Working from home deductions
The ATO has realised a number of changes to the deductions available to those claiming costs for working from home.
For individuals working from home, we have summarised the deductions available for the 2022/2023 financial year. For more detailed information, please refer to www.ato.gov.au/home or contact us.
There are two methods available when calculating your work from home deductions, the fixed rate method or actual costs method. There are a number of eligibility criteria that needs to be met.
Fixed rate method
Eligibility
You must have;
incurred additional expenses as a result of working from home, minimal tasks such as taking phone calls and checking emails do not qualify as working from home
kept records of the total hours you worked from home
kept records of the expenses you have incurred whilst working from home
received no reimbursement from your employer in relation to these expenses
Rate
from the 1st July 2022, the fixed rate method is 67 cents per hour that you have worked from home
Expenses included in the fixed rate
home and mobile internet or data expenses
mobile and home phone usage
electricity and gas for heating, lighting and cooling
stationary and computer consumables, such as printer ink and paper
If you are using the fixed cost method, you are unable to claim any further deductions for these expenses above including if you are using your mobile phone out of the home, this expense is covered in the fixed rate claim. Please note you cannot claim the fixed rate for any time not spent working whilst at home.
You can claim separately for expenses such as computers, laptops, tablets and office furniture such as desks, chairs and bookshelves. For items over $300 a deduction for the decline in value is available for the portion used for work purposes. Items under $300 can be immediately deducted for the portion used for work purposes.
The expenses mentioned above must have been incurred in the course of gaining or producing your assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.
Keeping records
you must keep records showing the total number of hours you worked from home for the year, this cannot be an estimate. Records can be timesheets, rosters, logs of time spent accessing employer systems, time tracking apps or a diary or similar document.
one document, such as an invoice, bill or credit card statement for each of the additional running expenses which you have incurred during the income year such as electricity, gas, internet and mobile phone.
There is a transitional period where from 1st July 2022 to 28th February 2023, you can use a 4 week diary as an indictive period of your working from home hours. From 1st March 2023, all hours need to be recorded each week.
Other details
a seperate office space is no longer a requirement to claim the fixed rate method
Actual costs Method
Eligibility
you must have incurred additional expenses as a result of working from home, minimal tasks such as taking phone calls and checking emails do not qualify as working from home
have kept records of the total hours you worked from home
have kept records of the expenses you have incurred whilst working from home
no reimbursement from you employer has been received in relation to the below expenses
must not be working at home in the same room with other household members that aren’t working from home
must have a dedicated office
Expenses included
home and mobile internet or data expenses
mobile and home phone usage
electricity and gas for heating, lighting and cooling
stationary and computer consumables, such as printer ink and paper
decline in value of depreciating assets such as computer, office furniture or similar items over $300
cleaning your dedicated home office
Only the portion related to working from home is deductible.
How to calculate deductible proportion
Phone data and internet
Using an itemised bill, work out for a four week period the percentage your work related calls are of your total calls. Eg. 400 minutes of call were made in total for the period. 200 minutes of these were work related, therefore 50% usage is for work related activities.
Electricity and gas
The actual cost method requires detailed calculations and records. For example, you will need to know and have records of the cost per unit of electricity and average units used per hour. For electricity review each appliance used, calculate the number of kilowatts used per hour and then look at your electricity account and calculate the cost per kilowatt.
Cleaning
Proportion cleaning expenses to the amount used to clean the office space
Keeping records
you must keep records showing the total number of hours you worked from home for the year, this can be recorded over a 4 week period if it represents your yearly schedule. Records can be timesheets, rosters, logs of time spent accessing employer systems, time tracking apps or a diary or similar document.
documents, bills, invoices of costs incurred in relation to working from home along with calculations showing the working from home usage