Tax Deduction for travel for FIFO Workers

Contents

1. Introduction
2. What Are FIFO Workers?
3. General Rule on Travel Expenses
4. Exceptions for FIFO Workers
5. Key Criteria for Deductible Travel
6. Example Scenario: John Holland Case
7. Common Traps to Avoid
8. Maximise Your Deductions with Gotax Deduction Grabber App
9. Gotax Advice

1. Introduction

FIFO (Fly-In Fly-Out) workers have a unique work arrangement that involves travelling from their home to a remote work location, often on a rotational basis. Understanding the tax implications of these travel expenses can be challenging, but it's crucial for maximising your tax return. Here’s a simple guide to help you navigate the tax deductibility of your travel as a FIFO worker.

2. What Are FIFO Workers?

FIFO workers typically work in remote locations and commute from their home to the worksite, usually on a rotational basis. This arrangement is common in industries such as mining, oil, and gas.

3. General Rule on Travel Expenses

Under typical circumstances, travel between your home and your work location is considered private and non-deductible. This includes travel from your home to the airport, the flight to the work location, and any further travel to the actual work site.

4. Exceptions for FIFO Workers

However, there are exceptions, especially in light of recent court cases such as John Holland’s case. The Full Federal Court ruled that certain legs of a FIFO worker's journey could be deductible if they meet specific criteria.

5. Key Criteria for Deductible Travel

• Transit Points: Travel between a home transit point (e.g., an airport at your home location) and a work transit point (e.g., an airport near your work location) can be deductible.
• Employer Control: You must be under the direction and control of your employer during the travel between these transit points.
• Work-Related Travel: The travel should be directly related to your work duties and not merely a commute.

6. Example Scenario: John Holland Case

In the John Holland case, employees were hired to work on a railway line east of Geraldton, WA. They travelled from Perth to the work location and stayed in employer-provided accommodation. The court found that travel between the Perth airport (home transit point) and the Geraldton airport (work transit point) was deductible because it was part of their work duties and under employer control.

7. Common Traps to Avoid

• Private Travel: Travel purely between your home and your point of hire is generally not deductible.
• Lack of Employer Control: If you are not under the direction of your employer during the travel, it’s unlikely to be deductible.
• Non-Consistent Attendance: If your employment terms don’t require consistent attendance at a transit point, the travel may not be deductible.

8. Maximise Your Deductions with Gotax Deduction Grabber App

To make managing your deductions easier, consider using the Gotax Deduction Grabber App. It includes all the logbooks and tax expense recording systems you need. Scan the QR code below to download and simplify your tax recording process.

9. Gotax Advice

Maximising your tax refund as a FIFO worker requires understanding the nuances of deductible travel expenses. Always keep detailed records of your travel and consult with a Gotax professional if you’re unsure about your specific situation.

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