are travel allowances tax free

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Tax issues arise when employers pay employee business travel expenses

Employers must determine proper tax treatment for employees.

Most employers pay or reimburse their employees’ expenses when traveling for business. Generally, expenses for transportation, meals, lodging and incidental expenses can be paid or reimbursed by the employer tax-free if the employee is on a short-term trip. However, the tax rules become more complex when the travel is of a longer duration. Sometimes the travel expenses paid or reimbursed by the employer must be treated as taxable compensation to the employee subject to Form W-2 reporting and payroll taxes.

The purpose of this article is to address some of the more common travel arrangements which can result in taxable income to employees for federal tax purposes. Although business travel can also raise state tax issues, those issues are beyond the scope of this article. This article is intended to be only a general overview as the tax consequences to an employee for a given travel arrangement depend on the facts and circumstances of that arrangement.

In the discussion below, it is assumed that all travel expenses are ordinary and necessary and incurred by an employee (or a partner in a partnership) while traveling away from home overnight for the employer’s business. In addition, it is assumed that the expenses are properly substantiated so that the employer knows (1) who incurred the expense; (2) where, when, why and for whom the expense was incurred, and (3) the dollar amount. Employers need to collect this information within a reasonable period of time after an expense is incurred, typically within 60 days.

Certain meal and lodging expenses can fall within a simplified substantiation process called the “per diem” rules (although even these expenses must still meet some of the substantiation requirements). The per diem rules are outside the scope of this article.

One of the key building blocks for the treatment of employee travel expenses is the location of the employee’s “tax home.”  Under IRS and court holdings, an employee’s tax home is the employee’s regular place of work, not the employee’s personal residence or family home. Usually the tax home includes the entire city or area in which the regular workplace is located. Generally, only expenses paid or reimbursed by an employer for an employee’s travel away from an employee’s tax home are eligible for favorable tax treatment as business travel expenses.

Travel to a regular workplace

Usually expenses incurred for travel between the employee’s residence and the employee’s regular workplace (tax home) are personal commuting expenses, not business travel. If these expenses are paid or reimbursed by the employer, they are taxable compensation to the employee. This is the case even when an employee is traveling a long distance between the employee’s residence and workplace, such as when an employee takes a new job in a different city. According to the IRS, if it is the employee’s choice to live away from his or her regular workplace (tax home), then the travel expenses between the two locations which are paid or reimbursed by the employer are taxable income to the employee.  

Example: Bob’s personal residence is in Chicago, but his regular workplace is in Atlanta. Bob’s employer reimburses him for an apartment in Atlanta plus his transportation expenses between the two cities. Since Atlanta is Bob’s tax home, these travel expenses are personal commuting expenses and the employer’s reimbursement of the expenses is taxable compensation to Bob.

Travel to two regular workplaces

Sometimes an employer requires an employee to consistently work in two business locations because of the needs of the employer’s business.  Factors such as where the employee spends the most time, has the most business activity, and earns the highest income determine which is the primary location with the other being the secondary location. The employee’s residence may be in either the primary or the secondary location. In general, the IRS holds that transportation costs between the two locations can be paid or reimbursed by the employer tax-free. In addition, lodging and meals at the location which is away from the employee’s residence can generally be paid or reimbursed tax-free.

Example:  Caroline lives in Location A and works at her company headquarters there. Her employer opens a new store in Location B and asks her to handle the day-to-day operations for two years while the store is getting up to speed. But Caroline is also needed at the headquarters so her employer asks her to spend two days a week at the headquarters in Location A and three days a week at the store in Location B.  Because the work at each location is driven by a business need of Caroline’s employer, she is treated as having primary and secondary work locations and is not treated as commuting between the two locations. Caroline’s travel between the two locations and her meals and lodging at Location B can be reimbursed tax-free by her employer.

As a practical matter, the employer must carefully consider and be able to support the business need for the employee to routinely go back and forth between two business locations. In cases involving two business locations, the courts have looked at time spent, business conducted and income generated in each location.  Merely having an employee “sign in” or “touch down” at a business location near his or her residence is unlikely to satisfy the requirements for having two regular workplaces. Instead, the IRS would likely consider the employee as having only one regular workplace with employer-paid travel between the employee’s residence and the regular workplace being taxable commuting expenses.

Travel when a residence is a regular workplace

In some cases an employer hires an employee to work generally, or only, from the employee’s home, as he or she is not physically needed at an employer location.  If the employer requires the employee to work just from his or her residence on a regular basis, does not require or expect the employee to travel to another office on a regular basis, and does not provide office space for the employee elsewhere, then the residence can be the tax home since it is the regular workplace for the employee.  When the employee does need to travel away from his or her residence (tax home), the temporary travel expenses can be paid or reimbursed by the employer on a tax-free basis.

Example: Jason is a computer programmer and works out of his home in Indianapolis for an employer in Seattle. He periodically travels to Seattle for meetings with his team. Since Jason has no assigned office space in Seattle and is expected by his employer to work from his home, Jason’s travel expenses to Seattle can be reimbursed by his employer on a tax-free basis.  

Travel to a temporary workplace

Sometimes an employer temporarily assigns an employee to work in a location that is far from the employee’s regular workplace, with the expectation that the employee will return to his or her regular workplace at the end of the assignment. In this event, the key question is whether the employee’s tax home moves to the temporary workplace.  If the tax home moves to the temporary workplace, the travel expenses between the employee’s residence and the temporary workplace that are paid or reimbursed by the employer are taxable compensation to the employee because they are personal commuting expenses rather than business travel expenses. Whether or not the employee’s tax home moves to the temporary workplace depends on the duration of the assignment and the expecations of the parties.

• One year or less . If the assignment is expected to last (and actually does last) one year or less, the employee’s tax home generally does not move to the temporary workplace. Therefore, travel expenses between the employee’s residence and temporary workplace that are paid or reimbursed by the employer are typically tax-free to the employee as business travel.

Example: Janet lives and works in Denver but is assigned by her employer to work in San Francisco for 10 months. She returns to Denver after the 10-month assignment. Janet’s travel expenses associated with her assignment in San Francisco that are reimbursed by her employer are not taxable income to her as they are considered temporary business travel and not personal commuting expenses.

• More than one year or indefinite .  If the assignment is expected to last more than one year or is for an indefinite period of time, the employee’s tax home generally moves to the temporary workplace. This is the case even if the assignment ends early and actually lasts one year or less. Consequently, travel expenses between the employee’s residence and the temporary workplace that are paid or reimbursed by the employer are taxable compensation to the employee as personal commuting expenses.

Example: Chris lives and works in Dallas but is assigned by his employer to work in Oklahoma City for 15 months before returning to Dallas. Chris’s travel expenses associated with his assignment to Oklahoma City that are reimbursed by his employer are taxable income to him as personal commuting expenses.

• One year or less then extended to more than one year . Sometimes an assignment is intended to be for one year or less, but then is extended to more than one year. According to the IRS, the tax home moves from the regular workplace to the temporary workplace at the time of the extension. Therefore, travel expenses incurred between the employee’s residence and the temporary workplace that are paid or reimbursed by the employer are non-taxable business travel expenses until the time of the extension, but are taxable compensation as personal commuting expenses after the extension.

Example:  Beth’s employer assigns her to a temporary workplace in January with a realistic expectation that she will return to her regular workplace in September.  However, in August, it is clear that the project will take more time so Beth’s assignment is extended to the following March. Once Beth’s employer knows, or has a realistic expectation, that Beth’s work at the temporary location will be for more than one year, changes are needed to the tax treatment of Beth’s travel expenses. Only the travel expenses incurred prior to the extension in August can be reimbursed tax-free; travel expenses incurred and reimbursed after the extension are taxable compensation.

When an employee’s residence and regular workplace are in the same geographic location and the employee is away on a temporary assignment, the employee will often return to the residence for weekends, holidays, etc. Expenses associated with travel while enroute to and from the residence can be paid or reimbursed by an employer tax-free, but only up to the amount that the employee would have incurred if the employee had remained at the temporary workplace instead of traveling home.

Travel to a temporary workplace – Special situations

In order for an employer to treat its payment or reimbursement of travel expenses as tax-free rather than as taxable compensation, the employee’s ties to the regular workplace must be maintained. The employee must expect to return to the regular workplace after the assignment, and actually work in the regular workplace long enough or regularly enough that it remains the employee’s tax home. Special situations arise when an employee’s assignment includes recurring travel to a temporary workplace, continuous temporary workplaces, and breaks in assignments to temporary workplaces.

• Recurring travel to a temporary workplace . Although the IRS has not published formal guidance which can be relied on, it has addressed situations where an employee has a regular workplace and a temporary workplace to which the employee expects to travel over more than one year, but only on a sporadic and infrequent basis.  Under the IRS guidance, if an employee’s travel to a temporary workplace is (1) sporadic and infrequent, and (2) does not exceed 35 business days for the year, the travel is temporary even though it occurs in more than one year.  Consequently, the expenses can be paid or reimbursed by an employer on a tax-free basis as temporary business travel.

Example: Stephanie works in Location A but will travel on an as-needed basis to Location B over the next three years. If Stephanie’s travel to Location B is infrequent and sporadic and does not exceed 35 business days a year, her travel to Location B each year can be reimbursed by her employer on a tax-free basis as temporary business travel.

• Continuous temporary workplaces .  Sometimes an employee does not have a regular workplace but instead has a series of temporary workplaces. If the employee’s residence cannot qualify as his or her tax home under a three-factor test developed by the IRS, the employee is considered to have no tax home and is “itinerant” for travel reimbursement purposes. In this case, travel expenses paid by the employer generally would be taxable income to the employee.

Example: Patrick originally worked in Location A, but his employer sends him to Location B for eleven months, then assigns Patrick to Location C for another eight months. Patrick will be sent to Location D after Location C with no expectation of returning to Location A. Patrick does not maintain a residence in Location A. Travel expenses paid to Patrick by his employer will likely be taxable income to him.    

• Breaks between temporary workplaces . In an internal memorandum, the IRS addresses the outcome when an employee has a break in assignments to temporary workplaces. When applying the one-year rule, the IRS notes that a break of three weeks or less is not enough to prevent aggregation of the assignments, but a break of at least seven months would be. Some companies choose to not aggregate assignments when the breaks are shorter than seven months but are considerably longer than three weeks, given the lack of substantive guidance from the IRS on this issue.

Example: Don’s regular workplace is in Location A. Don’s employer sends him to Location B for ten months, back to Location A for eight months, and then to Location B again for four months. Although Don’s time in Location B totals 14 months, since the assignments there are separated by a break of at least seven months, they are not aggregated for purposes of applying the one-year rule. Consequently, the travel expenses associated with each separate assignment to Location B can be reimbursed by the employer on a tax-free basis as temporary business travel since each assignment lasted less than a year.

  Conclusion

The tax rules regarding business travel are complex and the tax treatment can vary based on the facts of a situation. Employers must carefully analyze business travel arrangements to determine whether travel expenses that they pay or reimburse are taxable or nontaxable to employees.

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Travel and Expense

What is a travel allowance definitions and insights.

A travel allowance can be an effective way to manage employee travel expenses and manage costs for the employee. 

When employees travel for business, there are myriad expenses, from hotels to taxis or ride-sharing services. Using a travel allowance can help give travelers flexibility and control while increasing compliance with tax regulations. 

What Is a Travel Allowance? 

A travel allowance is compensation paid by an employer to employees to cover expenses incurred when traveling for business. In addition to lodging and transportation, travel allowances are typically used for airfare, meals, and other expenses related to business travel. It is business travel compensation, provided either before or after travel is completed. 

Managing business travel compensation can be complex and hard to manage. The way businesses handle travel compensation is changing, as leaders look to implement tools that aid travelers and companies alike. 

Technology is transforming how companies manage all aspects of employee travel , including the creation and coordination of travel allowances. 

