How Are Per Diem Rates Paid in Australia?

Each year, the Australian Taxation Office (ATO) sets 'reasonable limits' for travel allowances covering accommodation, meals, and incidentals, known as a Travel Per Diem Allowance. These allowances are categorized into three income-based groups. For part-time employees, salaries should be annualized based on full-time hours.

Employers are encouraged to process these allowances through payroll so they appear on employee payslips for record-keeping purposes. However, they do not need to be reported in Single Touch Payroll (STP) if paid within the ATO's reasonable limits.

Attached is the current per diem rates released by the ATO, effective for the 2024/25 financial year. These rates are indexed annually.


Do Employees Need to Keep Receipts for Per Diem Payments in Australia?

Businesses are not required to keep receipts for per diem payments. However, they must maintain records of the per diems paid to employees, which can be efficiently managed through payroll.

Employees claiming a tax deduction will generally need to keep detailed records of travel allowance expenses. It is recommended that employees consult their tax advisors regarding specific record-keeping requirements based on their individual circumstances.


Are Per Diems Taxable in Australia?

  • Payments up to the ATO reasonable limit: Not subject to PAYG withholding (tax-free).

  • Payments exceeding the reasonable limit: Subject to PAYG withholding (taxable).

  • Overseas accommodation allowance: Subject to PAYG withholding (taxable).

  • Superannuation: Neither domestic nor overseas travel allowances are considered ordinary time earnings (OTE), so superannuation does not apply.


Reporting Requirements in STP

  • Domestic travel allowances for accommodation, meals, and incidentals paid up to the reasonable limit do not need to be reported in STP.

  • Overseas travel allowances: Meals and incidentals paid up to the reasonable limit are not reportable, but accommodation allowances are.

  • All allowances exceeding reasonable limits are reportable.

For more information, refer to the ATO guidelines:


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