.85 or $109.80 per overnight.

Japan

When travelling overnight to Japan the ATO overnight allowance is $215.00. Therefore your tax deduction is $215.00 (ATO rate) - $132.00 (Narita) or $134.00 (Osaka) = $93.00 x overnights e.g. 30 = $2,490.00 if you satisfy the above named conditions.

Bali

When travelling overnight to Denpasar (Bali) the ATO overnight allowance is $145.00 (Indonesia). Therefore your tax deduction is $145.00 (ATO rate) - $108.00  = $37.00 x overnights if you satisfy the above named conditions.

The overnight allowance would be included as income at Item 1 and the ATO rate claimed at D2.

 

ADA Gold

I have noticed that ADA Gold overnight travel allowance for overseas (usually Dubai) and within Australia is $75.00. 

This means that you will need to summarise the number of overnights that you have had and claim the ATO rate as follows:

UAE - Dubai $165.00

Australian ports $118.85 or $109.80 per overnight.

When travelling from Darwin overnight to Dubai the ATO allowance is $165.00. Therefore your tax deduction is $165.00 (ATO rate) - $75.00 = $90.00 x overnights usually 140 = $12,600.00 if you satisfy the above named conditions.

The overnight allowance would be included as income at Item 1 and the ATO rate claimed at D2.

Remember to claim your Zone rebate for Darwin.

 

Tiger Airways Australia Pty Ltd

30 June 2014 changes

I have noticed that Tiger Airways Australia pays a non taxable Overnight Allowance and a taxable Flight Duty Allowance (referred to in the EBA as meal allowances) of $77.00 and $5.00 respectively. The overnight travel allowances are on the pay slips as Overnight Allowance (non-taxable) and do not appear on the annual payment summary.

The Flight Duty Allowances (meal allowances) are on the pay slips and are taxable and are in the annual payment summary as a component of Gross Payments.

Please summarise the number of overnights that you have had and claim the ATO rate of $118.85 or $109.80 per overnight.

E.g. Helen makes a list of the cities and number of nights. She checks the ATO rate for each city.

Helen's tax deduction is $118.85 (ATO rate) - $77.00 x overnights 81 = $3,389.85.

Overtime Meal Allowances:

This is quite complex as the EBA states that overtime in a month is not paid until after 156 hours. However the Fair Work Australia Act is done on a shift basis and an EBA can not put an employee in a worse position. This is too difficult for me so I suggest that you contact Fair Work Australia and the ATO for advice.

If the ATO agrees:

Helen checks her roster and makes a list of the  number of days that she has worked overtime as per the Fair Work Australia Act and not the EBA.

Helen's tax deduction is $27.70 (ATO rate) - $5.00 x meals 71 = $1,611.70.

The Overnight travel and overtime meal allowances should be included as income at Item 1 and the ATO rate claimed at D2 assuming conditions are satisfied.

 

Altara Training Pty Ltd

I have noticed that Altara Training pays an overnight travel and overtime meal allowance of $77.00 and $5.00 respectively. The travel allowances are on the pay slips as non-taxable but does not appear on the payment summary. The overtime meal allowances are on the pay slips as non-taxable and are not on the payment summary.

This means that you will need to summarise the number of overnights that you have had and claim the ATO rate of $118.85 or $109.80 per overnight.

E.g. Helen makes a list of the cities and number of nights. She checks the ATO rate for each city.

Helen's tax deduction is $118.85 (ATO rate) - $77.00 x overnights 81 = $3,389.85.

Reasonable Overtime Meal Allowances:

You need to check your EBA and the Fair Work Australia Act for the definition of overtime.

Helen checks her roster and makes a list of the  number of days that she has worked overtime.

Helen's tax deduction is $27.70 (ATO rate) - $5.00 x meals 101 = $2,292.70.

The overnight travel and overtime meal allowances should be included as income at Item 1 and the ATO rate claimed at D2 assuming conditions are satisfied.

 

The following airlines paid an hourly rate of Overnight Travel Allowances for

the year ended 30 June 2014:

 

Qantas Domestic

Qantas Domestic flight attendants are usually paid an hourly rate for overnight travel allowance of $5.92 to 19 Nov 2013 then $6.05 per hour for the year ended 30 June 2014.

Non-taxable DTA referred to on your  pay slips are overnight travel allowances. These appear on your annual payment summaries as allowances.

Taxable DTA on your pay slips are daytime travel allowances and included as Gross Payments on your payslips and annual payment summary..