Types of Travel Allowance 

There are many types of travel allowances, which can be given upfront or based on a reimbursement schedule. Here is a look at some of the most common. 

Fixed Travel Allowance 

A fixed travel allowance is a flat rate that is offered to an employee, irrespective of the level of expenses incurred. Employees are responsible for managing their travel expenses and determining how to use the money best to accommodate their needs. It is commonly used with employees for short trips or who travel infrequently. 

Typically, with a fixed allowance, if the employee spends less than the allocated amount, the employee can keep the difference. If the employee spends more, they are responsible for making up the difference. Businesses using fixed travel allowance should work with their tax professional to understand the implications of this practice. 

Daily Travel Allowance 

Also called a per diem, a daily travel allowance is an amount used for each day of travel and can be used for lodging, transportation, meals, and other travel expenses. Typically, a traveler will reconcile the per diem by submitting an expense report and receipts. The traveler will be reimbursed for any expenses they spent in excess and will return money that was unspent. 

Travel Reimbursement 

This travel allowance requires the traveler to submit receipts for actual expenses incurred, which are then reimbursed. This process can be cumbersome and time-consuming for the traveler. If reimbursement is not done in a timely manner, it can be burdensome for the employee, who is essentially lending money to the company. Fortunately, there are technologies available today to simplify this work. 

Mileage Allowance 

This type of allowance pays the employee for miles traveled on business. It is typically used when employees use their own car for business-related travel. Technologies can tracking and  reimbursing for mileage simpler and more accurate. 

Methods for Calculating Travel Allowances 

When using travel allowances as part of a corporate travel program, one key consideration is how the travel allowances are calculated. 

The process often has to consider the distance traveled and the time spent traveling. Here is one way to calculate a travel allowance. 

Location and Days of Travel 

Start by determining the location of the traveler at midnight on each day of travel. A day of travel is defined as a 24-hour period an employee is conducting business while traveling. 

The day of travel ends when the next day starts or they return home from a business trip to their home or office. For example, if an employee leaves for a trip at 4 p.m., the first day of travel is from 4 p.m. that day until 4 p.m. the next. 

Lodging allowances are provided based on whether an employee spends the night in accommodations other than their own home. Typically, lodging allowances are based on the location and the current price rates for various hotel categories, based on company preferences for the level of hotels allowed. 

Unlike with other categories, usually lodging is an either/or determination. Employees are either allowed the lodging allowance or not based on the circumstances of the trip. 

Like with lodging, meal allowances are usually based on the prevailing costs of meals in each location. It assumes that a traveler will have three meals a day. 

Typically, a meal allowance covers both meals and incidentals, such as snacks. Often it is prorated based on the time in any given day a traveler is on the road. 

The meal allowance may also be reduced if there are meals provided as part of the work travel, such as part of a conference registration fee or transportation ticket. 

Managing Travel Allowances 

Managing travel allowances is a complex task. Here are some tips on how to effectively implement and manage a program: 

• Develop a Clear Policy. Travelers need to understand the specifics in your travel program and how allowances are used. The policy needs to spell out, for example, what expenses are allowed and not allowed and the ways in which allowances are calculated. Transparency is essential to ensure all employees understand how travel expenses are covered 
• Consider Incidentals. Business travelers face many complexities and challenges. You want a policy that makes it easy for travelers to navigate while on the road. Be sure your policy covers costs that may arise, including parking, fuel, tips, laundry services, printing, internet fees, and luggage check fees 
• Analyze Data. You need a system in place that collects and reports on travel data to allow you to better understand trends, shifts and challenges. With visibility into your travel program, you can make timely, well-informed decisions 

Developing Travel Allowance Policies and Guidelines 

If your company wants to develop a travel allowance policy, where should you begin? 

The policy should be rooted in a broader travel policy which should consider the following: 

• Scope. What aspects of business travel will your policy cover? 
• Coverage. Determine which elements of travel the policy will cover, such as air travel, lodging, meals, incidentals, and ground transportation 
• Reimbursement Types. Will your company use travel allowances and, if so, which types? 
• Participation. How will policies be determined? Be sure to include staff from human resources, finance, and departments that frequently travel, in determining the policy 
• Safety. Be sure your policy provides protection for employees while they are traveling  
• Expense Reporting. Develop tools or adopt that will be used for the reporting of travel expenses, with an emphasis on scalability, technology integration, and ease of use 

Technological Advancements in Travel Allowance Management 

Technology is changing the way companies manage business travel . There are powerful platforms available today that integrate travel policies, allow for the booking of travel and itinerary management and provide robust data collection and travel. 

Employees need access to easy-to-use tools that allow for the recording of receipts and other transactions, let them reconcile expenses and generate expense reports, and simplify approvals and routing. 

SAP Concur solutions can provide companies with integrated business travel, expense, and invoice solutions. With SAP Concur solutions, companies can book travel, manage expenses, integrate with business systems, manage invoices, and more. 

Learn more about how SAP Concur solutions can simplify your travel management . 

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Travel allowances

Explains the PAYG withholding implications on travel allowances.

Last updated 24 August 2021

Travel allowance is a payment made to an employee to cover accommodation, food, drink or incidental expenses they incur when they travel away from their home overnight in the course of their duties.

Allowances folded into your employee's salary or wages are taxed as salary and wages and tax has to be withheld, unless an exception applies.

You include the amount of the travel allowance in the allowance box on your employee's payment summary.

The exception applies if:

• you expect your employee to spend all of the travel allowance you pay them on accommodation, food, drink or incidental expenses
• you show the amount and nature of the travel allowance separately in your accounting records
• the travel allowance is not for overseas accommodation
• the amount of travel allowance you pay your employee is less than, or equal to the reasonable travel allowance rate.

If the exception applies, you:

• don't withhold tax from the travel allowance you pay your employee
• don't include the amount of the travel allowance in the allowance box on your employee's payment summary
• only include the allowance on their payslip.

If the first two exception conditions are met but you pay your employee a travel allowance over the reasonable travel allowance rate, you're required to withhold tax from the amount that exceeds the reasonable travel allowance rate. You also need to include the total amount of the travel allowance in the allowance box on your employee's payment summary.

You are always required to withhold tax from a travel allowance for overseas accommodation and include the amount of the travel allowance in the allowance box on your employee's payment summary.

Check the relevant Single Touch Payroll (STP) employer reporting guidelines to see how to report these payments through STP:

• STP Phase 1 employer reporting guidelines – allowances
• STP Phase 2 employer reporting guidelines – allowances

Reasonable travel allowance rate

Each year we publish the amounts we consider reasonable for claims for domestic and overseas travel allowance expenses.

• TD 2021/6 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2021–22 income year?
• TD 2020/5 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2020–21 income year?
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GSA has adjusted all POV mileage reimbursement rates effective January 1, 2024.

* Airplane nautical miles (NMs) should be converted into statute miles (SMs) or regular miles when submitting a voucher using the formula (1 NM equals 1.15077945 SMs).

For calculating the mileage difference between airports, please visit the U.S. Department of Transportation's Inter-Airport Distance website.

Plan a trip

Research and prepare for government travel.

Per diem, meals & incidental expenses (M&IE) Passenger transportation (airfare rates, POV rates, etc.) Lodging Conferences/meetings Travel charge card State tax exemption

Services for government agencies

Programs providing commercial travel services.

Travel Category Schedule (Schedule L) E-Gov Travel Service (ETS) Emergency Lodging Services (ELS) Employee relocation

Travel reporting

Federal Travel Regulation Table of contents Chapter 300—General Chapter 301—Temporary Duty (TDY) Travel allowances Chapter 302 - Relocation allowances

ATO Reasonable Travel Allowances

‘Reasonable’ allowances received in accordance with ATO’s reasonable travel allowances schedules are not required to be declared as income, and can be excluded from the expense substantiation requirements.

Per diem rate schedules of amounts considered reasonable are set out in Tax Determinations published by the Tax Office annually.

Tax Office determination TD 2024/3 sets out reasonable allowances for the 2024-25 financial year. See details below .

2021, 2022, 2023 and 2024 rates and earlier years are also set out below.

Tax Ruling TR 2004/6 describes the substantiation exception for expenses which are in line with the prescribed reasonable allowance amounts.

The annual determinations set out updated ATO reasonable allowances for each financial year for:

• overtime meal expenses – for food and drink when working overtime
• domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work
• overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

On this page:

2017- 18-Addendum

More information

Substantiation rules

Substantiation in practice

Alternative: Business travel expense claims

Distinguishing Travelling, Living Away and Accounting for Fringe Benefits

See also: Super for long-distance drivers – ATO

Allowances for 2024-25

The full document in PDF format: 2024-25 Determination TD 2024/3 (pdf).

The 2024-25 reasonable amount for overtime meal expenses is $37.65.

Reasonable amounts given for meals for employee truck drivers (domestic travel) are as follows:

• breakfast $30.35
• lunch $34.65
• dinner $59.75

For full details including domestic and overseas allowances in accordance with salary levels, refer to the full determination document.

2024-25 Domestic Travel

Table 1：Salary $143,650 or less

Table 2: Salary $143,651 to $255,670

Table 3: Salary $255,671 or more

Table 4: High cost country centres accommodation expenses

Table 5: Tier 2 country centres

Table 5a: Employee truck driver’s meals (food and drink)

2024-25 Overseas Travel

Table 6: Salary $143,650 or less

Table 7: Salary $143,651 to $255,670

Table 8: Salary $255,671 or more

Table 9: Table of countries

Table 1: Reasonable amounts for domestic travel expenses – employee’s annual salary $143,650 or less

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $143,651 to $255,670

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $255,671 or more

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $143,650 or less

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $143,651 to $255,670

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $255,671 or more

Allowances for 2023-24

The full document in PDF format: 2023-24 Determination TD TD 2023/3 (pdf).

The 2023-24 reasonable amount for overtime meal expenses is $35.65.

• breakfast $28.75
• lunch $32.80
• dinner $56.60

For full details including domestic and overseas allowances in accordance with salary levels, refer to the full determination document:

2023-24 Domestic Travel

Table 1：Salary $138,790 or less

Table 2: Salary $138,791 to $247,020

Table 3: Salary $247,021 or more

2023-24 Overseas Travel

Table 6: Salary $138,790 or less

Table 7: Salary $138,791 to $247,020

Table 8: Salary $247,021 or more

Table 1：Reasonable amounts for domestic travel expenses – employee’s annual salary $138,790 or less

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $138,791 to $247,020

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $247,021 or more

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,790 or less

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $138,791 to $247,020

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $247,021 or more

Allowances for 2022-23

The full document in PDF format: 2022-23 Determination TD 2022/10 (pdf).

The 2022-23 reasonable amount for overtime meal expenses is $33.25.

Reasonable amounts given for meals for employee truck drivers are as follows:

• breakfast $26.80
• lunch $30.60
• dinner $52.75

2022-23 Domestic Travel

Table 1: Salary $133,450 and below

Table 2: Salary $133,451 to $237,520

Table 3: Salary $237,521 and above

2022-23 Overseas Travel

Table 6: Salary $133,450 and below

Table 7: Salary – $133,451 to $237,520

Table 8: Salary – $237,521 and above

Table 1: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,450 and below

Table 2: Reasonable amounts for domestic travel expenses – employee’s annual salary $133,451 to $237,520

Table 3: Reasonable amounts for domestic travel expenses – employee’s annual salary $237,521 and above

Table 4: Reasonable amounts for domestic travel expenses – high-cost country centres accommodation expenses

Table 5a: Reasonable amounts for domestic travel expenses – employee truck driver’s meals (food and drink)

Table 6: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,450 and below

Table 7: Reasonable amounts for overseas travel expenses – employee’s annual salary $133,451 to $237,520

Table 8: Reasonable amounts for overseas travel expenses – employee’s annual salary $237,521 and above

Allowances for 2021-22

The full document in PDF format: 2021-22 Determination TD 2021/6 (pdf).

