What are the ATO substantiation rules for employee expense claims in Australia?

Under Subdivision 900-B of the Income Tax Assessment Act 1997 (Cth), an employee must have written evidence to substantiate work-related deductions for any single expense of $300 or more, and for all expenses where the total work-related claim for the income year exceeds $300. Written evidence typically means an original receipt or tax invoice showing the supplier's name, the amount paid, the nature of the goods or services, the date the expense was incurred, and the date the record was created. An employer who requires employees to submit expense reimbursement forms should also require original receipts (or certified copies) as supporting documentation, both to support the employee's tax position and to enable the employer to claim GST input tax credits where applicable.

When does Fringe Benefits Tax (FBT) apply to expense reimbursements in Australia?

Under the Fringe Benefits Tax Assessment Act 1986 (Cth), FBT may apply to employer reimbursements of employee expenses. However, the 'otherwise deductible' rule in s 24 of the FBTAA reduces the FBT taxable value to nil where the employee would have been entitled to an income tax deduction had they paid the expense themselves. Most genuine business expense reimbursements — such as work travel, accommodation, conference fees, and professional subscriptions — fall within this exemption. Entertainment expenses (such as restaurant meals) are subject to FBT and the 50% entertainment deduction limitation under s 32-5 of the Income Tax Assessment Act 1997 (Cth). The minor benefit exemption under Reg 7B of the Fringe Benefits Tax Regulations 2018 may exempt benefits valued at less than $300 per occasion from FBT.

Can an employer claim GST input tax credits on employee expense reimbursements?

Yes. Under Division 111 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), an employer can claim input tax credits for GST paid on employee expense reimbursements as if the employer had directly acquired the goods or services. To claim the input tax credit, the employer must hold a valid tax invoice (not just a receipt) for supplies over $82.50 (including GST) from a GST-registered supplier. For supplies of $82.50 or less, a receipt or other evidence of the purchase is sufficient. Employees should be instructed to obtain proper tax invoices (which include the supplier's ABN and state that it is a tax invoice) rather than just receipts for significant expense items.

What are the ATO's reasonable travel allowance amounts and how do they affect expense claims?

The ATO publishes annual reasonable allowance amounts for travel expenses (accommodation, meals, and incidentals) in Taxation Ruling TR 2024/3 (and updated annually). These amounts set a threshold below which employees who receive a travel allowance do not need to provide detailed substantiation for each individual expense — instead, they can claim the actual amount received as a deduction without receipts, provided the allowance is included in their assessable income. Employers who pay allowances (as distinct from reimbursements) at or below the reasonable amount benefit from simplified reporting requirements under the ATO's PAYG withholding rules. Employers should confirm the current year's reasonable amounts with the ATO or their tax adviser before establishing travel allowance rates.

How long must employers retain expense reimbursement records in Australia?

Employers must retain expense reimbursement records for different periods depending on the relevant legislation. For income tax purposes, the ATO requires that records supporting business expense deductions be retained for at least five years from the date of lodgment of the relevant tax return (s 262A of the Income Tax Assessment Act 1936 (Cth)). For FBT purposes, employers must retain records for five years from the FBT return lodgment date (or five years from the date of the transaction if no FBT return is lodged). For GST purposes, tax invoices and other GST records must be retained for five years. Given these requirements, employers should adopt a uniform document retention period of at least five years for all expense reimbursement forms and supporting receipts, and seven years where there is any FBT uncertainty.

Are work from home expenses reimbursable and what are the tax implications?

Yes, employers can reimburse employees for genuine work-from-home (WFH) expenses such as home office equipment, internet costs, and stationery. The ATO's treatment of WFH expense reimbursements depends on whether the employer reimburses actual expenses or pays an allowance. Reimbursements of actual work-related expenses (with receipts) for items used exclusively for work are generally exempt from FBT under the 'otherwise deductible' rule. Reimbursements of expenses with a private component (such as internet or phone plans) may be partially subject to FBT. Since COVID-19, the ATO has published updated guidance on WFH deductions in PCG 2023/1 (the revised fixed rate method and actual cost method for WFH deductions). Employers should review their WFH expense reimbursement policies against the current ATO guidance.