Please summarise your 26 pay slips and reconcile these to your annual payment summary.

The ATO reasonable overnight travel allowance rates are $118.85 (capital cities plus other high cost cities) or $109.80.

Example 1

Sam departs for overnight work trips and returns to his home port at various times.  On Sam's payment summary is an amount in allowances described as non-taxable DTA $8,115. Sam checks his rosters and confirms that the number of overnights that he has done is 75 nights.

Therefore Samantha's tax deduction is $118.85 (ATO rate) x 75 nights = $8,913.75 - $8,115 = $798.75. Sam must still keep receipts over a 28 day period to show a regular pattern of expenditure e.g. for 7 nights away.

 

Example 2

Matt departs for overnight work trips and returns to his home port at various times.  On Sam's payment summary is an amount in allowances described as non-taxable DTA $8,115. Sam checks his rosters and confirms that the number of overnights that he has done is 75 nights. 

However on some trips he leaves Perth at 5.00pm flies to the east coast stays overnight the arrives back at 9.00am. He total time away is 40 hrs x $6.05 = $242.

ATO allowance is $118.85 plus dinner $43.85 and breakfast $22.30 = $185.00

 

The Non-taxable DTA allowances would be included as income at Item 1  $8,115 and the ATO reasonable overnight travel allowance rate claimed at D2  $8,913.75 assuming all conditions are satisfied.

 

Remember to claim your Zone rebate for WA or NT for towns on ATO Zone List. You must have 183 touch down days.

 

Qantaslink

Qantaslink flight attendants are usually paid an hourly rate for overnight travel allowance of $4.76 per hour for the year ended 30 June 2014.

Non-taxable DTA referred to on your pay slips are overnight travel allowances. Taxable DTA on your payment summaries and pay slips are daytime travel allowances. The ATO reasonable overnight travel allowance rates are $118.85 (capital cities plus other high cost cities) or $109.80.

Example 1

Samantha reviews her rosters and 26 pay slips and totals her non-taxable DTA which = $6,264.40

Samantha makes a list of the cities and number of nights. She checks the ATO rate for each city.

Her high cost cities are $118.85 (ATO rate) x 60 nights = $7,131.

Her low cost cities are $109.80 (ATO rate) x 5 nights = $549.

Samantha's tax deduction is $7,131 + $549 = $7,680 - $6,264.40 = $1,415.60.

The overnight travel allowance for training days is usually $50 per night. Therefore Samantha's tax deduction is ($118.85 - $50.00) = $68.85 per night.

The Non-taxable DTA allowances would be included as income at Item 1 Allowances $6,264 and the ATO reasonable overnight travel allowance rate claimed at D2  $7,680 assuming all conditions are satisfied.

 

ATO reasonable overnight travel allowances for meals & incidentals

As per Tax Determination 2013/16 for the year ended 30 June 2014.

 

Salaries less than                  $108,810

 

Australia

                                            $118.85 or $109.80

 

 

International

 

Cost Group 2                          $115.00

Fiji

 

Cost Group 3                          $145.00

Thailand, Indonesia

 

Cost Group 4                          $165.00

USA, New Zealand, UAE

 

Cost Group 5                          $215.00

Singapore, Japan, UK, Hong Kong, China, Papua New Guinea

 

 

ATO condition No 5

You must be able to explain to the ATO how you spent your meal & incidentals allowance and keep an expense diary and photograph some receipts long enough to establish a regular pattern of expenditure for 28 days (e.g. you may only be away overnight  for 7 of those 28 days) using actual receipts and bank statements showing cafes & restaurants, etc.

e.g. 

Breakfast - hot breakfast $15, coffee $4 = $19

Lunch - chicken & salad $15, coffee $4 = $19

Dinner - hot meal $25, wine $15 = $40

Snacks - mini bar $12, chocolate $3 = $15

Incidentals - toiletries $6, magazines $8, in-house DVD $6, paperback book $20 = $40

Total = $133

 

OTHER ITEMS

Luggage used for overnights is tax deductible.

 

ZONE REBATES

ZONE REBATES are claimable if you have worked part of a day in a zone for 183 days during the current or previous years.

