Meals & Sustenance — Australia Tax Rules

Claim meal costs when travelling for work or working overtime away from your base.

Claimable: Conditionally claimable · Tax authority: ATO

ATO Rules

• Meals are deductible when travelling overnight for business away from your normal workplace.
• Overtime meal costs may be deductible when you receive an overtime meal allowance from a client or engager.
• Meals at your regular workplace are NOT deductible — these are personal living expenses.
• Client entertainment meals are deductible as a business expense but subject to Fringe Benefits Tax (FBT) if you have employees or are operating through a company.
• The ATO publishes reasonable travel allowance amounts annually — claims within these amounts for domestic travel don't require every receipt.
• A travel diary is required for domestic trips of 6 or more nights, which also captures meal expenses.

Limits

No fixed cap. Check the current ATO Tax Determination (TD) for reasonable daily meal allowance rates by Australian city and overseas destination.

Worked Example

James travels Brisbane to Sydney for a 3-day client engagement. ATO reasonable rates for Sydney (2024/25): breakfast $32.50, lunch $37.65, dinner $63.10. He claims 3 days × $133.25 = $399.75 without needing individual receipts (within reasonable amounts).

Record Keeping

• Keep receipts for meal purchases if claiming above ATO reasonable amounts
• Record the business purpose, date, and location for each claim
• Maintain a travel diary for trips of 6 or more consecutive nights
• Note that regular workplace meals are not claimable

Frequently Asked Questions

Can I claim lunch every day?

No. Daily meals at your regular workplace are personal expenses. Only meals when travelling for business overnight or at temporary locations away from your regular base are claimable.

What are the ATO reasonable meal amounts?

The ATO publishes annual Tax Determinations with reasonable travel and meal allowance amounts by city and country. For 2024/25, check TD 2024/1 or the ATO website. Claims within these amounts for domestic overnight travel do not require individual receipts.

Can I claim coffee while working at a client site?

If you are working at a temporary location away from your regular base (not commuting to a regular workplace), reasonable food and drink costs are claimable. A one-off coffee at a client's offices during an occasional meeting is borderline — sustained work at a temporary site is clearer.

Is client entertainment deductible for a sole trader?

Yes, as a business expense for sole traders — unlike companies where FBT can apply. Client meals and entertainment are deductible provided they are genuinely for business purposes. Keep a record of who attended and the business purpose. Note: GST-registered businesses can claim the GST credit on client entertainment via the BAS.