ATO: Covid testing is tax deductible for business travellers

Covid tests are the new norm for travel, but their cost can now be written off against your annual income tax.

By David Flynn, November 24 2021
ATO: Covid testing is tax deductible for business travellers

Covid-19 tests – especially 'gold standard' PCR testing – are significantly adding to the cost of post-pandemic travel, to the tune of $300-$450 per passenger in some instances.

But if you're setting out on a business trip those costs are a legitimate tax deduction, according to the Australian Taxation Office.

After Executive Traveller approached the ATO seeking formal advice on tax deductibility of Covid travel tests, an ATO spokesperson confirmed this is indeed the case.

"The cost of a PCR test can be claimed as a deduction by a taxpayer when they are travelling overseas on work and that test is required for that trip," the spokesperson said.

"The cost of the PCR test is considered to be an incidental expense as the travel is undertaken in the course of a taxpayer's employment."

More on this from the ATO:

"Travel expenses include incidental expenses which are minor but necessary expenses associated with a taxpayer's work-related travel. A taxpayer can claim travel expenses if they incur them when travelling away from their home overnight in the course of performing their employment duties."

"A PCR test may be required by the destination jurisdiction in order for them to enter the overseas country or when returning to Australia from the overseas country."

Mixing business and pleasure?

If you're among the many who combine business and leisure trips – which will become even more popular as a way to maximise the necessary outlay of those Covid tests – then you're still covered, according to the ATO.

"If a taxpayer's travel is for work and private purposes they will need to apportion their expenses" in the same way as they might also do with hotel stays, for example.

PCR testing prior to departing Australia averages $150, although some clinics – notably the Histopath pop-up clinics at Sydney, Melbourne and Brisbane international airport terminals – charge as little as $79 with results in 90 minutes (as long as you don't mind spending 90 minutes sitting around the airport).

Some countries – among them Singapore and Thailand – also require a Covid PCR test on arrival, while all travellers headed to Australia, including citizens coming back from an overseas trip, must take a PCR test within 72 hours of the departure of their return flight.

The cost of that pre-return PCR tests varies not only from country to country, but in some cases depends on how quickly you need the results.

For example, test centres at San Francisco airport can charge USD$90 for a 24-hour turnaround to $250 for a result in 90 minutes.

In London you could be looking at £65-85, and upwards of SGD$120 in Singapore.

Read more: Covid tests are a hidden cost of post-pandemic travel

$59 for a RAT test at BNE, SYD & MEL airports is bearable (all that is currently required for USA). $79 for PCR test. It's getting back from USA that is unknown.

05 Mar 2015

Total posts 360

Well it's not exactly an 'unknown', as the article cites some examples of how PCR testing prices in the USA vary. Airport testing seems to be a big thing there but I would rather get my test done in the last few days of my trip so I can go for a cheaper 24-48 hour turn-around and then when I get to the airport I can head straight to the lounge.

prices for PCR tests dropped here rapidly from $150 to $79. Am sure the same might happen in USA. It's in the airlines interest. Not suggesting getting test done very last minute.

Think many people if in USA somewhere & are flying back to Australia via LAS, LAX or SFO might fly in there the night before, if they haven't been tested in city where they were.

& you have to wonder if any testing will be required at all in few days/weeks/months. I think govts everywhere are now trying to justify their waste of trillions of dollars.

05 Mar 2015

Total posts 360

Very good to hear, thanks ET for looking in to this, it makes sense that Covid tests for a business trip should be tax deductible but great to have the ATO give it 100% confirmation. This would also apply to any Covid tests necessary for domestic trips as well, as that seems to be where Queensland is heading for now.

QF

11 Jul 2014

Total posts 709

What if I land in Zurich, than go to another EU country say Malta, Croatia, Greece, Italy a couple of days later do I need to get another test every time I go to another country?

You need to do some solid Google research here and check the entry requirements of whatever countries you are visiting.

Qantas

19 Apr 2012

Total posts 1409

Not sure the second part of the headline is correct. They can only be partially written off. Tops 40% but for many of us a bit less more like a third is so can be ‘written off ‘.

Qantas - Qantas Frequent Flyer

29 May 2013

Total posts 62

The headline seems correct, its the additional line that is a little misleading. You don't offset it against your tax bill, you offset 100% against your taxable income which lowers your tax bill by your marginal tax rate. Simply put, if your marginal tax rate is 37% and the test costs you $100 you would get $37 off your tax bill.


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