SPECIAL OR ORDINARY ZONE A   $1,173/$338                            SPECIAL OR ORDINARY ZONE B   $1,173/$57

PLUS

SPECIAL ALLOWANCES FOR DEPENDENTS FORM PART OF ZONE REBATES

GOOGLE ATO ZONE CALCULATOR

 

ATO Issues

The Australian Taxation Office have informed me that you may claim up to the maximum Australian Bureau of Statistics Public Service Rates (TD 2013/16), if the allowance does not appear on the payment summary as long as the allowance is shown as assessable income in the tax return without having to substantiate expenses as per Tax Ruling 2004/6 paragraph 11, 15, 25, 31, 37 & 39. 'Where the allowance is not required to be shown as assessable income in the employee's tax return, and is not shown, a deduction for the expense cannot be claimed in the tax return.'

I  include the allowances not appearing on the payment summary as income at Item 2 - Allowances on the tax return and then claim the ATO rate at D2.

'The object of this ruling is so you can decide between either maintaining fewer records and claiming up to the reasonable amount for those deductible expenses actually incurred that are covered by the allowance or keeping written evidence to substantiate your claim. It is acceptable for a reasonable estimate to be the basis for claims having taken into account the taxpayer’s occupation and type of expenses that would usually be incurred. This is a significantly lesser requirement than the need to keep written evidence.'

TR 2004/6

Reasonable amount for meals

63. Subsection 900-50(2) of the ITAA 1997 requires that, in determining what is reasonable, the Commissioner must take into account the total losses or outgoings that it would be reasonable to incur for accommodation, food or drink, or expenses incidental to the travel. In determining the reasonable amount of a claim for meals, reference should be made to the period of the travel. That is, what expenses on meals (for example breakfast, lunch, dinner) it is reasonable to incur from the time the travel commences to the end of the travel period that are covered by the allowance, given the individual employment circumstances of that taxpayer.

Example 2

64. Shena travels from her normal work place in Sydney to attend a meeting in Canberra. She leaves Sydney at 5.00 pm on Monday and stays 1 night in Canberra, returning to Sydney at 4.30 pm on the Tuesday. It is reasonable to expect Shena to incur the following meal expenses while travelling for work: Monday - dinner; Tuesday - breakfast and lunch. The amount of Shena's allowance covers these meals.

ATO rates are:

Breakfast $22.30

Lunch $25.45

Dinner $43.85

Incidentals $18.20

 

Example:

Some flight attendants are paid $108 overnight travel allowance per overnight in Australia. This may or may not be on their payment summaries. If not on their payment summary.

They must include the allowance as income at item 2 Allowances $108 then claim the $118.85 (ATO rate) as a deduction at D2 if they satisfy the above conditions. ($118.85 - $108.00) x 60 nights = $651.00. You must still keep actual receipts for a 28 day period to show a regular pattern of expenditure.

 

What to do if you are audited by the ATO for travel allowances

1. You must keep a regular pattern of expenditure using actual receipts or other proof over a 28 day period.

2. Read your 26 payslips and understand all items including Gross pay, Tax, Overnight Allowances, Daytime Allowance, Grooming Allowances, etc.

3. Summarise your payslips into a spread sheet then total for the year: e.g. Gross pay $42,888; Tax $6,983; Overnight Allowances $6,240; Daytime Allowances $2,345; Grooming Allowances $2,125, etc.

4. Please identify on your payment summary where these items are listed and compare to your bank statements.

5. List the number of overnights and cities where these were then compare to the number of overnight allowances paid. Some clients from Perth were claiming 140 nights, staying on the east coast, only to find that they only received an overnight allowance for 70 nights as they were away for < 48 hours per trip.

6. Domestic - List overnight allowance pay rates you have received in total (QANTAS) or per city fixed rate (Other Airlines).

7. International - List overnight allowance pay rates you received per overseas city e.g. Dubai $75 (ADA Gold), Narita $132, Osaka $134 (Jetstar).

8. Do not claim any other allowances (especially daytime or grooming allowances) at Label D2 on your tax return. The ATO is specifically targeting this error.

9. If you lose in an audit you have 60 days to object to the Appeals section of the ATO then to the Small Tax Claims Tribunal. The Tribunal is more likely to apply safe harbour amounts when you have no receipts.

10. Complain to the ATO then the General Inspector of Taxation if you feel you have been unfairly treated.

 

Also Google

ATO TR 95/19

ATO Airline employees 2010-11

ATO Flight attendants

 

DISCLAIMER
The information provided in the above documents is not intended to be, nor should it be construed as tax advice. Any specific recommendation for a client can only be done after their individual circumstances have been determined by David Douglas Accountants.

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