Is airline lounge membership tax deductible?
If you’re flying for business, those hundreds of dollars in annual fees are a legitimate tax write-off.
By David Flynn, October 2 2024
Airport lounges are a haven for any traveller, but doubly so when you’re on a business trip.
It’s not just about getting away from crowded noisy terminals: it’s about a place to settle in and work, with ready access to AC/USB power, or perhaps even to meet colleagues and clients.
In some welcome news for business travellers, particularly as the end of financial year looms: paid membership to airport lounge programs such as the Qantas Club and Virgin Australia Lounge can be claimed as a tax deduction.
This applies to Qantas Club and Virgin Australia Lounge memberships purchased by a business for use by employees, as well as membership purchased by individuals.
Executive Traveller spoke with the Australian Tax Office to get the authoritative word on claiming Qantas Club and Virgin Australia Lounge membership as a tax deduction.
“As a sole trader, deducting an airport lounge membership is no different from deducting any other business-related expense,” an ATO spokesperson confirmed.
“You can claim a tax deduction for most expenses from carrying on your business, as long as they are directly related to earning your assessable income.”
Of course, to count as a business deduction an expense must be for your business, not for private use.
Business trips make airport lounge membership a legitimate tax deduction.
That nudges airport lounge membership into a slightly grey area, given that it’s also likely to be used on personal trips such as holidays.
“It the expense is for a mix of business and private use, you can only claim the portion that is used for your business,” the ATO affirms.
“If an airport lounge membership is only used for business-related travel, a deduction for the full purchase price can be claimed.”
“However, for example, if the airport lounge membership is used for business-related travel 50% of the time, and the other 50% of the time it is used for private travel, only the business portion (or 50% of the amount) can be claimed as a deduction.”
The ATO suggests business travellers who pay for lounge membership keep “a comprehensive business travel diary (to) help apportion the deductions between the business and private use of your airport lounge membership.”
For more information on claiming business travel expenses, and the need for sole traders to keep travel diaries for deductions for travel expenses, visit the ATO website.
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.
09 May 2020
Total posts 576
TBH I am surprised that while costs of visa (for international travel) and travel insurance are not tax deductible, lounge membership is. The question is then what about payment for single entry lounge access (assuming you can get a proper ATO compliant tax invoice/receipt in the first place)?
How about “status” and lounge access from a certain Star Alliance credit card only available in Australia? If ET or the bank who issues this card gets the ok from ATO, it will definitely be a scoop!
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 775
Who told you that the cost of travel insurance and visas for a work/business related trip are not tax deductible? HINT: Check again.
09 May 2020
Total posts 576
This is for readers who may be looking for guidance.
Some ATO community forums (one “AnitaATO”) suggest people can deduct visa applications fee for business trip where visa is required for entry.
However several charted accountant websites and ATO websites itself (see Example 1: Rebecca a sole trader landscape gardener invited to exhibit at the Chelsea flower show in England) states you cannot deduct for visa and travel insurance, in part or totally.
Feel free to check with your tax accountants
Qantas - Qantas Frequent Flyer
07 Sep 2017
Total posts 4
The ATO advice is a little baffling. Say you buy a three-year Qantas Club membership. The cost would normally be claimed in the year that the expense is paid. How do you know how much to claim when you don't know what proportion of your future travel over the next three years (involving Qantas lounges) is personal or business?
Keeping a diary (to record when you're in a lounge!) is little use when the expense has already been paid and claimed as a tax deduction. I think I know what most people will do.
Virgin Australia - Velocity Rewards
24 Jan 2018
Total posts 775
If you pre-pay an eligible tax deduction that extends for a period beyond 12 months, you need to apportion and claim over the lesser of that period - or 5 years. Technically, it should be done based upon the number of days membership in each of the years of income, but if you just claim 1/3rd in each you'll pass scrutiny.
As for your conundrum re: visiting the lounge on holiday trips, the simple solution is don't (although, I don't ever recall the front desk staff asking whether I'm travelling for business or leisure). After all, if your family is like mine, getting them past check-in, bag drop and security in under 30 minutes, let alone heading towards the lounge is a bit like using cats to herd chickens, so I don't bother using the lounge on holiday trips (unless provided with the class of travel).
Outcome: No apportionment required - 100% business use. Ditto with Valet Car Parking pre-purchased online, used it only on business trips. That's my story, and I'm sticking with it. You're most welcome, have a nice day.
Anonymous.
M. Taxation Law.
29 Jan 2012
Total posts 184
They may be deductible, but are they really value for money and worth it in today's climate - I feel not. There are far better options out there with airports expanding and providing more options for passengers in this modern age - do you remember the drab airports of the 1980's, this is when lounges were needed, but not today and not at the cost being charged.
Hi Guest, join in the discussion on Is airline lounge membership tax deductible?