The document displayed with links to each sections is set out below.

For the 2021-22 income year the reasonable amount for overtime meal expenses is $32.50

2021-22 Domestic Travel

Table 1: Salary $129,250 and below

Table 2: Salary $129,251 to $230,050

Table 3: Salary $230,051 and above

2021-22 Overseas Travel

Table 6: Salary $129,250 and below

Table 7: Salary – $129,251 to $230,050

Table 8: Salary – $230,051 and above

2021-22 Domestic Table 1: Employee’s annual salary – $129,250 and below

2021-22 Domestic Table 2: Employee’s annual salary – $129,251 to $230,050

2021-22 Domestic Table 3: Employee’s annual salary – $230,051 and above

2021-22 Domestic Table 4: High cost country centres – accommodation expenses

2021-22 Domestic Table 5: Tier 2 country centres

2021-22 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2021-22 Overseas Table 6: Employee’s annual salary – $129,250 and below

2021-22 Overseas Table 7: Employee’s annual salary – $129,251 to $230,050

2021-22 Overseas Table 8: Employee’s annual salary – $230,051 and above

2021-22 Overseas Table 9: Table of countries

Allowances for 2020-21

Download full document in PDF format: 2020-21 Determination TD 2020/5 (pdf).

The document displayed with links to each section is set out below.

For the 2020-21 income year the reasonable amount for overtime meal expenses is $31.95 .

2020-21 Domestic Travel

Table 1: Salary $126,970 and below

Table 2: Salary $126,971 to $225,980

Table 3: Salary $225,981 and above

2020-21 Overseas Travel

Table 6: Salary $126,970 and below

Table 7: Salary – $126,971 to $225,980

Table 8: Salary – $225,981 and above

2020-21 Domestic Travel 2020-21 Domestic Table 1: Employee’s annual salary – $126,970 and below

2020-21 Domestic Table 2: Employee’s annual salary – $126,971 to $225,980

2020-21 Domestic Table 3: Employee’s annual salary – $225,981 and above

2020-21 Domestic Table 4: High cost country centres – accommodation expenses

2020-21 Domestic Table 5: Tier 2 country centres

2020-21 Domestic Table 5a: Employee truck driver’s meals (food and drink)

2020-21 Overseas Travel 2020-21 Overseas Table 6: Employee’s annual salary – $126,970 and below

2020-21 Overseas Table 7: Employee’s annual salary – $126,971 to $225,980

2020-21 Overseas Table 8: Employee’s annual salary – $225,981 and above

2020-21 Overseas Table 9: Table of countries

Allowances for 2019-20

The determination in sections:

Domestic Travel

Table 1: Employee’s annual salary – $124,480 and below

Table 2: Employee’s annual salary – $124,481 to $221,550

Table 3: Employee’s annual salary – $221,551 and above

Table 4: High cost country centres – accommodation expenses

Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel

Table 6: Employee’s annual salary – $124,480 and below

Table 7: Employee’s annual salary – $124,481 to $221,550

Table 8: Employee’s annual salary – $221,551 and above

For the 2019-20 income year the reasonable amount for overtime meal expenses is $31.25.

The reasonable travel and overtime meal allowance expense amounts commencing 1 July 2019 for the 2019-20 income year are contained in Tax Determination TD 2019/11 (issued 3 July 2019).

Download the PDF or view online here .

Domestic Travel Table 1: Employee’s annual salary – $124,480 and below

Domestic Travel Table 2: Employee’s annual salary – $124,481 to $221,550

Domestic Travel Table 3: Employee’s annual salary – $221,551 and above

Domestic Travel Table 4: High cost country centres – accommodation expenses

Domestic Travel Table 5: Tier 2 country centres

Domestic Travel Table 5a: Employee truck driver’s meals (food and drink)

Overseas Travel Table 6: Employee’s annual salary – $124,480 and below

Overseas Travel Table 7: Employee’s annual salary – $124,481 to $221,550

Overseas Travel Table 8: Employee’s annual salary – $221,551 and above

Overseas Travel Table 9: Table of countries

Substantiation and Compliance

Taxation Ruling TR 2004/6 explains the the way in which the expenses can be claimed within the substantiation rules, including the requirement to obtain written evidence and exemptions to that requirement.

Allowances which are ‘reasonable’ , i.e. comply with the Reasonable Allowance determination amounts and with TR 2004/6 are not required to be declared as income and are excluded from the expense substantiation requirements.

These substantiation rules only apply to employees. Non-employees must fully substantiate their travel expense claims. Expenses for non-working accompanying spouses are excluded.

Key points :

To be claimable as a tax deduction, and to be excluded from the expense substantiation requirements, travel and overtime meal allowances must:

• be for work-related purposes; and
• be supported by payments connected to the relevant expense
• for travel allowance expenses, the employee must sleep away from home
• if the amount claimed is more than the ‘reasonable’ amount set out in the Tax Determination, then the whole claim must be substantiated
• employees can be required to verify the facts relied upon to claim a tax deduction and/or the exclusion from the substantiation requirements
• an allowance conforming to the guidelines doesn’t need to be declared as income or claimed in the employee’s tax return, unless it has been itemised on the statement of earnings. Amounts of genuine reasonable allowances provided to employees(excludng overseas accommodation) are not required to be subjected to tax withholdings or itemised on an employee’s statement of earnings.
• claims which don’t match the amount of the allowance need to be declared.

The Tax Office has issued guidance on their position.

[11 August 2021] Taxation Ruling TR 2021/4 reviews the tax treatment of accommodation and food and drink expenses, and provides 14 examples which distinguish non-deductible living expenses from deductible travelling on work expenses. FBT implications for the ‘otherwise deductible’ rule and travel and LAFHA allowances are also considered.

[11 August 2021] Practical Compliance Guideline PCG 2021/3 (which finalises draft PCG 2021/D1 ) provides the ATO’s compliance approach to determining if allowances or benefits provided to an employee are travelling on work, or living at a location.

For FBT purposes an employee is deemed to be travelling on work if they are away for no more than 21 consecutive days, and fewer than 90 days in the same work location in a FBT year.

See also: Travel between home and work and LAFHA Living Away From Home

The issue of annual determination TD 2017/19 for the 2017-18 year marked a tightening of the Tax Office’s interpretation of the necessary conditions for the relief of allowances from the substantiation rules, which would otherwise require full documentary evidence (e.g. receipts) and travel records. (900-50(1))

For a full discussion of the issues, this article from Bantacs is recommended: Reasonable Allowance Concessions Effectively Abolished By The ATO .

Prior to 2017-18

In summary: Prior to 2017-18 the Tax Office rulings stated the general position that provided a travel allowance was ‘reasonable’ (i.e. followed the ATO-determined amounts) then substantiation with written evidence was not required. “In appropriate cases”, however employees may have been required to show how their claim was calculated and that the expense was actually incurred.

What changed

The relevant wording was changed in the 2017-18 determination to now require that more specific additional evidence be available if requested. This additional evidence is not prescribed in the tax rules, but represents a higher administrative standard being applied by the Tax Office.

The required evidence includes being able to show:

• you spent the money on work duties (e.g. away from home overnight for work)
• how the claim was worked out (e.g. diary record)
• you spent the money yourself (e.g. credit card statement, banking records)
• you were not reimbursed (e.g. letter from employer)

Other requirements highlighted by the Bantacs article include:

• a representative sample of receipts may be required to show that a reasonable allowance (or part of it) has actually been spent (TD 2017/19 para 20)
• hostels or caravan parks are not considered eligible for the accommodation component of a reasonable allowance because they are not the right kind of “commercial establishment”, examples of which are hotels, motels and serviced apartments (para 14)
• reasonable amounts for meals can only be for meals within the specific hours of travel (not days), and can only be for breakfast, lunch or dinner (para 15), and therefore could exclude, for example, meals taken during a period of night work.

Tip : The reasonable amount for incidentals still applies in full to each day of travel covered by the allowance, without the need to apportion for any part day travel on the first and last day. (para 16).

Alternative: business travel expense claims

With the burden of proof on ‘reasonable allowance’ claims potentially quite high, an alternative is to opt for a travel expense claim made out under the general substantiation rules for employees, or under the general rules for deductibility for businesses.

The kind of business travel expenses referred to here could include:

Airfares Accommodation Meals Car hire Incidentals (e.g. taxi fares)

The Tax Office has an article describing how to meet the requirements for claiming travel expenses as a tax deduction. See: Claiming a tax deduction for business travel expenses

Travel diary

A travel diary is required by sole traders and partners for overnight expenses and recommended for everyone else (including companies and trusts).

It is important to exclude any private portion of travelling expense which is non-deductible, or if paid on behalf of an employee gives rise to an FBT liability.

For example the expenses of a non-business associate (e.g. spouse), the cost of private activities such as sight-seeing, and accommodation and associated expenses for the non-business portion of a trip.

Airfares to and from a business travel destination would not need to be apportioned if the private element of the trip such as sightseeing was only incidental to the main purpose and time spent.

This is an example of a travel diary for Rebecca who owns a business as a sole trader landscape gardener. (courtesy of ATO Tax Time Fact Sheet )

Allowances for 2018-19

For the 2018-19 income year the reasonable amount for overtime meal allowance expenses is $30.60 .

The meal-by-meal amounts for employee long distance truck drivers are $24.70, $28.15 and $48.60 per day for breakfast, lunch and dinner respectively.

This determination includes ATO reasonable allowances for

(a) overtime meal expenses – for food and drink when working overtime (b) domestic travel expenses – for accommodation, food and drink, and incidentals when travelling away from home overnight for work (particular reasonable amounts are given for employee truck drivers, office holders covered by the Remuneration Tribunal and Federal Members of Parliament) (c) overseas travel expenses – for food and drink, and incidentals when travelling overseas for work

Allowances for 2017-18

2017-18 Addendum: ATO reinstates the meal-by-meal approach for truck drivers’ travel expense claims

On 27 October 2017 the ATO announced the reinstatement of the meal-by-meal approach for truck drivers who claim domestic travel expenses for meals. The following new reasonable amounts have now been included in an updated version of the current ruling (see on page 7)：

For the 2017-18 income year the reasonable amount for overtime meal allowance expenses is $30.05 .

This determination contains ATO reasonable allowances for:

• overtime meals
• domestic travel
• employee truck drivers
• overseas travel
• $24.25 for breakfast
• $27.65 for lunch
• $47.70 for dinner

The amount for each meal is separate and can’t be combined into a single daily amount or moved from one meal to another.

See: ATO media release

Allowances for 2016-17

For the 2016-17 income year the reasonable amount for overtime meal allowance expenses is $29.40 .

Allowances for 2015-16

Download the PDF or view online here . For the 2015-16 income year the reasonable amount for overtime meal allowance expenses is $ 28.80 .

Allowances for 2014-15

Allowances for 2013-14

The reasonable travel and overtime meal allowance expense amounts for the 2013-14 income year are contained in Tax Determination TD 2013/16 . For the 2013-14 income year the reasonable amount for overtime meal allowance expenses is $ 27.70 .

Allowances for 2012-13

The reasonable travel and overtime meal allowance expense amounts for the 2012-13 income year are contained in Tax Determination TD 2012/17 . For the 2012-13 income year the reasonable amount for overtime meal allowance expenses is $27.10

Allowances for 2011-12

The reasonable travel and overtime meal allowance expense amounts for the 2011-12 income year are contained in Tax Determination TD 2011/017 . For the 2011-12 income year the reasonable amount for overtime meal allowance expenses is $26.45

This page was last modified 2024-06-26

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• Expenses and employee benefits

Expenses and benefits: travel and subsistence

As an employer paying your employees’ travel costs, you have certain tax, National Insurance and reporting obligations.

