The accommodation allowance for 2022-23 is $289.15 per night (referred to as the exempt component) this amount consists of 3 parts:
The rate is set by the Australian Taxation Office (ATO) and is the total reasonable amount for daily travel allowances using the lowest capital city for the lowest salary band for the financial year.
If the amount paid to the employee exceeds the exempt component, the difference will be taxable for payroll tax purposes.
The allowance can be provided to cover accommodation, meals and incidentals. To claim the full accommodation allowance of $289.15 there must be an accommodation component. If the accommodation has been paid for by the employer the accommodation allowance can be exempt up to $142.15 which covers the meals and incidentals components ($21.30 + $120.85).
An accommodation allowance is paid to an employee to cover costs when they are temporarily away from their home due to work for periods of up to 21 days.
The Living Away from Home Allowance is different to an accommodation allowance as it is paid to employees who are working at locations away from their normal home for longer periods. The Living Away from Home Allowance will trigger a Fringe Benefit Tax (FBT) obligation. You do not need to include it in the accommodation allowances component of your wages as it will be included in the FBT component. If you include it in both (allowances and FBT) you will be overpaying payroll tax.
Reimbursements for accommodation expenses are not taxable. For example if an employee pays for accommodation and expenses and then seeks reimbursement for a set amount as indicated on invoices these are a business expense and not taxable.
A list of accommodation allowances for previous years is available on our Rates and Thresholds page.
For information on accommodation allowances paid to truck drivers, see Revenue Ruling PTA024: Overnight Accommodation Allowances Paid to Truck Drivers.