Employee Expense Reimbursement Form (Australia) — Australia

An Employee Expense Reimbursement Form is a formal HR and finance document used by Australian employers to record, authorise, and process employee claims for reimbursement of legitimate business expenses incurred in the course of employment. The form provides a structured written record of each expense item, its business purpose, the amount claimed, and the supporting receipts or tax invoices attached. Once approved by the relevant manager, the form is forwarded to payroll or accounts payable for reimbursement. In Australia, employee expense reimbursements interact with three key areas of tax law: the Income Tax Assessment Act 1997 (Cth) (ITAA 1997), the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTAA), and the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act). Employers and employees must understand how these laws apply to ensure that expense reimbursements are processed correctly, that appropriate deductions and input tax credits are claimed, and that any Fringe Benefits Tax (FBT) liability is correctly identified and managed. Under the ITAA 1997, employees may claim deductions for work-related expenses that are incurred in producing assessable income and are not capital, private or domestic in nature. The ATO's substantiation rules (Subdivision 900-B of the ITAA 1997) require that employees maintain written evidence (receipts, tax invoices, or other documentation) for each expense of $300 or more, and for all expenses where the total claim for the income year exceeds $300. Written evidence must show the name of the supplier, the amount of the expense, the nature of the goods or services, the date the expense was incurred, and the date the evidence was created. Employers should require all employees to submit original receipts (or certified copies) with their expense claims. FBT applies under the FBTAA to benefits provided by an employer to an employee, or to an associate of an employee, in connection with their employment. However, the 'otherwise deductible' rule in s 24 of the FBTAA provides that where an employee would have been entitled to a deduction for the expense had they paid for it themselves, the FBT taxable value of the reimbursement is reduced to nil — meaning most genuine business expense reimbursements (such as work travel, accommodation, and conference fees) are effectively exempt from FBT. Entertainment expenses — including restaurant meals and drinks — may be subject to FBT and the 50% entertainment deduction limitation under s 32-5 of the ITAA 1997. The FBT minor benefit exemption (Reg 7B of the Fringe Benefits Tax Regulations 2018) may apply to benefits with a value of less than $300 per occasion. For GST purposes, an employer can claim an input tax credit for the GST component of a reimbursed expense where: (a) the expense is a taxable supply; (b) the employee incurred the expense in the course of carrying on the employer's enterprise; and (c) the employer holds a tax invoice for the expense. Under Div 111 of the GST Act, an employer can claim input tax credits for employee reimbursements as if the employer had acquired the thing to which the expense relates. This means that employees should obtain a proper tax invoice (not just a receipt) for GST-registered suppliers for all claims over $82.50 (including GST). The ATO also publishes annual reasonable allowance amounts for travel and meal expenses under Taxation Ruling TR 2024/3 (and its predecessors), which set out the amounts that employees can claim without detailed substantiation when the employer pays a travel allowance that does not exceed the reasonable amount. Employers who pay allowances rather than reimbursements should ensure that allowance amounts comply with the relevant ATO ruling. A properly completed Employee Expense Reimbursement Form should include: the employee's full name, employee ID, job title, department, email, and state or territory; the employer's name and ABN; the approving manager's name and title; the claim period; the overall business purpose of the expenses; a detailed register of each expense item including date, category, description, amount (AUD incl. GST), GST status, and whether a receipt is attached; the total claim amount; an FBT declaration; the preferred payment method; the manager's authorisation; and a payroll/finance processing record. This template is suitable for use across all Australian states and territories and is designed to reflect current ATO substantiation requirements, FBT obligations under the Fringe Benefits Tax Assessment Act 1986 (Cth), and best practice finance and HR administration.

What Is a Employee Expense Reimbursement Form (Australia)?

An Employee Expense Reimbursement Form is a formal HR and finance document used by Australian employers to record, authorise, and process employee claims for reimbursement of legitimate business expenses. The form captures each expense item — including the date, category, description, amount (AUD including GST), and receipt status — along with the overall business purpose, an FBT declaration, and the manager's authorisation decision.