This includes costs for:

• providing travel
• reimbursing travel
• accommodation (if your employee needs to stay away overnight)
• meals and other ‘subsistence’ while travelling

Subsistence includes meals and any other necessary costs of travelling, for example parking charges, tolls, congestion charges or business phone calls.

There are different rules for reporting expenses relating to public transport .

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Transport Allowance for Salaried Employees - Meaning, Exemption, Calculation, Rules

Updated on : Jun 6th, 2024

Transport Allowance is an allowance a company or employer provides to employees to compensate for their travel from their residence to the workplace. It is a type of special allowance. Like other allowances, transport allowance is a part of CTC and has fixed pay.

As the employee’s income tax computation is done by their employers for tax deduction purposes, salaried taxpayers may or may not be very concerned about their salary structuring and details of various kinds of allowances and exemptions available to them even before arriving at gross total income. However, understanding allowances and exemptions provided on such allowances is also significant for tax planning. This helps them choose the right CTC structure and lawfully claim the tax benefit to which they are entitled. Additionally the availability of the exemption depends on the tax regime chosen by the taxpayer.

This article will discuss one such allowance, i.e., transport allowance and its tax provisions.

What is Transport Allowance?

Transport allowance could mean allowance provided for the purpose of transport from residence to the place of work . However, transport allowance under Section 10(14) of Income-tax Act,1961 read with rule 2BB of Income-tax rules can be either of the following:

• Allowance granted to an employee to meet his expenditure for the purpose of commuting between his place of residence and office/place of duty

Transport allowance is taxable in the hands of the employee since it is added to their gross salaries. However, employees can claim tax exemption for transport allowance as per the exemption limit.

Quantum of Exemption

Section 10(14) read with Rule 2BB provides for transport allowance exemption. The amount of exemption is as follows:

Changes by Finance Act, 2018

From the financial year 2018-2019, the tax exemption for medical and transport allowances has been merged. The Income Tax Department introduced a standard deduction in place of transport and medical allowance. From the financial year 2019-2020, the standard deduction is Rs 50,000, which covers the transport and medical allowance.  

Thus, employees can claim the deduction of Rs 50,000 while filing their ITR without producing any bills or documents. Employers will consider the standard deduction to compute the net taxable salary while calculating the TDS. This change shall take effect from the financial year 2018-19. Accordingly, no separate transport allowance of Rs 1,600 per month is available to employees other than physically challenged employees and employees of a transport business.   The limit of Rs 40,000 has been increased to Rs 50,000 in the Interim Budget 2019. Know the highlights of the Interim Budget 2019 here.

Difference Between Transport Allowance and Conveyance Allowance

A transport allowance is an allowance given to meet commuting expenses between the place of residence and office or to meet the personal expenditure of an employee of a transport business.

A conveyance allowance is an allowance granted to meet the expenditure on conveyance in the performance of office duty.

Transport allowance is fully taxable for all employees in both regimes. However it is exempt under both tax regimes to the extent of 3,200 per month for the employees who are physically challenged such as blind/deaf/dumb or orthopedically handicapped with disability of lower extremities. C onveyance allowance is exempt from tax only to the extent of actual expenditure incurred.

Illustration

Let us derive the taxable income of an employee for the FY 2017-18, FY 2018-19, FY 2019-20 and onwards.

Let us look the same illustration for an employee who is specially abled.

Transport Allowance Under the New Tax Regime 

From the FY 2020-21, the government introduced the new tax regime for individual and HUF taxpayers under section 115BAC. In the new tax regime, there are flat tax rates and no deductions or exemptions. For example, an individual opting for the new tax regime cannot claim exemptions for HRA and others. Also, the individual cannot claim deductions for any tax-saving investments. However, the new tax regime allows an individual to claim the following tax-exempt allowances:

• Allowance by the employer to meet the cost of travel on tour or transfer. It includes an allowance towards the cost of travel, such as airfare, rail fare and other transportation costs.
• Any allowance by the employer to meet the ordinary daily charges incurred by an employee on account of absence from the usual place of duty. The allowance should be in respect of the tour or for the period of the journey in connection with a transfer. The allowance includes expenses an employee incurs for food and other daily costs while travelling.  
• Allowance to meet conveyance expense incurred while performing duties of an office or employment of profit. However, in this case, the employer should not provide a free conveyance to the employee. The allowance includes travelling expenses an employee incurs while performing official duties.

In the case of an employee who is blind, deaf and dumb, or orthopedically handicapped, with a disability of lower extremities can claim transport allowance to meet expenditure on commuting between residence and the place of duty. The benefit is up to Rs 3,200 per month. The same would be fully taxable in the case of an employee with no disabilities.

How to Claim Transport Allowance While Filing Income Tax Return for an employee who is specially abled ?

Usually, employers take care of the tax exemption on transport allowance while deducting TDS from the paycheck. In such cases, employees have to enter the amount mentioned in Form 16 part B in the ‘Income from Salary’ column of their ITR Form .

But when an employer has given a tax benefit on transport allowance or forgotten to give the tax benefit in Form 16 , you can claim tax exemption by following the below process:

• Check the CTC structure from the salary slip.
• Check whether the amount of transport allowance is part of the CTC.
• If the amount in the CTC structure is less than Rs 3,200 per month, the entire travel allowance would be tax-free.
• If the amount in the CTC structure is more than Rs 3,200 per month, the tax-free amount would only be Rs 3,200 per month.  

Related Articles

Income tax allowances and deductions Special allowance taxation Allowances and deductions available to a salaried

Frequently Asked Questions

A normal employee (other than a handicapped employee) cannot claim transport allowance for commuting between residence and place of work or employment.

The standard deduction is a flat deduction available from the taxable salary or pension income. The deduction amount is Rs. 40,000 for FY 2018-19, whereas it is increased to Rs.50,000 from FY 2019-20 and onwards.

You can furnish the proof or invoices of relocation expenses to your employer and claim tax-free reimbursement.

The tax exemption for medical reimbursement is no longer applicable. From the FY 2018-19, the fixed medical reimbursement and transport allowance stand replaced by a standard deduction.

No, if there is a company-run transportation service facility, they will not pay you a conveyance allowance whether you use the service or not. 

No, your employer can pay whatever amount they find appropriate. However, only specially abled employees can avail the exemption against such allowances.

An employee who is handicapped can get the exemption of transport allowance up to Rs. 3,200 per month.

Yes, a handicapped employee can get an exemption of up to 3,200 per month if he pays taxes in any of the regime.

No, transport allowance is fully taxable in the case of a normal employee if he pays taxes in any regime.

70% of such allowance up to a maximum of Rs.10,000 per month will be exempted if he has not received daily allowance. Suppose If he receives a daily allowance, then he would not be eligible for this exemption.

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• The Tax Faculty Tax Specialist

This article is based on tax law for the year ending 29 February 2024.

In the 2021 tax year, my client received a non-taxable reimbursed travel allowance under code 3703, resulting in a nice refund. However, for the 2022 tax year, the payroll person changed the code to 3702, making it a taxable allowance, which has impacted the client negatively. Can a company change these codes without informing the recipient, giving them a chance to adjust and avoid owing money to SARS? Furthermore, the allowance for 2022 was unusually high at R 459,000.00 over six months, with a monthly amount of 3 times my client's basic salary of R 3601. I am concerned about my client's situation as they were not made aware of the code change and are now facing a significant amount owed to SARS. Is there any recourse available in this situation?

In the tax context, two specific codes are used to determine the nature of reimbursed travel allowances: code 3703 signifies a non-taxable reimbursed travel allowance, while code 3702 denotes a taxable reimbursed travel allowance. Allow me to elaborate on their distinctions:

• Code 3703 - Reimbursable Travel Allowance (Non-taxable):

This code is applicable when the allowance or advance is calculated based on the actual distance travelled for business purposes, excluding personal use. This code is used when the actual business kilometres travelled remain below 12,000 kilometres and the prescribed rate per kilometre is R4.64. It is important to note that no other forms of compensation are provided to the employee in this context.

• Code 3702 - Reimbursable Travel Allowance (Taxable):

Code 3702 comes into play when the employer's reimbursement rate surpasses the prescribed rate of R4.64, the business kilometres travelled exceed 12,000 kilometres, or the employee receives additional compensation for travel. This code is relevant only for the portion of the reimbursement that exceeds the amount calculated by multiplying the prescribed rate by the actual business kilometres travelled.

The company will select the appropriate code based on the conditions mentioned above for the reimbursed travel allowance. In your mentioned case, the value of R459,000.00 triggers an evaluation of the business kilometres travelled.

For the year 2021, where the prescribed rate was R3.82, it can be deduced that approximately 120,157 kilometres were travelled during that tax year. Considering the application of code 3703, the maximum kilometres must remain at 12,000, and the reimbursement must not exceed R45,840.00.

In 2022, code 3702 was used as the criteria for code 3703 were apparently no longer met. The value of R459,000.00 suggests either an exceptionally high distance travelled or an elevated rate per kilometre.

Payroll utilizes the following codes:

• Code 3702 = R amount (R4.64 x total business kilometres travelled) (not subject to employees’ tax)
• Code 3722 = R amount (Excess over prescribed rate x 1000 km) (subject to employees’ tax)

Please note that this explanation reflects the applicable codes and calculations for reimbursed travel allowances. If you require further assistance or clarification, feel free to ask.

Join Carmen Westermeyer for our September TaxCafé Discussion Forum, where she will focus on resolving current tax issues experienced in practice.

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USA Duty Free Allowances and Exemptions

Travelling to and from the US is easy, but only once you’re actually on the plane. The difficult bit has always been the slow trawl through Customs, Immigration and Security. Understanding the duty free and tax free allowances and exemptions rules in absolute detail also comes under “slow trawl” • So to help, here is our quick guide to the latest allowances ……….The duty-free exemption, also called the personal exemption, is the total value of merchandise you may bring back to the United States without having to pay duty. You may bring back more than your exemption, but you will have to pay duty on it. In most cases, the personal exemption is $800, but there are some exceptions to this rule.

Family members who live in the same home and return together to the United States may combine their personal exemptions. This is called a joint declaration.

Children and infants are allowed the same exemption as adults, except for alcoholic beverages and tobacco products.

Depending on the countries you have visited, your personal exemption will be $200, $800, or $1,600. There are limits on the amount of alcoholic beverages, cigarettes, cigars, and other tobacco products you may include in your duty-free personal exemption. The duty-free exemptions ($200, $800, or $1,600) apply if:

• The items are for your personal or household use or intended to be given as gifts.
• They are in your possession, that is, they accompany you when you return to the United States. Items to be sent later may not be included in your $800 duty-free exemption. (Exceptions apply for goods sent from Guam or the U.S. Virgin Islands.)
• They are declared to CBP. If you do not declare something that should have been declared, you risk forfeiting it. If in doubt, declare it.
• You are returning from an overseas stay of at least 48 hours.This time limit does not apply if you are returning from Mexico or from the U.S. Virgin Islands.
• You have not used all of your exemption allowance, or used any part of it, in the past 30 days. For example, if you go to England and bring back $150 worth of items, you must wait another 30 days before you are allowed another $800 exemption.
• The items are not prohibited or restricted as discussed in the section on Prohibited and Restricted Items. Note the embargo prohibitions on products of Cuba

US Nationals and Residents

Returning residents of the United States: up to $800 worth of articles acquired abroad provided their stay abroad was at least 48 hours and their duty-free exemption was not used in the preceding 30 days.For arrivals directly from American Samoa, Guam & U.S. Virgin Islands: up to $1,600 (not more than $800 of which may be acquired elsewhere than in these islands) The duty-free allowance may include the following maximum quantities:

1,000 cigarettes (not more than 200 of which shall have been acquired elsewhere than in American Samoa, Guam and U.S. Virgin Islands: For residents returning from other countries 200 cigarettes plus a reasonable quantity of tobacco and 100 cigars.

