Member Q&A: Dual purpose travel – how to treat the airfares?

FBT, Public
Author: Rob Power
23 Feb 2024


An employee is going to an overseas work conference for 5 days and has planned for a 5 day holiday to another destination (2 hours flight from the  location of the conference). All costs associated with private travel will be borne by the employee, however, the conference accommodation and airfare will be paid by us.

Given the travel is 50% business and 50% private, is 50% of the airfare costs subject to FBT?


For self-education expenses, the ATO generally requires you to apportion as follows:

  1. where the self-education expense has distinct and severable parts, where some are for an income-producing purpose and others are for some other purpose, you apportion the expense according to its particular purpose;
  2. where the self-education expense is a single outlay that serves both an income-earning purpose and some other purpose, you apportion on a fair and reasonable basis. What is fair and reasonable depends on your particular facts and circumstances.

In your case, there appears to be a clear dual purpose for the trip and so based on the current ATO view in Taxation Ruling TR 2024/3 (Income Tax – deductibility of self-education expenses incurred by an individual),  50% of the airfare will be subject to FBT.

The example below is taken from TR 2024/3:

Example 18 – course and holiday

85. Francesco, a paediatrician, has 2 equal purposes when he decides to attend a 5-day international conference on paediatrics in Singapore to be followed by a 7-day holiday in Thailand. The conference package is $3,500 ($1,500 return airfare, $500 for the cost of the conference and $1,500 for accommodation and meals at the conference venue). Francesco paid another $3,000 for accommodation, meals and car hire for the 7-day holiday in Thailand.

86. Francesco is allowed a deduction of $2,000 for the conference cost and the accommodation and meals expenses at the conference. Only half of the return airfare ($750) is allowed, as the expense was incurred for 2 equal purposes, one income-earning and the other private. The other expenditure of $3,000 relating to the holiday in Thailand is private in nature and not deductible.

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This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.


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