The proposed changes to the working from home fixed rate method of claiming deductions have now been finalised by the Australian Taxation Office however, there is a significant change to the expenses able to be claimed and the record keeping requirements.
There are two methods for claiming working from home deductions. This is the revised fixed rate method and the actual cost method.
From 1 July 2022, the revised fixed rate method will allow you to claim 67 cents per hour you work from home. The expenses covered by the revised fixed rate method include:
- data and internet
- electricity and gas
- mobile and home phone usage
- computer consumables (e.g. printer ink)
- stationery
You are not able to separately claim for any of the above listed items as these are covered by the fixed rate amount. However, you are able to separately claim a deduction for the work-related portion of the decline in value of depreciating assets – such as office furniture and technology, the repairs and maintenance to these assets and cleaning (only if you have a dedicated home office).
With these changes, there is also no longer a requirement to have a dedicated home office however, from 1 March 2023 onwards, you will need to keep actual records on the hours worked (e.g. a timesheet, roster, diary etc). You will also need evidence of expenses incurred (e.g. if you use your phone and electricity when you work from home, keep one bill for each of these expenses).
The alternative to using the revised fixed rate method is the actual cost method. Under this method, you will need to keep records for every expense you want to claim for as well as evidence of your personal and work related use of the items purchased or services used. Under this method, you can work out your work related expenses using records for the entire year or over a 4 week period that fairly represents your work use (e.g. a diary or itemized bill).
For a more in depth look at the eligible working from home expenses and methods which can be used to claim, click here.
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Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