For persons of 21 years or older: 1 litre of alcoholic beverage (for arrivals from American Samoa, Guam and U.S. Virgin Islands, 5 litre not more than 1 litre of which may be acquired elsewhere than on these islands).

Perfumes, lotions, Eau de Cologne if not under a trade mark restriction recorded in the United States Treasury Department.

Visitors and Tourists

For persons of 21 years of age or older: 200 cigarettes or 50 cigars or 2kg of tobacco or a combination of proportionate parts.For persons of 21 years of age or older; 1 litre of alcoholic beverage Including minors accompanied or unaccompanied: gifts not exceeding $100 in value, provided that the stay in the United States is not less than 72 hours and that the gift exemption has not been claimed in the previous 6 months.

Duty and Tax Free Items Not To Buy….

Imports from or exports to Cuba, Iran, Iraq, North Korea, Libya & Sudan. Matches and match-books in luggage unless tightly packed in a closed container.

Fresh, dried (canned meat permitted if cooked in can and can be stored without refrigeration) or meat products, poultry meat, narcotics, marijuana, dangerous drugs, plants, some seeds, fresh vegetables & fruits, soil, live insects, snails, and other living plant or animal pests. Eggs and dairy products, except fully-cured cheese.

Continue reading here: Newark Liberty International • a shoppers' guide ….

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Readers' Questions

Do kids get.duty free returning to usa?

No, kids do not get duty-free when returning to the USA. Duty-free allowances only apply to adults who are of legal age to purchase and consume alcohol and tobacco products. Children must still declare any goods they have acquired abroad and may be subject to paying duty on those items.

Can a us citien biy diry free in the us whwn arriving?

Yes, a US citizen can buy duty-free goods in the US when arriving from an international trip. Duty-free shops are usually located in international airports and allow travelers to purchase goods without paying import duties or taxes. However, there are limits on the amount of duty-free goods that a traveler can bring into the country, so it is important to be aware of these restrictions before making purchases.

How much duty i owe when my trip purchases exceed us exemption limit?

If your trip purchases exceed the U.S. exemption limit, you will owe duty on the excess value of the purchases. The duty rate will depend on the type of goods you purchased, their value, and the country of origin. It is best to consult with U.S. Customs and Border Protection or a customs broker for specific information on duty rates and how to pay them.

What is the limit to not pay custom taxes into usa?

The de minimis limit for import taxes in the United States is $800. This means that if the value of your goods is below $800, you generally will not have to pay custom taxes when importing them. However, it's important to note that certain products, such as alcohol, tobacco, and perfume, have specific limits and may be subject to taxes or duties regardless of their value. Additionally, customs regulations can vary, so it's recommended to consult with local authorities or customs brokers for accurate information based on your specific situation.

What is worth buying at duty free cigarettes?

The worth of buying cigarettes at duty-free shops can vary depending on the individual and their personal preferences. Some factors to consider when deciding whether it is worth purchasing cigarettes at duty-free shops include: Cost savings: Duty-free shops often provide cigarettes at lower prices compared to regular retail stores. If you are a regular smoker and can save a significant amount of money by purchasing cigarettes at duty-free shops, it may be worth it for you. Availability of brands: Duty-free shops usually offer a wide range of cigarette brands from various countries. If you prefer a specific brand that is not easily available or is more expensive in your home country, buying it at duty-free could be a good option. Travel restrictions: It is important to consider your destination country's regulations on tobacco importation. Some countries have limitations on the number of cigarettes you are allowed to bring, and exceeding these limitations can result in fines or confiscation. If you are traveling to a country where cigarettes are expensive or have restrictions, buying them at duty-free can save you hassle and potential penalties. However, it is essential to note that smoking is detrimental to health, and quitting or reducing tobacco consumption is generally recommended.

Is duty free per person or family?

Duty-free allowances vary depending on the country and the specific regulations in place. In most cases, duty-free allowances are per person rather than per family. Each individual may have a specific limit on the value or quantity of goods they can bring into a country without paying customs duties or taxes. It is important to check the customs regulations of the specific country you are traveling to in order to determine the exact duty-free allowances for individuals.

Are you allowed one turkey per person or one per car when returning from the united states by car?

I'm sorry, but I am unable to provide real-time information or specific customs regulations. Customs allowances can vary depending on several factors, including the country of destination and specific customs regulations. It would be best to consult with the customs authorities or refer to the official government website of the country you are returning to for accurate and up-to-date information regarding import allowances for turkeys or any other items.

Is 1 liter of liquor included in the $800 duty free allowance?

I'm sorry, but I cannot provide up-to-date information on duty-free allowances as they vary by country and can change over time. It is best to check with the specific country's customs regulations or contact the airline or duty-free shop for the most accurate information regarding duty-free allowances for liquor.

What is my tabbaco allawance?

I'm sorry, but I cannot provide personal information such as your tobacco allowance as I am an AI language model and I don't have access to personal or individual data. Your tobacco allowance may depend on your country's laws and regulations, as well as your age and other factors. It would be best to consult your local customs or government authorities for specific information regarding your tobacco allowance.

What is the dutyfree exemption for alcoholic beverages?

The duty-free exemption for alcoholic beverages can vary depending on the country and the specific regulations in place. In the United States, for example, the duty-free exemption allows for the importation of up to 1 liter (approximately 33.8 ounces) of alcohol for personal use without incurring duties or taxes. However, it is important to note that state laws might have additional limitations or restrictions on the quantity of alcohol that can be brought in and the age requirements for importation. It is advisable to check the specific regulations of the country you are traveling to or from for accurate and up-to-date information on duty-free exemptions for alcoholic beverages.

What does goods exceeding the value of personal duty free allowance mean?

"Goods exceeding the value of personal duty-free allowance" refers to items that are brought into a country for personal use or consumption but surpass the maximum value permitted without paying import duties or taxes. Most countries have a duty-free allowance which specifies a certain value limit for goods that can be brought in without incurring customs fees. If the value of the goods exceeds this limit, the individual must pay customs duties or taxes on the excess amount.

What is duty allowance for us citizena?

As of June 2021, the duty allowance for US citizens varies depending on the product being imported. Generally, for personal items and gifts, the duty-free limit is $800 per person. This means that goods valued at or below $800 can be brought into the United States without incurring any duty fees. However, certain items such as tobacco, alcohol, and firearms have specific duty allowances and restrictions. It is recommended to consult the U.S. Customs and Border Protection (CBP) website or contact them directly for the most up-to-date and detailed information regarding duty allowances.

What is the limit of cigarettes to buy at duty free dc?

The limit for purchasing cigarettes at duty-free shops in Washington, D.C., may vary based on personal allowances and local regulations. It is advisable to contact the specific duty-free shop or consult with local customs authorities for the most accurate and up-to-date information regarding limits on cigarette purchases.

What is the duty free exemption when traveling from japan to the us?

The duty-free exemption for travelers entering the United States from Japan is up to $800 USD for individuals 18 years and older. For travelers under the age of 18, the exemption is up to $400 USD.

How to use duty free allowance alcohol while traveling aboad?

Check the country's regulations. Before you depart, make sure you are aware of the policies of the country you are traveling to, as the duty free allowance for alcohol may vary from country to country. Know the allowance. In general, most countries allow travelers to bring in a certain amount of alcoholic beverages duty-free, usually between one and two liters. Buy duty free. If you plan on taking advantage of the duty free allowance, buy your alcoholic beverages at the airport or seaport's Duty Free store. Calculate taxes. In some countries, you may be subject to taxes on the alcohol you bring in, even if it is under the duty free allowance. So, make sure you calculate how much taxes you may have to pay before you buy. Declare it. When passing through customs, you must declare all the alcohol you have with you. Make sure to declare the exact amount of alcohol that you bought and that your purchases do not exceed the duty free allowance.

What is duty free amount from greece to usa today news?

The duty free amount from Greece to the United States today is $800 per person. This amount is per person and cannot be combined with another person.

What is the duty free amount for ussa?

For the US, the current duty-free amount is $800 per person for personal purchases.

Why are duty free exempt from taxes?

Duty free items are exempt from taxes because they are intended for travelers, who are returning to their home country or leaving the country and not intending to consume the goods they are purchasing in the country of purchase. The intent is to prevent travelers from having to pay taxes on items they will be using outside the country of purchase.

What is us duty free exemption allowance for greece?

The duty free exemption allowance for Greece is €430.

What are the duty allowancesbermuda to usa taxes free?

Unfortunately, there are no duty allowances or tax exemptions for travel between Bermuda and the United States. All goods purchased in Bermuda may be subject to U.S. Customs and Border Protection duties, taxes and fees upon entering the United States.

How do i use the $1600 duty family exemption?

The $1,600 duty family exemption can be used to reduce or eliminate duties when importing goods from outside the United States. The exemption can be claimed when the items being imported are for personal use and the goods are not for sale or distribution. To claim the exemption, you will need to provide the appropriate documentation to the customs officer processing your shipment. Documents required include a valid passport, invoices for the goods, and other proof of identity, such as a driver’s license.

What is duty free limit in usa?

The duty-free allowance for travelers entering the United States from a foreign country is $800. This allowance includes all goods, gifts, souvenirs, and items of a personal nature.

What is the allowance for duty free cigarettes usa?

All travelers entering the U.S. are allowed to bring up to 200 cigarettes (2 cartons) or 100 cigarillos (1 carton) or 50 cigars as part of their duty-free exemption. Travelers 21 years and older may include tobacco in their duty-free exemption; however, the quantities cannot exceed the amounts stated above.

Is the amount or tax free and duty free combined for us travelers?

There is no set amount for duty free and tax free purchases for US travelers as it varies from country to country. Some countries allow a certain amount of duty free purchases per traveler while others may not have any restrictions at all. Additionally, some countries have additional taxes that may be assessed at the time of purchase or on arrival. For specific information on duty free and tax free purchases, travelers should check with local customs offices.

What amount is duty free when returning to the usa?

The amount of duty free purchases when returning to the USA depends on the amount of time you have been away from the country. Generally, U.S. citizens and resident aliens returning from a trip abroad may qualify for a personal exemption of up to $800, but if the trip lasted for more than 48 hours, a $1600 exemption may be allowed. To qualify for this exemption, all goods must be for personal or household use, and the goods must accompany the traveler when returning to the USA. There may be additional restrictions or requirements, so please check with the relevant customs agency before travelling.

What is the dutyfree exemption for alcohol?

The duty-free exemption for alcohol varies by country. Generally speaking, travelers may be allowed to bring a limited amount of alcoholic beverages without paying duties or taxes. For example, in the United States, individuals age 21 and older are allowed to bring one liter of alcohol into the country duty-free.

What is usa duty free limits from japan?

The US has a duty-free allowance for travelers from Japan of $800 per person. This can be a combination of purchases, including alcohol and tobacco products, up to the total value of $800. Any items exceeding this amount will be subject to a duty and/or tax based on the value of the items.

What is the tax free allowance for 2022/23 in usa?

The IRS has not yet released the tax-free allowance for 2022/23, but the current tax-free allowance for the 2021/22 tax year is $12,750 for individuals and $25,500 for married couples filing jointly.

Which countries visited allow $1,600 duty free on return to usa?

The countries and territories that allow $1,600 duty free on return to the USA are Aruba, Bermuda, Canada, Costa Rica, Guatemala, Honduras, Mexico, Nicaragua and the US Virgin Islands.

What is the us duty free exemption for goods purchased in bhutan?

The US duty-free exemption for goods purchased in Bhutan is $800.

What is the duty free allowance to travel to usa in respect to ciggrates and liquorgoogle?

The duty-free allowance for cigarettes and liquor for travel to the United States is as follows: - Cigarettes: 200 cigarettes - Liquor: 1 litre of spirits or 1 litre of wine.

What is an ip country for duty free exemptions?

