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Travel and accommodation costs #3 – On call and standby arrangements

In Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees’ transport expenses? the Commissioner considers deductions for those on call or on standby. This may not be the most relevant of all the issues in this Ruling but as I seem to disappoint lots of people when I have advised on these issues, so I am happy I can now blame the Commissioner rather than taking the heat myself.

Only in very limited cases will travel that occurs while an employee is ‘on call’ be part of the employee’s employment, rather than a private matter. Just because an employee is awaiting a call from their employer does not make any travel deductible. To be deductible: 

  • the employee’s duties have substantively commenced at their home and the employee is required to travel to a regular place of work to complete those particular duties
  • undertaking the work in two locations is a necessary obligation arising from the nature of the duties, and
  • the travel to the workplace is not part of a normal journey to work that would have occurred anyway.

Here are the Commissioner’s two examples…

EXAMPLE 1: Linda is a nurse, who is sometimes required to be on standby duty. If Linda is called by her employer while she is on standby duty, she travels from her home to the hospital and starts her shift once she gets there. Linda’s travel is between her home and a regular work location with short notice of her start time. The transport expenses are not incurred by Linda in gaining or producing her assessable income. The expenses are a prerequisite to Linda’s income-earning activities and are private in nature. The transport expenses Linda incurs in travelling from her home to the hospital are not deductible.

EXAMPLE 2: Christine is a highly-trained computer consultant who is involved in supervising a major conversion in computer facilities which her employer provides for its customers. This requires her to be on call 24 hours a day. In order to assist in diagnosing and correcting computer faults while she is at home after her normal work hours, Christine’s employer installs specialised equipment at her home. Typically, matters can be resolved by Christine at home with the use of this equipment but if the problem cannot be resolved at home, Christine travels to the office in order to progress the matter further. In circumstances where Christine is called to correct a fault after hours and where she commences work on that fault at home but has to travel to her employer’s premises because she cannot rectify it at home, the cost of travel between her home and the office will be deductible. 

I advise a lot more Lindas than I do Christines…

By Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.

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