Understanding Meal and Snack Deductibility for Employees

One of the most common mistakes is claiming your meal expenses in probably. It is essential to understand the rules around claiming deductions for meals and snacks, especially as they relate to your work activities. Here’s a quick guide to help you navigate these rules.

Meals and Snacks During Work Hours

Generally, the cost of food and drink is considered a private expense and is not deductible. This includes meals or snacks you purchase during your regular work hours. Whether you're buying lunch during a break or grabbing a snack to keep you going through your shift, these costs are not connected to your employment duties and cannot be claimed as a deduction.

Meals Between Jobs

If you work multiple jobs, the cost of meals purchased between shifts is also not deductible. For example, if you buy dinner between finishing one job and starting another, this cost remains a private expense and is not claimable.

Overtime Meal Expenses

There is an exception when it comes to meals purchased during overtime. If you meet certain conditions, you may be able to claim a deduction for an overtime meal:

1. You must purchase and eat the meal during overtime. The meal should be bought and consumed while you're working additional hours beyond your normal shift.

2. You must receive an overtime meal allowance. This allowance should be provided under an industrial award or enterprise agreement, and it must be reported on your income statement.

3. Declare the allowance in your tax return. The overtime meal allowance must be included as income in your tax return for you to claim the corresponding deduction.

   
   

Record Keeping and Reasonable Amounts

If you claim an overtime meal deduction, you generally need to keep records, such as receipts, to substantiate your claim. However, if your claim is within the ATO's specified reasonable amount for that income year (which is $35.65 for 2023-24), you may be exempt from keeping written evidence. Still, you must be able to demonstrate that you incurred the expense and are entitled to the deduction.

If your meal expenses exceed the reasonable amount, you can either claim the reasonable amount without extensive records or claim the actual amount and maintain detailed documentation.

Non-Deductible Entertainment Expenses

It's also important to note that the cost of attending work functions or entertainment events, even if they involve work-related discussions, is not deductible. This includes activities like work dinners, cocktail parties, and social functions.

For any further questions about meal and snack deductions or to discuss your specific circumstances, feel free to reach out to our tax professionals. We're here to help you navigate these rules and ensure your tax return is accurate and compliant.