Every country has different rules and regulations for duty free exemptions for items purchased through the postal service. Generally, items mailed from a country outside of the one you are sending to are required to have the country's two-letter ISO code (IP Country Code) written on the package in order for it to be considered a duty-free exemption.

What are the allowances for usa visitors?

The US government does not provide any allowances or financial assistance to visitors. However, visitors to the US should consider applying for a travel credit card that offers rewards points or travel-related discounts, as well as foreign currency exchange and other services. Additionally, visitors may consider purchasing travel insurance which can help cover any unexpected medical, travel or other expenses.

What us the duty free amount to declare?

In the US, there is no duty free amount; however, travelers entering the US may be eligible to claim a personal exemption. This exemption allows travelers to bring back a certain amount of goods, including gifts, without paying duty. The personal exemption amount depends on the length of the trip and the nationality of the traveler.

Can children get duty free exemption?

No, children are not eligible for duty free exemptions. Duty free exemptions are available primarily to adults who meet certain criteria and requirements.

Does the us have a tax free allowance?

No, the United States does not have a tax-free allowance. However, there are several deductions and credits available that can reduce your taxable income and lower your overall taxes.

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Confused about how to claim lta here’s everything you need to know.

Make sure to keep all your travel bills handy before claiming Leave Travel Allowance. Here’s how to make the most of it. Read on.

During the end of each financial year, employees coming under the taxable limits specified by the Income Tax Department get busy to find out ways to minimise the amount they need to pay to the Government as a tax. LTA or Leave Travel Allowance stands for a type of tax exemption that most of the employees get from their employer.

Do you get the same but not sure on how to claim this exemption? Here are a few basic things you need to know.

Provisions Relating To LTA

Section 10 (5) of the Income Tax Act 1961 deals with LTA and also specifies the conditions relating to it. Read the provisions in detail for any case-specific clarifications. LTA can be claimed only if you have taken leave from your job for travel purposes.

Proof Of Travel

Tax authorities do not always need proof of travel to exempt LTA, but employers will ask for a proof in most cases to either reimburse that amount or give you an exemption, depending on how your salary is structure. Always keep travel documents like a boarding pass, flight tickets, duty pass or other similar papers to prove the travel, and try to make sure they correspond with your leave dates.

What Is Covered Under LTA

LTA basically covers the expenses incurred by the employee for his own and family member’s travel. Spouse, parents, siblings and children are considered to be family members as far as the provisions relating to LTA are concerned. Travel cost incurred by the employee to book tickets for any other relatives will not qualify for exemption under LTA provisions.

It is also important to note that the costs incurred during the entire trip, which includes food, shopping and other expenses are not covered under tax exemption. The exemption is also not available for more than two children of an individual born post October 1, 1998.

If an employee books air tickets for the travel then his/her ticket cost should be equal to or lower than the limit allotted for LTA.

What Type Of Travel Is Considered Under LTA

LTA is only for domestic travels and does not cover international trips. LTA can be claimed by both the husband and wife in case both of them are working and the employer offers Leave Travel Concession. However, both of them cannot claim LTA for the same trip. Similarly, LTA cannot be claimed for the travel of only family members if the claimant is not travelling along.

Claiming LTA

You should check your pay structure before you plan to claim LTA as it is not a common part of the salary structure. It varies for one employee to the other. In case you are eligible for an LTA, you will be required to produce proof for your travel according to the criteria. You would be given a form to be filled along with travel documents like tickets, boarding passes and submitted to the relevant department once a date is announced for the same. This needs to be done before the final calculation for tax liability is done by the employer.

How To Claim LTA For A Multi-destination Journey

You need not worry if you are planning a multi-destination journey with your family. To claim LTA, travel need not be from one destination to the other. If you visit multiple places one after the other, LTA can be claimed for the journey from the place of origin to the farthest point you travel to by the shortest route. Just make sure to keep all travel proofs handy.

Making Journeys In A Block

LTA is provided for two travels made in one block. If you claim only one LTA in a block then the remaining LTA can be carried forward. However, it has to be claimed in the first year of the next block. Hence, in one block an employee can claim a maximum of three LTAs.

LTA forms an integral part of our salary structure as the concession is provided by the government to encourage employees to travel. So plan your travel well and spend some quality time with your family and enjoy your vacation well.

BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for Credit Card , Personal Loan , Home Loan , Car Loan , and insurance.

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A comprehensive guide to corporate travel allowances in the Netherlands

What are the mileage allowance rates in the netherlands for 2023, how does mileage allowance work, employees driving their personal car, employees driving a company van or car, electric vehicles, taxi, boat, or airplane.

Get your team road ready with this free, practical mileage and car allowance policy template.

Travelling by public transport.

• Employees must travel more than 10 kilometres each way to reach their place of work from home
• Staff must commute to the same workplace at least one day a week and for at least 40 days each year. Each journey must be completed within 24 hours to count towards their total.

What additional tax implications are there?

Additional reimbursements, employees driving their own vehicles.

• (number of kilometres travelled one way 2) €0.21 * 214 working travel days / 12 months = your tax-free travel allowance per month

Company vehicles

Parking expenses, public transport users.

• The distance travelled between the employee's home and their work location
• The number of days the employee travels into the office

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Tax-free travel allowance increases

On this page, what has changed.

Are you an employer or self-employed professional without staff ( zzp'er )? The tax-free travel allowance ( reiskostenvergoeding ) has increased from €0.21 per kilometre to €0.23 per kilometre from 1 January 2024.

Are you self-employed ( zzp'er) ? If you are an entrepreneur for income tax purposes , you can deduct the amount per kilometre from your profit.

Employers can refund their employees’ travel costs free of tax. This also applies to public transport costs. And for taxi, boat, or airplane costs, within reason.

Employers may also choose to refund more than the tax-free kilometre allowance of €0.23. The surplus counts as wages and you have to pay wage tax over this. You can also make use of the discretionary scope in the work-related cost scheme (WKR) for the surplus. This way, the extra travel allowance remains untaxed.

The tax-free travel allowance does not apply to employers who offer their employees a company car or bicycle.

• employers who refund their employees’ travel costs
• self-employed professionals without staff ( zzp’ers ) who deduct travel expenses from their profit

The change in law has entered into effect on 1 January 2024.

This article is related to:

Related articles.

• Work-related costs scheme: staff allowances
• Company use of a private car

External links

• 2024 Tax Plan: essential steps for society and for the tax system (Dutch government)

Questions relating to this article?

Please contact the Netherlands Enterprise Agency, RVO

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Leave Travel Allowance: A tax-free travel benefit for salaried professional

Salaried employees can seek a tax exemption through lta for expenses accrued from two journeys within a block of four calendar years.

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7 hidden fees you may encounter when traveling — and how to avoid them

"Easy Travel” is a ten-part series focusing on how to reduce bumps during vacations, anticipate roadblocks and be ready when things aren’t going your way. If you'd like to contribute to our future reporting and share your experience as a source, you can click here to fill out this quick form .

Budgeting for a vacation requires crunching numbers and seeing how much wiggle room your expenses have. But when it’s time to hit checkout on that flight or hotel reservation, you may be surprised when the final total is way higher than when you were booking. 

Hold up, what? 

Enter junk fees, also known as hidden fees.

Hidden fees can come in the form of paying extra to pick your seat on a flight or for on-site parking at a resort. They can even be so hidden that you think you’re getting a complimentary service–at least it’s marketed as so–when it’s not, or it’s an amenity you aren’t planning on using. 

Learn more: Best travel insurance

At the Thompson Central Park New York hotel, the “destination fee” of $34.86 plus tax covers access to the fitness center and internet plus an hour of free bike rentals, but only if you pay for an hour already. 

“These fees can sometimes catch travelers off guard and add unexpected expenses to their trip. While some fees may be legitimate charges for specific services, others can feel misleading or unfair if not properly communicated during the booking process,” said April Cheng, founder of Honolulu-based travel agency TravelChic World . 

About half of U.S. adults said they ended up spending more than they budgeted for when it came to their hotel, air travel and car rental bills, according to a 2018 Consumer Reports survey .

These additional costs are coming under fire lately. Last year, President Joe Biden announced that he was going to crack down on these junk fees for being unfair to consumers, especially the most marginalized Americans. 

Typically, going through a travel agent can help bring some clarity and transparency to any additional costs, Cheng said. Still, it’s essential to read all terms and conditions before offering up your credit card. 

In the meantime, here are some common hidden fees you may encounter when booking travel plans and what you can do about them, according to travel exports.

1. Resort fees

According to a January 2023 NerdWallet analysis of 100 U.S. hotels, the average resort fee was $42.41 – or about 11% of one night’s stay. If your vacation is a week long, this is an additional nearly $300 you’re on your hotel bill.

However,  about 7% of U.S. hotels charge a hidden resort fee, according to the American Hotel and Lodging Association (AHLA). 

“They can sometimes be buried in the fine print or only disclosed at check-in, leading to frustration among travelers,” Cheng said.  

According to NerdWallet, Wyndham and Hyatt properties have the highest average resort fees compared to their room rates. The hospitality brand with the lowest resort fees was Marriott (who implemented a policy to be upfront about mandatory fees in 2021 after being sued in 2019). 

➤ How to avoid resort fees: You can try to avoid these fees by doing your research when booking your hotel on the hotel website or a website called Resort Fee Checker – or at least to see what you’d be paying for and if you find these amenities worth it. Some hotel brands like Hilton Honors don’t charge resort fees if you book with points.

2. Airline class fees 

When booking your airfare, you’re likely using a third-party platform like Google Flights. But that low price is typically not what you’re going to end up paying, especially if you don’t want to be the last to board, earn no miles and sit wherever the airline allows you (at least according to Delta Air Lines’ Basic Economy). 

Typically, the fares you see are for the lowest economy class, which has little to no benefits – and is usually non-refundable – so you’re encouraged to pay extra money to go a class up if you want to select your seat or cancel for full credit. 

➤ How to avoid airline class fees: One way to reduce the surprise fees with airlines is to do your research with each airline’s policy when it comes to their basic economy policies. For example, Alaska Airlines’ lowest Saver fares still let passengers bring a carry-on for free and can cancel for a full refund within 24 hours of booking. However, JetBlue doesn’t allow its Blue Basic passengers to bring carry-on bags for domestic flights.

In the long term, consider using an airline credit card, which often comes with benefits like free checked bags. Enrolling in the airlines’ loyalty programs can help rack up miles to get benefits such as priority boarding and upgrades.

Story continues below.

3. Booking fees

“Booking platforms may add service fees or booking fees to the final price of your reservation,” Cheng said. “These fees are often not immediately visible during the search process and may only be revealed during the checkout.” 

According to a 2017 AHLA survey , 23% of travelers said they were misled when using a third-party booking site, including being charged extra fees. 

For example, Reservations.com charges people a non-refundable $35.85 service fee for using the platform. 

➤ How to avoid booking fees:   If you book directly through the hotel website, you’ll probably avoid the extra cost.     

4. Hotel parking

Just because you’re a guest at a hotel doesn’t mean you can park on-property for free, said Bruce Fisher from Hawaii Aloha Travel . This is especially true for crowded touristy locations and urban areas like Honolulu’s Waikiki. Since 2021 at the Park Shore Waikiki , guests have to pay $48 per day for overnight parking–not including tip for the valet. 

➤ How to avoid hotel parking fees: If you need to park a car at your hotel, be sure to find out if there are any parking fees. Cheng suggested looking into hotel reviews to see what previous guests had to say about other potential parking lots or what the parking situation is like. 

5. Early check-in or late check-out

It’s not uncommon for your travel plans to have you arriving at your destination before afternoon check-in times or departing way after check-out time. 

At the Hilton Hawaiian Village Waikiki Beach Resort , check-in is typically at 4 p.m., but if your room is ready before then, you could check in for a fee of $75. Standard check-out is at 11 a.m., but if you want to depart early, it costs $100 and checking out later in the afternoon is an extra $175.