In Australia, expense reimbursements must comply with the ATO's substantiation rules under Subdivision 900-B of the Income Tax Assessment Act 1997 (Cth), the Fringe Benefits Tax Assessment Act 1986 (Cth), and the GST Act. A properly completed Expense Reimbursement Form provides the written evidence needed to substantiate both the employee's tax position and the employer's entitlement to claim GST input tax credits for the reimbursed expenses.

The form is also the primary record used by the employer's payroll and accounts payable teams to process the reimbursement payment, allocate the expense to the correct cost centre or general ledger account, and maintain the records required for ATO compliance and FBT lodgment obligations.

When Do You Need a Employee Expense Reimbursement Form (Australia)?

An Employee Expense Reimbursement Form should be completed whenever an employee incurs out-of-pocket expenses in the course of their employment that are to be reimbursed by the employer. Common scenarios include travel for business purposes (domestic airfares, accommodation, taxis, and rideshare); attendance at conferences, training events, or professional development courses; client entertainment (noting FBT implications); purchase of office supplies, tools, or equipment for work purposes; payment of professional memberships or subscriptions; and telecommunications expenses where an employee uses a personal device or service for work.

The form is particularly important where: the employer's expense policy requires written authorisation before reimbursement; the total claim exceeds $300 (triggering ATO substantiation requirements); the expenses may have FBT implications (such as entertainment or client gifts); or the employer wishes to claim GST input tax credits on the reimbursed amounts, requiring a valid tax invoice to be held on file.

Expense claims should be submitted promptly — most employer policies require submission within 30 to 60 days of the expense being incurred — and must be accompanied by all original receipts or tax invoices to enable timely processing and to ensure compliance with the ATO's record-keeping requirements.

What to Include in Your Employee Expense Reimbursement Form (Australia)

A properly completed Australian Employee Expense Reimbursement Form should include the following key elements. Employee identification: the employee's full name, employee ID, job title, department or cost centre, email address, and state or territory of employment. Employer details: the employer's full legal name, ABN, and the name and title of the approving manager.

Claim period and business purpose: the start and end dates of the claim period, the submission date, and a clear description of the overall business purpose connecting the expenses. Expense register: for each expense item — the date incurred, the expense category (travel, meals, telecommunications, etc.), a description of the expense and its specific business purpose, the amount in AUD including GST, the GST status (taxable supply, GST-free, or input taxed), and confirmation that a receipt or tax invoice is attached.

Claim totals and FBT declaration: the total amount claimed across all items, the total number of receipts attached, an FBT declaration confirming that the expenses are wholly or predominantly for business purposes, and the preferred reimbursement method. Manager authorisation: the approving manager's decision (approved in full, approved in part, or not approved), the approved amount, any comments or reasons for partial approval, and the manager's signature and date. Finance processing record: a section for payroll or accounts payable to record the date processed, payment reference, amount paid, GST input tax credit outcome, and FBT assessment status.

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Employee Onboarding Checklist (Australia)

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Leave Application Form (Australia)

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Performance Review Form (Australia)

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Employer, employee, and reviewer details: The full legal name of the employer, ABN, the employee's full name, job title, department, state or territory of employment, commencement date, the reviewer's name and title, and the type and dates of the review. 2. Review period and type: A clear statement of the period being assessed and the type of review being conducted (annual, mid-year, post-probation, or performance improvement). 3. KPI and target achievement: A detailed record of the specific KPIs, targets, and objectives set at the beginning of the review period, together with the actual results achieved against each. 4. Performance ratings: Objective, criterion-referenced ratings across key dimensions including KPI achievement, quality of work, communication, initiative, leadership (if applicable), and attendance. Using a consistent 1-5 scale promotes fairness and comparability. 5. Achievements and areas for improvement: Written assessments of the employee's key achievements and specific, constructive areas requiring improvement, based on observable evidence. 6. Review outcome: A clear statement of the outcome of the review, including whether a performance improvement plan is required. 7. Development plan and goals: Specific, measurable performance goals and professional development activities for the next review period, together with the employer's commitments to support the employee. 8. Employee self-assessment: An opportunity for the employee to record their own reflections and comments on the review, promoting procedural fairness and two-way communication. 9. Signatures: Signatures by both the reviewing manager and the employee confirm that the review was conducted and communicated. 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Probation Review Form (Australia)

