Is Per Diem Allowance for Short Term (3 months) Overseas Assignment taxable and subject to Super?
This allowance is paid in 1 lump sum before the employee start the assignment and it is intended to support reasonable living expenses in the host country.
Hiya @izmk 👋
You may call it "per diem" allowance but you need to classify the payment for ATO tax, super and reporting purposes.
Whilst allowances are payments subject to withholding, the Legislative Instrument (item 5 for travel allowance) defines exceptions for some expense allowances that meet the conditions. The annual ATO tax determination (TD 2024/3)for travel allowance (only includes overseas travel and meal allowances, accommodation has no tax concessions) defines the "reasonable allowances amount" referenced in the legislative instrument. Read the entire document, don't just jump to the rates!
If the rate you pay for the travel and meals is in excess of the ATO reasonable rates defined in TD 2024/3, then only the amounts in excess of the reasonable rate are taxed.
ATO SGR 2009/2 paragraph 72 states that "expense allowances" that have a "reasonable expectation" of being fully spent are not OTE. If you are paying an amount that does not exceed the ATO reasonable rate, then it is deemed to be fully spent. If you pay in excess of the ATO reasonable rate, if you pay the amount in an Award, then it is deemed to be fully spent. If you pay a higher rate defined in an Agreement or Policy, then if an independent assessment has been performed to determine that the allowance approximates the expense, it is not OTE. If no assessment, the full amount of the allowance is OTE. If an assessment has been performed and found that the allowance exceeds the assumed expense, the whole amount is OTE. Isn't super just so easy?
The ATO STP2 Employer Guidance explains how to report overseas travel allowance (travel/meal) or other allowance (G1 general for overseas accommodation).
Deanne
Hiya @izmk 👋
You may call it "per diem" allowance but you need to classify the payment for ATO tax, super and reporting purposes.
Whilst allowances are payments subject to withholding, the Legislative Instrument (item 5 for travel allowance) defines exceptions for some expense allowances that meet the conditions. The annual ATO tax determination (TD 2024/3)for travel allowance (only includes overseas travel and meal allowances, accommodation has no tax concessions) defines the "reasonable allowances amount" referenced in the legislative instrument. Read the entire document, don't just jump to the rates!
If the rate you pay for the travel and meals is in excess of the ATO reasonable rates defined in TD 2024/3, then only the amounts in excess of the reasonable rate are taxed.
ATO SGR 2009/2 paragraph 72 states that "expense allowances" that have a "reasonable expectation" of being fully spent are not OTE. If you are paying an amount that does not exceed the ATO reasonable rate, then it is deemed to be fully spent. If you pay in excess of the ATO reasonable rate, if you pay the amount in an Award, then it is deemed to be fully spent. If you pay a higher rate defined in an Agreement or Policy, then if an independent assessment has been performed to determine that the allowance approximates the expense, it is not OTE. If no assessment, the full amount of the allowance is OTE. If an assessment has been performed and found that the allowance exceeds the assumed expense, the whole amount is OTE. Isn't super just so easy?
The ATO STP2 Employer Guidance explains how to report overseas travel allowance (travel/meal) or other allowance (G1 general for overseas accommodation).
Deanne
22 Apr 2024 · 6 min read time
15 Apr 2026 · 5 min read time
15 Apr 2026 · 4 min read time
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