Travel and fares allowance in construction

Under the Building and Construction General On-site Award, eligible employees may receive a daily fares and travel allowance when starting or finishing on-site. Extra rules can apply to site-to-site travel, distant work and employer-directed travel.

Start by checking award coverage

The first job is confirming which award covers the employee. Do not assume everyone working around a construction site falls under the same one.

Many on-site building and civil construction employees are covered by the Building and Construction General On-site Award 2020. Electricians, plumbers, fire sprinkler fitters, joiners and other specialist workers may be covered by a different award with different travel rules.

An enterprise agreement or an employment contract may also provide a higher entitlement. It generally cannot undercut the applicable minimum award entitlement.

Our Awards hub explains the broader award coverage and payroll issues. You can also use the award rate checker when confirming classifications, base rates and current allowance amounts.

What the daily fares and travel allowance covers

The fares and travel pattern allowance recognises the travel costs and changing work locations common in construction. Under the Building and Construction General On-site Award, it can apply when an employee is required to start or finish work on a construction site.

It is usually a fixed daily amount. It is not necessarily a reimbursement of the employee's exact train fare, fuel bill or tolls. Receipts may not be needed for the fixed award allowance, although your payroll records still need to show why it was paid.

The entitlement depends on the award wording and the day's actual work arrangement. Ask:

• Did the employee start or finish on a construction site?
• Was free transport provided under the conditions set out in the award?
• Did the employee have an employer-provided vehicle?
• Did they travel between workplaces during paid time?
• Was the job far enough away that they could not reasonably return home each night?
• Does an enterprise agreement provide a different or higher benefit?

Do not treat the daily allowance as payment for every minute spent commuting. Ordinary home-to-work travel is usually handled differently from employer-directed travel during the working day.

Key figures to keep in the payroll check

As at August 2026, full-time ordinary hours under the Building and Construction General On-site Award average 38 hours per week.

As at August 2026, the standard casual loading under the award is 25%. That loading applies to the relevant wage rate. It does not automatically increase a fixed expense-related travel allowance.

As at August 2026, payroll and time records generally need to be retained for 7 years under the Fair Work record-keeping rules.

As at August 2026, rates arising from the 2026 annual wage review generally apply from the first full pay period starting on or after 1 July 2026. Expense-related allowances can also be adjusted, so check the current award pay guide before processing the allowance.

It is safer not to copy last year's daily or per-kilometre amount into a permanent payroll rule. Fair Work Commission determinations can change these figures. Keep the amount linked to an effective date and preserve the old rate for retrospective calculations.

Common travel situations compared

Work situation	Likely award treatment	What payroll should capture
Employee starts or finishes on a construction site	Daily fares and travel allowance may apply	Site, date, applicable award and current daily amount
Employer provides qualifying free transport	The daily allowance may not apply, depending on the award conditions	Transport offered, pickup arrangement and employee eligibility
Employee travels between sites after starting work	Travel time may be paid as working time, with fares or vehicle costs also payable	Departure time, arrival time, sites and transport used
Employee uses their own vehicle at the employer's direction	A current per-kilometre allowance or expense payment may apply	Approval, business kilometres and purpose of travel
Employee cannot reasonably return to their usual residence each night	Distant work provisions may apply	Job location, normal residence, accommodation, meals and trips home
Employee simply commutes from home to the usual workplace	Usually not paid working time, subject to the award and employment arrangement	Normal workplace and any unusual employer direction

These categories should not be merged into one payroll code. A daily site allowance, kilometre allowance, travel-time payment and reimbursement can have different award, tax, super and reporting treatment.

Travel between sites is different from commuting

Suppose a worker reports to Site A at 6:30am. At 10:00am, the supervisor directs them to collect materials and continue at Site B. That movement is not an ordinary trip from home to work. It happens after the employee has started work and follows an employer direction.

The reasonable travel time will commonly count as working time. The employer may also have to meet the cost of the travel. If the worker uses an authorised private vehicle, record the business kilometres separately from their hours.

Now take a worker who drives directly from home to their allocated site and goes home after the shift. The daily fares and travel allowance may apply, but the normal commute does not automatically become paid time.

That distinction matters when overtime is calculated. Paid travel time can push worked hours beyond the ordinary span or daily arrangement. The fixed fares allowance itself is not usually multiplied by an overtime penalty unless the award or applicable agreement says it is.

Distant work needs its own assessment

Distant work is more than a long commute. It generally concerns work far enough from the employee's usual residence that they cannot reasonably return home each night.

The award contains separate rules dealing with matters such as transport to the distant job, suitable board and lodging, meals during travel and return trips. The exact entitlement depends on what the employer provides and the employee's circumstances.

Keep evidence of the employee's usual residence, the project location and the accommodation arrangement. Avoid deciding eligibility from a straight-line distance alone unless the award sets that test. Road access, travel time, shift times and available transport may all matter.

If accommodation is provided, record what was supplied and for which nights. If an allowance is paid instead, use a separate payroll code from the ordinary daily fares allowance.

Tax and super are separate questions

An award can require a payment without making it automatically tax-free. The Australian Taxation Office rules decide whether PAYG withholding, Single Touch Payroll reporting and super guarantee apply.

A genuine reimbursement of a documented business expense is different from a fixed allowance. A fixed travel allowance may still need to be reported even where the employee could claim a deduction in their own tax return.

The ATO's reasonable travel allowance amounts do not cancel the award rules. They are tax administration figures. They do not determine how much an employee must receive under an award.

For super, look at what the payment is actually for. Expense reimbursements are generally treated differently from payments that reward ordinary hours of work. If the arrangement is unclear, obtain payroll or tax advice rather than marking every travel code as exempt.

A practical payroll process

Set up separate earning codes for the daily fares allowance, paid travel time, kilometres, distant work allowances and reimbursements. Give each code an effective date.

Have supervisors record the site and travel event when approving time. Payroll should not have to guess from a handwritten note saying only “travel”.

Before finalising a pay run:

1. Confirm the employee's award, classification and employment type.
2. Check where the employee started and finished that day.
3. Separate the normal commute from employer-directed travel.
4. Check whether transport, a vehicle, accommodation or meals were provided.
5. Apply the allowance amount current for that pay period.
6. Test whether paid travel time creates overtime or another penalty.
7. Review PAYG, super and Single Touch Payroll treatment by payment type.
8. Keep the supporting records with the pay-run data.

That gives you a clean audit trail and makes back pay checks much less painful.