Moving expenses, such as truck rental and storage of household goods after moving, if necessary. Temporary living costs of up to three months in an interim residence at company expense when required. Costs related to selling a home, transferring motor vehicle registration, and getting a driver’s license when not incurred in conjunction with the move. Travel expenses for all family members or others who moved with the employee when required due to employment relocation (e.g., removalist fees). Travel expenses incurred by the employee in getting themselves and any others who moved with them to their new home (e.g., transportation costs, meals, and accommodation). Miscellaneous relocation expenses such as telephone installation and connection fees, cable installation and connection fees, disconnection fees for any utilities the family was receiving at their old home.

Moving expenses incurred to move property from a previous place of residence (e.g., removalist fees). If an employee claimed such expense as work-related and received reimbursement from their employer, the amount reimbursed is income. Otherwise, there is no provision to include remuneration paid by an employer in respect of these costs as taxable income of the employee.

An allowance or reimbursement received under a salary packaging arrangement by an employee who incurs work-related moving expenses does not form part of assessable income unless it exceeds the reasonable amounts required for the purpose of relocating. This would generally be limited to the cost of the removalist.

The Full Bench held that because moving from one residence to another is not ordinarily considered a necessary element of gaining or producing an assessable income it does not have the character of expenditure incurred in gaining or producing such income. Nor did it have any essential connection with the gaining or producing of assessable income.

The Full Bench further held that there was no reason why a relocation allowance could not be paid to an employee relocating from a different place of employment, thus allowing it to be characterized as a reimbursement for expenses incurred in gaining or producing assessable income.

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An employee who incurs work-related moving expenses may claim deductions for those costs which are an allowable deduction (i.e., primary purpose is to earn income).

Employers may reimburse their employees for the cost of getting themselves and their belongings to another country if it will help them carry out their duties for the employer or meet some other work-related requirement. However, if an employee’s relocation forms part of the initial contract of employment, any payment made by an employer to cover relocation costs would be taxable as earnings.

To claim these expenses as a tax deduction, you must have received the reimbursement under an ‘accountable plan’. This means that your employer must give you a written statement which includes:

  • the amount reimbursed;

  • the time period during which the moving expense reimbursement applies; and

  • the name of your employer.

You must have spent the reimbursed amount on expenses that are deductible in computing your income from a business, job, or property.

The most common taxable benefit is where an employee receives a lump-sum reimbursement of unreimbursed allowable moving expenses without having to account for the use of the money. In this case, you have received a tax-free payment and you cannot ask us to tax it.