Allowances

Generally, all allowances paid or payable to an employee are taxable for payroll tax purposes under Part 3, Division 6. However, there are specific provisions, which apply to motor vehicle allowances and overnight accommodation allowances. The Payroll Tax Act 2009 provides that motor vehicle allowances and overnight accommodation allowances are not considered wages unless they exceed the exempt component. If the allowance exceeds the exempt allowance then only that amount is included as wages for the purpose of the Payroll Tax Act 2009.

The motor vehicle exempt rate is aligned with the rate determined by the Federal Commissioner of Taxation for the previous financial year (i.e. rate used in 2019-20 is the ATO 2018-19 rate).

The accommodation exempt rate is based on the related ATO figure for the current financial year (i.e. rate used in 2019-20 is the ATO 2019-20 rate), and is the total reasonable amount for daily travel allowances using the lowest capital city for the lowest salary band.

The exempt rates for motor vehicle and accommodation allowances for the 2019-20 financial year are as follows:

  • Motor Vehicle Allowance - 68 cents per kilometre
  • Accommodation Allowance - $280.75 (Room $147.00, Incidentals $20.05, Meals $113.70)

The exempt rates for motor vehicle and accommodation allowances for the 2018-19 financial year are as follows:

  • Motor Vehicle Allowance - 66 cents per kilometre
  • Accommodation Allowance - $278.05 (Room $147.00, Incidentals $19.70, Meals $111.35)

A list of previous years allowances is available on our Rates and Thresholds page.

Information regarding the treatment and calculation of motor vehicle and accommodation allowances is available in Revenue Ruling PTA011: Allowances & Reimbursements