Working from home is becoming the norm for many people. It’s important to think about the deductible expenses that you may be able to claim when working from home and make sure you include them in your tax return.
The rules have changed drastically when compared to prior years as you can no longer just estimate how many hours you have worked at home. Even though the rule changes have just been announced, the new rules apply from 1 July 2022, and it is important to understand the record keeping requirements.(Please see further below for record keeping requirements).
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
- have records that show you incur these expenses.
The ATO has 2 methods available to calculate your claim, revised fixed rate method or the actual cost method.
Revised Fixed Rate Method - from 1July 2022
You no longer need a dedicated work area or separate room used as an office. The revised rate of 67 cents per work hour covers your running expenses.
Expenses included in the revised fixed rate are:
- data and internet
- mobile and home phone usage
-
electricity and gas
- computer consumables (e.g. printer ink)
- Stationery.
You can claim a separate deduction for the decline in value of assets used while working from home, such as computers and office furniture and the repairs and maintenance of these assets. You can claim for cleaning, only if you have a dedicated home office.
You must keep records of hours worked and work-related expenses and a diary to show work usage for the internet and assets. See the ATO guide.
As these changes have just been announced, the ATO have transitional record keeping requirements:
For 2022–23 only taxpayer must keep record of:
-
Representative of total hours worked from home during 1 July to 28 February 2023; and
- Total actual hours worked from home during 1 March to 30 June 2023
From 2023–24 actual hours worked from home required for entire year;
- Timesheets, rosters or diary kept contemporaneously
- Logs of time spent accessing employer systems or online business systems
- Time-tracking apps
In short - you will need to keep a constant, actual record of hours worked at home.
ATO Home Office Actual Cost Method
To use the actual cost method, you claim for the actual expenses incurred by working from home. This method does require detailed calculations and records. If you plan to use this method, see ato.gov.au/home
Talk to us about calculating your WFH deduction. We are here to help.
