Is Qantas Club, Virgin Australia Lounge membership tax deductible?

By Chris C., April 20 2016
Is Qantas Club, Virgin Australia Lounge membership tax deductible?

Airport lounges are a haven for business travellers, providing free Internet access and places to work, meet and recharge your devices – but did you know that Qantas Club and Virgin Lounge memberships can actually be a tax deduction?

According to the Australian Taxation Office, lounge memberships purchased by businesses on behalf of their travelling employees are ripe for a write-off, even if occasionally used by staff on their private holidays.

That’s because “the primary function of Airport Lounge Clubs is to provide business facilities and prompt and efficient services relating to the travel of their members,” says the ATO.

“Hospitality, such as food, drink and recreation, is merely incidental to the primary function of these clubs. The Airport Lounge Club is also not considered to be a recreational club, and the fees are not excluded from deductibility on this basis,” the ATO continues.

Grabbing a pre-flight coffee? That's okay, your membership is still deductible...
Grabbing a pre-flight coffee? That's okay, your membership is still deductible...

Sole traders buying their own Qantas Club or Virgin Lounge memberships for use on business trips are also believed to enjoy similar deduction privileges.

On the other side of the coin, employees of businesses with ‘no-frills’ travel policies may instead need to cover their own fees if airport lounge access is desired.

Like many income tax deductions that have both personal and business applications, you’d generally deduct only the portion of the expense that relates to your income-earning activities, rather than the total cost as you could with a business.

For instance, if 80% of your lounge visits were on work trips and the remaining 20% on leisure trips, your deduction could be as high as 80% of the total membership fee.

Whatever the case, be sure to consult your accountant or tax professional for advice on how the ATO’s rules and regulations apply to your particular circumstances.

This article is not published or intended as personal financial advice.

Also read: Qantas vs Virgin: battle of the business lounge breakfast

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Chris C.

A former contributor to Executive Traveller, Chris lives by the motto that a journey of a thousand miles begins not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 316

Further to this if you can band together to create a corporate group within your work colleagues you can reduce the cost even further. I was part of a group and my QC for 4 years was just on $1000, even working on a 40% tax margin that reduces your expense to just $600 out of pocket, at a nett $150 a year it is very good value.

Qantas - Qantas Frequent Flyer

20 Apr 2016

Total posts 2

Thanks for the write up Chris.

Not sure if you can help but, if I was living in Melbourne but originally from Sydney and made a number of weekend commutes back home but required the lounge prior to my flights on a Monday morning would a % of this be claimable?

24 Apr 2012

Total posts 2561

Hi Luke, best to discuss your personal circumstances with an accountant or tax professional.

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 316

LukePS whilst Chris is technically correct the percentage of expense for business purposes is hard to quantify as is the FBT if the membership is paid by the employer. The problem you have is assigning a percentage of a spend against income on something you pay for in advance. Your lounge membership is paid for upfront to be used during the following years and is not charged on a per visit basis. I have always claimed 100% of my QC membership as I paid for it with the expectation of using the QC on my business trips but as Chris says best run it by your bean counter.

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 367

My salary sacrifice package allows lounge membership without FBT so I'm already getting it tax free. 

Virgin Australia - Velocity Rewards

19 Mar 2014

Total posts 570

Begs the question, if you receive corporate gold from your employer, is this subject to FBT? Or does the fact there's no tangible cost attached makes it exempt?

Qantas - Qantas Frequent Flyer

26 Sep 2011

Total posts 83

What about parents who inflict their poorly behaved children on other passengers in what the ATO describes as a "business" facility. Either it is or it isn't and those who treat it as if it isn't are threatening the tax deductibility if those of us for who it should be a "business" lounge

Qantas - Qantas Frequent Flyer

18 Aug 2014

Total posts 76

Everything can be a tax deduction if you have a good bean counter.......

01 Feb 2018

Total posts 3

Lounge membership is FBT exempt, so a business does not need to apportion between an employee’s businesss or personal use (could in theory be all personal).

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