Overnight accommodation allowances paid to truck drivers
Version Number: 2
Legislation: Payroll Tax Act 2009
Date Issued: 15 April 2019 (effective from 1 July 2016)
Revenue Rulings do not have the force of law.
The Payroll Tax Act 2009 (the “Act”), which commenced on 1 July 2009, harmonises certain payroll tax legislation amongst the states and territories. One of the areas that has been harmonised is exempt allowances.
This Revenue Ruling clarifies the payroll tax treatment of overnight allowances paid to truck drivers.
Section 30 of the Act imposes payroll tax on accommodation allowances paid or payable to an employee in respect of a night’s absence from the employee’s usual place of residence to the extent that those allowances exceed the exempt rate. Generally, accommodation allowances are paid to an employee to cover temporary accommodation costs necessarily incurred while the employee is required to travel for work purposes. (See Revenue Ruling PTA-005 Exempt allowances: Motor vehicle and accommodation).
Under the Transport Workers (Long Distance Drivers) Award 2000 (the “Award”), where a long distance truck driver is unable to return home at night, the employer is required to pay the driver an allowance to cover the necessary personal expenses reasonably incurred in travelling. Further, the Award states that where the employer provides suitable accommodation acceptable to the union, the truck driver will not be entitled to the allowance. Under general circumstances, truck drivers do not incur accommodation expenses when travelling for work as they sleep in their trucks.
Overnight allowances paid to long distance truck drivers are exempt from payroll tax if the following criteria are satisfied:
- the allowance is paid according to the terms of the Award; and
- the amount is no more than the exempt rate for accommodation allowances under Section 30 of the Act.
If an overnight allowance exceeds the exempt rate, the difference between the allowance and the exempt rate is subject to payroll tax (Revenue Ruling PTA005).
View this Revenue Ruling as a PDF (PDF 211KB)