➤ How to avoid early check-in or late check-out fees: Be sure to find out your hotel’s policy before you arrive because some properties charge a fee for early check-in or late check-out, Cheng said.

6. Family hotel rooms

Karen Morales, a travel advisor for Fora Travel who specializes in accessible travel, said to look out for extra charges if you’re hoping to use a rollaway bed or add an extra person to a room. 

“I recently did a reward stay in Barcelona, praising myself for maximizing my points redemption,” she said. “It wasn’t until checkout that I saw the fine print, the rollaway bed charge was $50 a day! Be careful with adding children to rooms. You should check to see if there is a charge for bedding, even on a free stay.”

➤ How to avoid family room fees: When booking a hotel with children, call ahead to check for these extra charges. 

7. Rental cars

Fisher said many consumers overlook rental car fees and taxes , but they can drastically change the total price. For a two-day medium SUV car rental from Hertz from Aug. 30 to Sept. 1, a renter would be charged almost $50 in additional fees, bringing the total from about $180 to almost $225. 

The hidden fees include about a $40 charge just because I’m picking up at the airport and $4.10 to cover “the cost Hertz pays for registration, licensing and other related fees for applicable car materials,” according to the Hertz website . 

➤ How to avoid rental car fees: “I tell customers that the rental car companies are not in the rental car business. They’re in the insurance business that’s why they try so hard to get people to sign up for services they don’t need,” Fisher said, advising people to always read the fine print. He also said to check with your credit card company since some cards will cover car rental insurance. 

What are some hidden fees you've encountered?

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected]

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What Is a Tourist Tax?

Tiffani Sherman is a Florida-based freelance writer and producer who works to support her travel habit. After many years producing television newscasts and training videos, she realized working for herself gave her more time to travel and explore the world. She has taken more than 30 cruises and has visited more than 80 countries.

Giselle M. Cancio is an editor for the travel rewards team at NerdWallet. She has traveled to over 30 states and 20 countries, redeeming points and miles for almost a decade. She has over eight years of experience in journalism and content development across many topics.

She has juggled many roles in her career: writer, editor, social media manager, producer, on-camera host, videographer and photographer. She has been published in several media outlets and was selected to report from the 2016 Summer Olympics in Rio de Janeiro.

She frequents national parks and is on her way to checking all 30 Major League Baseball parks off her list. When she's not on a plane or planning her next trip, she's crafting, reading, playing board games, watching sports or trying new recipes.

She is based in Miami.

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Some tourist towns have a love-hate relationship with the tourists themselves. The towns need the tourists and the money they pump into the local economy, but sometimes there are too many people and things get a bit too crowded.

Several destinations have ways to charge visitors a fee, sometimes called a tourism tax, to both generate income from visitors and help offset overtourism.

What is a tourist tax, and how does it work?

A tourist tax is a fee someone visiting a city pays. It can be a fee for simply entering the city or country, or — more often — it takes the form of a fee that hotels and other accommodations charge overnight guests.

For example, Orange County, Florida, where most of the Walt Disney World Resort and Universal Orlando Resort parks are, has a 6% Tourist Development Tax (TDT) on stays at any hotels and short-term rentals that are less than six months. In March 2024, that tax brought in more than $40 million, the highest monthly collection ever.

Florida law allows county governments to impose such taxes. Some localities call the lodging tax a city tax, often on a bill payable at checkout.

Another way to collect a tourism fee is upon entering a city or jurisdiction. Venice, Italy, for example, began charging a fee of $5.35 (5 euros) for each person entering the city for the day and not staying overnight. It is an experimental program for specific days between April 25 and July 14, 2024.

During the first 11 days of the tax, the city raised $1.05 million (977,430 euros), which is less than it cost to set up the system.

Other cities are looking at the day-tripper tax experiment in Venice to see if it might be an option for them.

Australia has a Passenger Movement Charge (PMC) of $40 (60 AUD) for people leaving Australia for another country. It’s part of every ticket a transportation company sells, and it goes to the government. New Zealand, meanwhile, charges inbound rather than outbound. It has the International Visitor Levy, a fee of $21 (35 NZD) that visitors must pay when entering the country.

Other countries have similar arrival or departure taxes.

One of the highest tourist taxes was in Bhutan, where visitors had to pay $200 per person per night in what it called the Sustainable Development Fee. That fee went down to $100 per person per night in 2023.

Tourist tax amounts can fluctuate. The city or country can adjust the tax seasonally or implement it during peak times like during festivals or outside of shoulder seasons . Taxes outlined in city, county or other types of ordinances can change annually or during government sessions.

» Learn more: The best travel credit cards right now

Why do places have tourist taxes?

When tourists visit a place, they visit areas where people live and work. An increase in visitors can strain infrastructure, damage the environment, increase traffic and even raise the cost of living.

The term overtourism describes this phenomenon, when the number of visitors negatively impacts the quality of life in an area, especially for locals.

Overtourism can cause rents and other prices to increase in some areas visitors frequent, sometimes causing a backlash with the locals.

Pre-pandemic, an anti-tourism movement was getting a lot of attention in cities such as Barcelona, Spain, a popular tourist destination with overnight guests and cruise ships, which bring thousands of visitors to the city each day.

The city recently increased the tax tourists pay for staying overnight.

Who has to pay tourist taxes?

In general, visitors to a city or area have to pay tourist taxes; however, there are often some exemptions, depending on the jurisdiction and the type of tax.

Children sometimes pay nothing or a reduced rate. The same goes for people with a disability.

For example, for the Venice day-tripper tax, people who live in Venice or were born in the city, minors under 14, people with a European Disability Card along with one person accompanying them, and members of the armed forces, police and other public safety entities are exempt from the fee.

Taxes for tourists are prevalent

Chances are, you already pay a tax for being a tourist. Many accommodations charge a bed or lodging tax as part of the nightly rate at a hotel or vacation rental.

Other fees are part of airline tickets. Tourists pay the fee when booking the ticket and then the company pays the appropriate government entity. They're sometimes called departure charges, arrival charges or something similar.

No matter how and how much tourists pay, the money is intended to go back into the communities.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are some of the best travel credit cards of 2024 :

Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card

No annual fee: Bank of America® Travel Rewards credit card

Flat-rate travel rewards: Capital One Venture Rewards Credit Card

Bonus travel rewards and high-end perks: Chase Sapphire Reserve®

Luxury perks: The Platinum Card® from American Express

Business travelers: Ink Business Preferred® Credit Card

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Income tax is a mandatory levy on individual and entity earnings. Individuals, Hindu Undivided Families (HUFs), businesses, cooperative societies, trusts, and other organizations must comply with income tax regulations. Taxable income is calculated based on slabs. The taxable income is derived by subtracting exemptions, deductions, and rebates from the gross income. An Income Tax Calculator simplifies these calculations.

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To calculate income tax, you need to include income from all sources, which include:

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Understanding Income Tax Exemptions in India

Calculating your income tax in India can be simplified by knowing the various exemptions available. Here’s a quick guide:

• Section 87A: If your taxable income is upto ₹5 lakhs, you can get a tax rebate of ₹12,500. This essentially means that you won’t have to pay any tax if your income is within this threshold. Under the New Tax regime, if the taxable income is upto ₹7 lakhs, you get a rebate of ₹25000.
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• Section 80G: Donations to charitable organizations are fully exempt from tax, making your philanthropy efforts rewarding for both you and society.
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• Section 80GG: Rent paid for your house is eligible for tax exemption, provided you are not receiving house rent allowance (HRA) from your employer.

By leveraging these sections, you can effectively reduce your taxable income and save more. Always consult with a financial advisor to ensure you’re taking full advantage of available exemptions.

Frequently Asked Questions

The Income Tax Calculator is an online tool that helps you estimate your taxes based on your income, updated with the latest changes from the Union Budget 2024-25.

For calculating the Income tax, you need to fill the below details

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Based on the inputs, the income tax calculator calculates the tax liability for different income slabs. The user can compare his tax liability under both old regime and new regime. This helps him in deciding which tax regime he should opt.

Taxes will be deducted based on the applicable tax slabs, which can be either the old regime or the new regime.

New Regime Tax Slabs:

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Filing Income Tax Return (ITR) is mandatory if an individual's taxable income exceeds the basic exemption limit.

Taxable income = Gross total income - Exemptions - Deductions

Gross total income includes earnings from various sources, such as salary, house property and capital gains. The basic exemption limit depends on the income tax regime chosen by the taxpayer when filing the ITR.

A maximum annual deduction of a total of ₹1.5 lakh from the taxpayer`s gross income is allowed. Both individuals and HUFs are eligible to take advantage of this deduction. LLPs, corporations, and partnership firms are not eligible for this deduction.

Subsections 80CCC, 80CCD (1), 80CCD (1b), and 80CCD (2) are all included in Section 80C. This subsection includes payments made towards life insurance premiums, ELSS, government-sponsored plans such as the national pension system, PPF, NSC and others.

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Topic no. 511, Business travel expenses

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Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes.

You're traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you can't deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you'll work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but aren't limited to, the costs of:

• Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)
• The airport or train station and your hotel,
• The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
• Shipping of baggage, and sample or display material between your regular and temporary work locations.
• Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
• Lodging and non-entertainment-related meals.
• Dry cleaning and laundry.
• Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
• Tips you pay for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer.)

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you're self-employed, you can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) , or if you're a farmer, on Schedule F (Form 1040), Profit or Loss From Farming .

If you're a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income. This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Claim these expenses on Form 2106, Employee Business Expenses and report them on Form 1040 , Form 1040-SR , or Form 1040-NR as an adjustment to income.

Good records are essential. Refer to Topic no. 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses .

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July 4th gas prices expected to hit lowest level in 3 years

By Megan Cerullo

Edited By Anne Marie Lee

Updated on: July 2, 2024 / 2:15 PM EDT / CBS News

Low gas prices are something for drivers to celebrate this July 4th, with costs at the pump expected to hit their lowest levels since 2021. 

The average price of gasoline on Independence Day is expected to be $3.49 per gallon nationwide, the lowest price it's been on the busy travel holiday in three years, according to GasBuddy , a fuel savings platform. 

That could mean serious cost savings compared with a few years ago for the 60.6 million motorists who are expected to travel by car to celebrate the federal holiday , according to AAA .

Last year, this national average price of gas was $3.50, just a penny higher than this year's projected price. In 2022, the average cost of gas was more than $1.30 higher than it's expected to be this year, driven up at the time by Russia's invasion of Ukraine in February which caused oil prices to spike. 

Where gas is cheapest

Gas prices have ticked upward slightly since the beginning of June, when they fell to as low as $3.39 per gallon.

Still, in some states fuel costs are significantly lower than the current national average. In Washington, average gas prices are down 71 cents a gallon compared with one year ago. 

"For those hitting the road to celebrate Independence Day, gas prices have seen modest recent fluctuations, but most states are seeing prices near or even well below where they were a year ago," Patrick De Haan, head of petroleum analysis at GasBuddy, said in a statement. 

But De Haan warned that hurricanes and other tropical weather events could disrupt refineries and cause prices at the pump to spike later in the summer. 

"While the first half of the summer has been relatively smooth sailing, the road ahead may be bumpy. Activity in the tropics has increased, and projections remain for a very busy hurricane season. Even after the holiday fireworks are over, we'll be watching for any potential fireworks at the pump that could be brought on by hurricanes disrupting refineries," he said. 

How to save on fuel costs

For motorists looking to save money on upcoming road trips, there are ways to minimize gas usage while driving. 

• Accelerating hard wastes fuel, while accelerating gently saves gas. Toyota offers this tip : "Aim to take about five seconds to accelerate your vehicle up to 15 miles per hour from a stop," the automaker said. 
• Sudden changes in speed can increase gas consumption by up to 30% on the highway, so aim to drive at a steady pace, Toyota added.
• Progressive, the insurance company, adds that newer cars tend to be more fuel efficient than older models. A quick tuneup to clear your vehicle's clogged air filters will also enable more efficient fuel consumption, and potentially help you save on gas costs.
• Check your tire pressure, as underinflated tires can lower your fuel efficiency. 

