How to Claim Public Transport on Tax

As an employee or a self-employed person, you can claim public transport on tax in specific circumstances. This relates to all public transport, such as trains, trams, ferries, and buses.

Circumstances where public transport is tax deductible

If you are self-employed (e.g. a sole trader), you can claim public transport on tax for all work-related travel, including if you run your business from home.

As an employee, however, the options for claiming are more limited. But as a minimum, you must have paid the costs yourself and not been reimbursed for them by your employer and be able to back up your claim with detailed records. However, even though you must not have been reimbursed, if you receive a taxable travel allowance from your employer as part of your normal wages, you may still be able to claim for public transport costs.

For both employees and sole traders, the public transport costs claimed must be work-related; any private portion cannot be claimed. Examples of ‘work-related’ include: 

• Client visits
• Attending conferences or events, such as trade shows
• Purchases, deliveries, and banking
• Travelling from one workplace to another in certain situations as an employee. This includes where you have two separate jobs outside of your home, and you travel directly from one to the other, or where your employer occasionally requests you to travel to another work site or office.

As an employee, you cannot, as a general rule, claim public transport to work. Return trips are also not usually claimable. There are, however, some exceptions to this rule, such as:

• Where your home is considered an employment base. In this case, you can claim for irregular situations - for example, where you start doing some work at home and then find you must travel to work to complete it.
• Travel from home to do itinerant work - meaning you have no set workplace but instead travel to at least two different workplaces during the day.
• Travel from a workplace to your home where the workplace in question is not your regular place of work (e.g. it’s a client’s premises).

Scenario 1: you travel by bus from your employer’s workplace to a client’s premises for a consultation and travel directly home afterwards by train. In this instance, you can claim for both lots of travel. 

Scenario 2: you arrive at work, and your boss asks you to travel to the company’s second office to do relief work, as an employee who usually works there is on sick leave. You travel there by tram as you don’t have a vehicle. You can claim the costs of the tram travel to the other office and for travelling home or back to your normal workplace from there. 

Scenario 3: you are self-employed and work from home. You travel to a client’s premises by bus for a meeting and return to your home office afterwards. You can claim the costs of both bus trips.

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Situations where you cannot claim public transport on tax

• Between home and your place of employment other than for the exceptions mentioned above.
• Between two workplaces with the same employer where travelling between them is a regular arrangement.
• From home to your workplace on a regular basis where your home is considered an employment base.
• When doing minor tasks on the way to work (e.g. collecting mail) or if you work on-call.

Scenario 1: you work weekdays at your employer’s main office except for Wednesdays when you take a bus from work to the company’s second office in a different suburb. As this is a regular arrangement, you cannot claim travel costs.

Scenario 2: you don’t work every Monday but rather are on standby (on-call) at home. If you are called in to work, you travel there by train. Even though this happens irregularly, you cannot claim for any travel costs involved.

Records you must keep

You must keep detailed records and be able to show them if required. Suggestions for keeping these records include keeping a travel diary, a spreadsheet, or using the ATO mydeductions app.

Your records should include:

• Reason for the trip, including how it was work-related
• Locations involved
• Means of travel
• Starting and ending times for the work activities
• Costs incurred
• Any relevant receipts or documents - e.g. transport tickets or digital records of trips.

How to claim public transport at tax time

You can claim public transport on tax when filing your tax return at the end of the financial year, due by 31st October each year. You must keep your transport records for 5 years from the date of lodging your return. See our article on claiming expenses without receipts in case you haven't kept records or they are lost or destroyed.

As a sole trader, you would record it in the Business/Sole Trader Income section as part of your business expenses.

If you are an employee, you would claim the costs in the work-related deductions section. You must also include any taxable travel allowance you have received in the assessable income section.

You do not need to submit any documents when filing your return, but you must be able to produce them if the ATO asks for them.