The costs of travel between an employee’s home and their regular place of work are generally not deductible, as they are a prerequisite to the commencement of work duties, in addition to being private in nature. However, there are exceptions to this general rule, a number of which are discussed in TR 2019/D7, specifically:
- The exception for certain ‘on call’ employees.
- The exception for employee transporting bulky equipment.
Note that general principles denying deductions for ordinary travel between home and a regular place of work extend to where such travel is undertaken from another private location (other than home). The above exceptions may also apply in such situations.
Importantly, TR 2019/D7 does not discuss the exception for home to work travel undertaken by an employee carrying out itinerant work. Reference should be made to TR 95/34 which discusses these rules in more detail.
‘On call’ employees
Where an employee is ‘on call’, certain travel they undertake between home and a regular place of work may be considered to be part of their employment rather than a prerequisite to the commencement of their work duties or private. For such travel to be deductible, all of the following factors must be present:
- The employee’s duties must be construed as having substantively commenced at home, and the employee must be required to travel to their regular place of work to complete that work.
- Undertaking the work in both work locations must be a necessary obligation arising from the nature of their employment duties.
- The travel to their regular place of work must not be part of a normal journey to work that would have occurred anyway.
The tax treatment of home to work travel of an ‘on call’ employee (as discussed above) may be distinguished from that of an employee on ‘standby’ duty. Under a typical standby arrangement, an employee awaits a call or request from their employer (in many cases outside their regular hours of work) to attend a regular place of work.
No substantive work is commenced at home at the time the employee receives the call or request from their employer to report for work. As the employee only commences work upon arriving at their regular place of work, their home to work travel is a prerequisite to commencement of their work duties and is not deductible.
Employees transporting bulky equipment
An employee transporting bulky equipment while travelling between home and a regular place of work may be able to deduct the costs of such travel, where they can establish that their transportation of bulky equipment is necessitated by the nature of their employment (as explained by their work duties), and does not arise as a matter of mere convenience or personal choice. To come within this exception, all of the following conditions must be met:
- The equipment is essential for the performance of their employment duties.
- The equipment is sufficiently bulky such that it can only be realistically transported by a car or another private vehicle.
- Transportation of the equipment to and from a regular place of work is a practical necessity because there is no secure storage area provided at their regular place of work, or the equipment needs to be transported to a different work side each day.