When your job requires you to work overtime, you don’t always get the benefit of running home for a quick meal. This can mean money out of your pocket to buy a meal from a restaurant when you normally wouldn’t. Many companies offer meal allowances to help cover your expenses when you’re forced to eat out because you’re working overtime.

In some cases, the employer gives you the full amount of the allowance after your overtime work, but others only give you what you can prove you spent. This means you must keep your receipt and submit it for reimbursement up to the allowable amount.

If you have worked overtime, and subject to the following conditions, it may be claimable as a tax deduction.

Reasonable Overtime Meal Allowances are determined by the Commissioner of Taxation and updated annually. For 2020-21, the reasonable overtime meal allowances are:

• $31.25 per meal
• The meal-by-meal amounts for employee long-distance truck drivers are $25.75, $29.35, and $50.65 per day for breakfast, lunch, and dinner respectively.

How to claim a tax deduction for meals allowance less than reasonable amount

Written evidence is not required where the tax deduction claimed is no more than the reasonable allowance amount.

If an overtime meals allowance you received is not shown in your payment summary, it does not have to be declared as income in your tax return provided:

• you have spent all the allowance on deductible expenses and
• you do not make any claim for the expenses in your tax return.

According to ATO website, an overtime meals allowance itemised on your annual payment summary, identified separately (and in addition to) your gross wages should be declared as income in your tax return. You can claim a deduction for overtime meals without getting written evidence, if all the following apply, you:

• get paid an overtime meal allowance under an industrial instrument (such as an award)
• buy food and drink and consume it on overtime
• only claim up to the reasonable allowance expenses amount.

Claims for more than the allowance

• Claims which are for more than the reasonable amount must be fully substantiated – supported by written evidence. If your company has paid you the amount without specifying overtime meal allowance, you would not be able to claim on that amount.
• A claimed allowance should be specifically referenced to an Award requirement.

In the end, to be exempt from tax deductions, the allowance must be paid under an industrial instrument in connection with overtime worked.