Changes to working from home deductions
The Australian Taxation Office (ATO) has adjusted the way you can claim deductions for costs incurred while working from home. This blog outlines the two methods for claiming deductions and the process for each.
First things first…are you eligible for working from home deductions?
To claim working from home expenses you must:
- be working from home to fulfil your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls,
- incur additional running expenses as a result of working from home, and
- have records that show you incur these expenses.
From 1 July 2022, the ATO has two methods available to calculate your claim, revised fixed rate method or the actual cost method.
Revised fixed rate method
- You no longer need to have a separate home office or dedicate work area in order to use the fixed rate method.
- If more than one individual is working from home at the same time, each individual will be able to apply the fixed rate method if they each meet the requirements listed above.
- Revised rate of 67 cents per work hour covers your running expenses.
What you need to do
To claim your working from home deduction using this method, you must provide :
- A record of the number of actual hours you work from home during the entire income year (e.g. timesheet or roster). Our tracker template can help to record your WFH hours for tax purposes.
- At least one record for each of the additional running expenses you incur, that the rate per work hour includes. The documents must show what the expense is and that you incurred the expense.
If you haven’t been keeping a record of the actual hours you worked from home, for the 2023 income year only, you must be able to provide both:
- A record which is representative of the total number of hours you worked from home during the period from 1 July 2022 to 28 February 2023; and
- A record of the total number of actual hours you worked from home for the period 1 March 2023 to 30 June 2023.
Click here for our easy to use daily tracking template to help you keep a clear record.
Expenses included in the revised fixed rate:
- Data and internet
- Mobile and home phone usage
- Electricity and gas
- Computer consumables (e.g. printer ink)
Taxpayers can also separately claim the work-related portion of:
- Immediate deduction for items that cost less than $300 (e.g. keyboards, computer mouses, desk lamps, chargers)
- Depreciation of office furniture and computers (items that cost more than $300)
- Repairs and maintenance of these assets
- Cleaning (only if you have a dedicated home office)
Actual cost method
For this method you claim for the actual expenses incurred by working from home. You will be required to keep detail records and an invoice/receipt for every expense you claim.
Expenses you can’t claim
Things that you aren’t able to claim as a tax deduction include:
- Coffee, tea, milk and other general household items, even if your employer may provide these at work
- Costs that relate to your children’s education
- Items your employer provides (e.g. laptop or phone)
- expenses where your employer reimburses you for the cost
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