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Per Diem/Travel Allowance Rates
It should be noted by all travellers and travel administrators that the ATO TR2002/12 clearly states that the University can determine an amount up to the per diem rates specified. Many areas on campus are already paying a percent of per diem, instead of the full amount.
Extract from the ATO tax ruling TR2002/12:
"In setting the reasonable amount for purposes of this Ruling the Commission does not determine the amount of allowance an employee should receive or an employer should pay their employees. The amount of an allowance is a matter to be determined between the payer and the payee. The Commissioner determines the reasonable amount only for the purposes of the tax law, ie the amount that will be accepted for exception from the requirement to obtain and keep written evidence for substantiation purposes. It is not provided for the purposes of being used for employment or industrial relations purposes in setting the amount of allowances paid. The commissioner is not entitled under the tax law to have any specific regard to the fairness or appropriateness of the allowance paid as part of any remuneration arrangement."
An employee is required to travel to Sydney to attend a meeting. The employee chooses to travel by train, and submits a claim for the cost of the return rail fare. A receipt accompanies the request.
The payment exactly compensates the employee for actual expenditure incurred. The payment is a reimbursement.
The employee instead chooses to travel by car. A university vehicle is provided. The employee submits a claim for the maximum entitlement at per diem rates under current policy.
The per diem entitlement is an amount predetermined by the Business Unit and is payable regardless of the cost to the employee (see ATO TR2002/12). The entitlement is paid regardless of whether the employee incurs equivalent expenses. The payment is an allowance (code 180 for overnight travel or 175 for part day - per table 3.3.1) and is payable through the ESP HR System.
The employee drives his own car and submits a claim for the maximum entitlement at per diem rates under current policy.
The outcome is the same as scenario 2. It makes no difference that the employee used his own car. The payment is an allowance (per diem components for accommodation/meals attract code 180 for overnight travel or 175 for part day travel. Reimbursement for kilometres travelled using private vehicle at applicable rate attracts code 180 - refer to table 3.3.1)
The employee drives his own car but submits a claim equivalent to the cost of an economy class, return rail fare.
The claim represents the notional cost to the employee. It is an approximation of out of pocket expenses. The payment is an allowance (code 175 - refer to table 3.3.1).
The cost of the trip is estimated at $100. The employee is provided with an advance for this amount. On his return, receipts for all expenses must be provided, and any unspent funds refunded. Should the cost of the trip exceed $100, a further payment for the excess will be made.
The intention is to compensate the employee for actual, out of pocket expenses. Although the initial payment was estimated, evidence of all expenditure is required to substantiate the final amount payable. The payment is a reimbursement.
Driving a Personal Vehicle
Please refer to the HR Procedures on documentation required on car registration and insurance etc.
