Free download · no email required
Editable Word document (.docx). Opens in Word, Google Docs, or Pages.
Download the Australian expense policy (Word)In Australia an expense policy carries one consideration the others do not put front and centre: Fringe Benefits Tax. The way entertainment and certain perks are treated decides whether the business faces an FBT bill, so the policy has to flag those categories rather than bury them. Beyond that, it does the usual job of setting limits, requiring evidence, and tying mileage and meals to the ATO’s published rates. This template gives you that structure ready to adapt.
The download is a sectioned policy: purpose, scope, the general principle, a row per category with the rule and limit, then approval, submission, and non-reimbursable items.
The general principle
The base rule is that a cost must be incurred in earning assessable income, and that a valid tax invoice supports any GST claim on a purchase over $82.50 including GST. Stating this sets the standard for every category below and gives an approver grounds to reject a private cost.
Entertainment and FBT
The row that matters most is entertainment. Meal entertainment provided to staff is generally not income-tax deductible unless the business pays FBT on it, and the rules around client versus employee entertainment are intricate. The policy’s job is not to resolve every FBT question but to make sure entertainment is captured as its own category and flagged, so the business can assess FBT properly rather than discovering it at year end. Treating a staff celebration as an ordinary deductible meal is exactly the error that creates an unexpected FBT liability.
Subsistence and the ATO reasonable amounts
For travel meals, the policy benchmarks to the ATO’s reasonable amounts, which are published each year by salary band. Paying within those amounts for a genuine travel allowance simplifies substantiation. The template links to a cheat sheet carrying the current figures so the limits stay current.
Mileage: cents per kilometre or logbook
For staff using their own car, the policy ties mileage to the ATO cents per kilometre rate, 88 cents per kilometre for 2025-26, capped at 5,000 business kilometres per car. For anyone driving more than that, it directs them to the logbook method instead, which has no cap but needs a 12-week logbook. Phone and internet on personal plans are reimbursed at the business proportion, with the percentage substantiated.
How to use the template
- Set your accommodation caps and approval thresholds.
- Confirm the entertainment row and your FBT process for flagged items.
- Confirm the mileage rate and the 5,000 km logbook trigger.
- Circulate and have staff acknowledge the policy.
Common mistakes
- Treating staff entertainment as an ordinary deductible meal, missing the FBT.
- Letting cents-per-km claims exceed 5,000 km instead of switching to a logbook.
- Reimbursing whole personal phone bills rather than the business proportion.
- Having no submission deadline, so claims land in the wrong period.
When the policy enforces itself
A written policy works best when the rules apply at capture. Tools that help:
- Driversnote keeps mileage within the cents-per-km method automatically.
- ExpenseFlow reads each receipt, codes it to the right category (keeping entertainment separate so FBT can be assessed), applies the GST treatment, and posts it into Xero or QuickBooks Online, so the policy is enforced in the coding.
- Weel sets card limits matched to the policy before the spend happens.
A short policy that staff actually read beats a long one nobody opens. Keep each row to a plain rule and a number, publish it where people will find it, and review it once a year against the current ATO rates so the figures never quietly go stale.
Start from the template, set your limits, and let captured-at-source coding keep claims inside the policy.