A Probation Review Form is a formal written document used by Australian employers to assess an employee's performance and conduct during their probationary period and to record the outcome of that review — whether the employee's employment is confirmed, the probation period is extended, or employment is terminated. A properly documented probation review is a critical element of lawful employment management under the Fair Work Act 2009 (Cth). What Is a Probation Review Form? A Probation Review Form (also referred to as a probationary period assessment, trial period review, or performance appraisal for new employees) is a structured record of a formal review meeting held between an employer and a new employee at or near the end of their agreed probationary period. The form documents the employer's ratings across key performance dimensions — including job knowledge, quality of work, initiative, teamwork and attendance — as well as a structured record of the outcome decision, the reasons for that decision, and any development goals set for the employee going forward. In Australia, probationary periods are not defined in the Fair Work Act 2009 (Cth) by that term, but the Act's concept of the minimum employment period is directly relevant. Under s 382 of the Act, an employee must have completed the minimum employment period before they are eligible to bring an unfair dismissal application to the Fair Work Commission. For employers with 15 or more employees, the minimum employment period is six months. For small business employers (fewer than 15 employees, as defined in s 23 of the Act), the minimum employment period is one year. This means that during the probationary period — provided it aligns with the minimum employment period — an employer has greater flexibility to terminate employment without the risk of an unfair dismissal claim. When Is a Probation Review Form Needed? A Probation Review Form should be used by any Australian employer at the end of a new employee's probationary period as a matter of best practice. It is particularly important in the following situations: - When the employer intends to confirm the employee's ongoing employment and wishes to document that decision on the personnel file; - When the employer has concerns about the employee's performance or conduct and is considering extending the probationary period to allow further time for improvement; - When the employer is considering terminating the employment at or near the end of the minimum employment period, and wishes to document the reasons for that decision; - When the employer's enterprise agreement or Modern Award contains specific requirements about performance review procedures for new employees; - When the organisation's internal HR policy requires a formal probation review to be conducted and documented for all new hires. Even where the employer intends to simply confirm employment, documentation of a probation review is valuable. It establishes a baseline record of performance expectations, creates a record of any development goals or areas for improvement communicated to the employee, and provides a foundation for future performance management if issues arise after the probationary period. Key Elements of an Australian Probation Review Form A compliant and effective Australian Probation Review Form should include the following elements: 1. Employer and employee identification: The full legal name of the employer, ABN, the employee's full name, job title, department, state or territory of employment, commencement date, and the scheduled end date of the probationary period. 2. Structured performance ratings: Objective, criterion-based ratings across key areas of performance such as job knowledge and technical skills, quality and accuracy of work, initiative and problem solving, teamwork and communication, and attendance and punctuality. 3. Narrative assessment: A written summary of the employee's key strengths observed during the probationary period, and a clear, constructive description of any areas that require further improvement. 4. Outcome decision: A clear statement of the review outcome — whether employment is confirmed, the probationary period is extended, or employment is terminated — together with written reasons for that decision. 5. Extended probation details: If the probationary period is being extended, the new end date must be specified and communicated in writing. 6. Development goals: Where employment is confirmed or extended, specific, measurable development goals set for the employee's next review period assist in managing ongoing performance expectations. 7. Employee comments: An opportunity for the employee to record their own comments on the review, promoting procedural fairness and two-way communication. 8. Signatures: Signatures by both the reviewing manager and the employee confirm that the review has been conducted and its outcome communicated. The employee's signature on an acknowledgement section confirms receipt and understanding — not necessarily agreement with every assessment. Fair Work Act 2009 (Cth) — Probation and the Minimum Employment Period Under the Fair Work Act 2009 (Cth), the minimum employment period under s 382 provides a window during which an employer may terminate employment without exposure to an unfair dismissal claim, provided the termination does not involve a breach of the general protections provisions (s 340) or unlawful termination provisions (s 772). Employers should note that other legal obligations — including anti-discrimination obligations under the Racial Discrimination Act 1975 (Cth), Sex Discrimination Act 1984 (Cth), Disability Discrimination Act 1992 (Cth), and applicable state and territory anti-discrimination legislation — apply throughout the employment relationship, including during the probationary period. This template is suitable for use across all Australian states and territories including New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory, for employers covered by the national workplace relations system.