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

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Major boost as 11 cost of living changes set to come in over the summer – including a massive increase for parents

• Danielle Russell Masterson
• Published : 12:43, 5 Jul 2024
• Updated : 12:44, 5 Jul 2024
• Published : Invalid Date,

WITH the cost-of-living crisis spiralling, summer to September can be a challenging time for households.

The good news is there are some free allowances and price cuts in store for July.

Individuals and households can avail of schemes in travel, contraception and rent tax credits.

But some health insurance and life insurance policies have gone up in price.

It's important to be aware of all the changes coming up so you can prepare for the months ahead.

A new free travel scheme is now in place that will allow free travel for thousands.

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People who are medically unfit to drive for at least one year or may never be able to drive due to a medical condition can now apply for free travel.

Applications for those who meet the criteria opened on June 29.

To apply you must hold a Public Services Card and submit the new Free Travel Application form, signed and stamped by a GP confirming that you are medically unfit to drive for at least a year.

The scheme is open for those between 17 – 66 years old and there is no requirement to be on any other social welfare payment and it is not means tested.

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Contraception.

Ireland's free contraception scheme has been extended to women up to the age of 35.

The scheme offers free contraception to 17-25 year olds and has gradually increased its age range since then.

Women from the age of 17 up to 35 can receive free GP visits and check-ups relating to contraception.

Carer's Allowance

Minister for Social Welfare Heather Humphreys announced "significant" changes to the means test for the Carer's Allowance and an increase in the Carer's Benefit income allowance.

The income disregard for individuals or couples for those availing of the Carers Allowance has now risen.

This means thousands who do not currently qualify may be able to benefit from the payment.

It also means that those who do currently qualify may now receive a higher payment.

The income disregard for individual carers has risen to €450 per week, which is a €117.50 increase from the previous figure.

And income for couples has risen to €900 per week - an increase of €235 for a carer who is part of a couple since 2022.

Carer's Support Grant

The Carer’s Support Grant was paid to qualifying recipients by the Department of Social Protection in June.

The boost is intended to ease the financial burden on carers by helping to pay for specific care-related expenses or cover everyday costs.

The overall cost of the grant being paid was €275 million.

Back to School Clothing and Footwear Allowance

The Back to School Clothing and Footwear Allowance (BSCFA) is available to parents who have a qualifying child met a set of other financial criteria.

Your child qualifies if they are aged between four and 17 on September 30 in the year you apply.

Dependants aged between 18 and 22 who are returning to full-time second-level education in a recognised school or college in the autumn of the year you apply also qualify.

On top of this parents must be getting a qualifying social welfare payment, or are participating in an approved employment, education or training support scheme.

Rent Tax Credit

New Finance Minister Jack Chambers and Minister for Housing Darragh O'Brien have backed a fresh increase to the Rent Tax Credit.

Ministers have hinted that the payment could be hiked again – possibly from €500 to €1,000 for a single renter and €1,000 increased to €2,000 for couples.

O'Brien said: "That's something that we will absolutely discuss and Minister Chambers and I have already said that we would like to see a further expansion of the renters' tax credit.

"Really importantly for renters, lots of renters want to buy.

"That's why we've scaled up the First Home scheme. We've invested an additional €80million this year, €40million from us, €40million from the banks, because lots of renters are now buying their homes by using the First Home scheme."

Life insurance

The price of life insurance have risen with Irish Life from July 1 with a hike of 5.3 per cent on its gross adult premium.

Across its range of plans the increase will range from 1.6 per cent and 7.9 per cent.

The price increase is for new customers and existing customers who are renewing existing policies.

It’s the fourth price increase by the company over the past 18 months and follows recent increased pricing from both Laya and VHI by about seven per cent.

Health Insurance

VHI have increased the price of one of their policies this month.

The PMI 01 10 plan which is a private medical insurance contract which provides cover for treatment in hospital as a private patient.

This includes maternity and baby health checks including scans and epidurals, fertility treatments, mental health treatment, GP visits and hospital visits as well as urgent care.

The cost has increased to €2108.83 for adults, €505.49 for children and €708.67 for young adults aged 18-20.

Prices vary for young adults each year up until the age of 25 after which the full adult rate applies.

Electricity bills

SSE Airtricty have slashed some of their prices this month.

Customers who are on the variable tariffs will see a 10 per cent reduction in electricity and gas.

They will save €150 on their electricity annual plan and €100 on their gas annual plan, dual fuel plan customers will save €250 per year.

The cost cut apply to all customers on a variable tariff automatically, but there will be no change for those on fixed-rate tariffs.

It’s the third price cut in less than a year and there is good news as it is expected other energy providers will follow suit with price cuts throughout the summer.

Mortgage rates

AIB are reducing their four-year fixed mortgage rate for customers borrowing €250,000.

The rate has been reduced by 0.25 per cent since July 3.

The new rate will also be available to AIB customers who have a mortgage balance of at least €250,000.

Switcher customers who meet the criteria and want to avail of the fixed rate will also benefit from AIB’s €3,000 Switcher cash offer.

Bank of Ireland has announced two new fixed-term deposit accounts with higher rates and flexible features.

There will be no limit on the savings balance and interest will be paid on the full balance.

The bank are offering a new two-year fixed-term deposit account with a rate of 3 per cent.

A new one-year fixed-term deposit account has been launched with a rate of 2.5 per cent.

While PTSB introduced reductions in mortgage rates, on May 29, across their fixed-rate mortgages on terms between two to seven years.

• Budgets and statements
• Cost of living
• First-time buyers
• Money saving

What Labour has in store for your pension

T he pensioner vote has been a key battleground in this election. One of the Conservatives’ key pledges was the introduction of the “triple lock plus” , a higher tax-free personal allowance for the retired.

Labour made it clear that it would not match this promise. Now that it’s in power, what does it have in store for your retirement savings – and what can you do about it?

Labour’s lifetime allowance u-turn 

The lifetime allowance (LTA)  was a tax charge on larger pensions. Once your pot exceeded £1,073,100, you paid 55pc on any amount above this level if you took cash as a lump sum. For funds accessed in other ways, it was 25pc on top of income tax. 

The threshold has fluctuated between £1m and £1.8m since the LTA’s inception in 2006. 

In the 2023 Budget, Chancellor Jeremy Hunt announced the end of the LTA from April 2024. Labour immediately pledged to reintroduce it but shelved that plan when it became clear senior doctors and other public sector workers would be likely to leave the workforce as a result.

Three new pension allowances replaced the LTA when it was abolished. If Labour retains them, the maximum tax-free lump sum will be frozen at 25pc of your pension, or a maximum cash value of £268,275.

Now that there is no overall cap on how much you can save into a pension, only income tax is due beyond that. The same applies to pots you leave behind when you die and certain overseas transfers.

If Labour were to change their minds again and bring the charge back, it could affect up to 6pc of savers approaching retirement, or around 250,000 people, according to consultancy LCP. 

Experts agree that any changes would take time to implement and would be unlikely to apply retrospectively to any actions taken now. However, the LTA is not mentioned in Labour’s manifesto and the party could still reintroduce it.

HMRC has already confirmed the LTA’s removal is not complete,  with the legislation including a so-called “Henry VIII clause” that means it can be changed at a later date.

Until it is, some richer pension savers have been advised not to access their retirement benefits.

Could Labour take aim at pensions tax relief?

Pension savers currently receive tax relief on contributions at their marginal or highest rate of income tax. This gives everyone 20pc in relief, but higher rate taxpayers get 40pc and additional rate payers are entitled to 45pc. 

In 2016, then-backbencher Rachel Reeves penned a column for The Times arguing for a 33pc flat rate of tax relief. According to the latest HMRC figures, around 6.5 million people could lose out under such a system.

Labour has been forced to deny this is policy and it is no longer understood to be Ms Reeves’ view. However, the party has not definitively ruled it out and if it were introduced, it could hit some high earners with six-figure losses over a 30-year career.

According to Hargreaves Lansdown, a worker earning £100,000 and contributing 10pc of their salary into a pension would lose £700 a year. For someone earning £200,000, this rises to £2,400, while someone on £300,000 would lose £3,600.

Could the ‘pension freedoms’ be reversed?

In 2015, then-chancellor George Osborne introduced the “pension freedom” reforms. The changes dramatically increased people’s options for accessing their pension flexibly, such as offering the opportunity to withdraw an entire pot in one go or enter a drawdown facility. 

Some experts believe this is an area where Labour could seek changes.

Tom McPhail, of financial consultancy the Lang Cat, said the party could increase the minimum age for accessing your pension from 55 to 60. He also speculated that Labour could restrict your right to taking cash out before first securing a minimum amount of guaranteed long-term income.

Will Labour end the tax-free lump sum?

Sir Keir provoked panic among pensioners during the election after he appeared to suggest that Labour would remove the 25pc tax-free lump sum. This is the amount that people can usually draw from their pension without paying tax once they hit 55.

A spokesman was forced to clarify the remarks, calling them an “old-fashioned mistake.” He went on to say the lump sum was “a permanent feature of the tax system and Labour are not planning to change this”.

However, some experts have long said that Labour could alter the 25pc tax-free lump sum – which Liz Kendall, shadow work and pensions secretary, recently failed to deny. 

There is no commitment to it in Labour’s manifesto. Any decrease in the amount people can take could see them hit with charges of up to 45pc, depending on their tax bracket.

Is a pension ‘death duty’ on the cards?

Inheritance tax (IHT) is currently not charged on pensions and Labour has denied that a pension death tax is “party policy”. 

But experts have warned that the party could be tempted to extend the scope of IHT to cover pension pots if it entered office. Mr McPhail said a death tax raid on pensions was a “real risk” under Labour. 

Currently, if someone dies before the age of 75, any of their unused pension is inherited tax free. For anyone who dies after this age, income tax applies at the point the beneficiary withdraws the money.

Analysis shows that families inheriting a £100,000 pension – roughly the size of the average pension pot for a 55 to 64 year old – could be stung with a £65,000 tax bill if IHT was applied.

In recent years, pensions have become a far better vehicle for dodging death duties. Many savers have filled their pensions partly as a way to limit IHT which would otherwise be due if the money was left in a bank account or Isa.

What are Labour’s plans for pension fund investments?

The party’s manifesto stated that it would “act to increase investment from pension funds in UK markets”. 

It is not yet clear whether pension funds will be forced or just encouraged to switch investments to domestic assets – or the percentage of assets that might be switched.

Labour may simply decide to introduce disclosure requirements around investment in British equities rather than making investments mandatory. 

However, if restrictions were placed on investments, the growth potential of pension pots could fall given the poor performance of London-listed companies in recent years compared to American companies, for instance.

Neil Rayner, of investment platform True Potential, said that while Britain was in need of more investment from private business, plans to redirect funds’ assets based on geography “increased the risk and volatility for these portfolios, which could harm long-term results and make financial planning far more difficult for millions of people.”

Could auto-enrolment be expanded?

Labour has promised to carry out a wide-ranging “review of the pensions landscape”, which might lead to changes to minimum pension contribution rates. 

Before “auto-enrolment” was introduced in 2012, many people were not saving enough for retirement and risked running out of money after they stopped working.

Now, the minimum contribution to a workplace pension is 8pc of your salary. This is made up of a 5pc contribution from the employee and a 3pc contribution from the employer.

However, industry insiders believe the rates still aren’t high enough to ensure a good standard of living in retirement and have lobbied for minimum contributions to rise. There are also calls for the self-employed to be brought into scope of the rules. 

But continued cost of living pressures could make reforming auto-enrolment tricky for Labour, even if the political will is there.

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