Shortcut method
Due to the COVID-19 pandemic, and the subsequent rise in employees working from home, the ATO introduced a simplified way to calculate home office expenses, such as:
- Phone and internet expenses.
- Heating/cooling and lighting costs.
- The decline in the value of equipment and furniture.
To use this method:
- You don’t need to have a dedicated work area.
- You can’t claim any other expenses for working from home.
- You need to keep a record of the hours worked from home via, for example, a timesheet, roster, diary or documents that note the hours you worked from home.
Under this method, you can claim $0.80 per hour for each hour you work from home during these periods:
- 2019-20 financial year: Total number of hours worked from home between 1 March 2020 and 30 June 2020 × $0.80.
- 2020-21 financial year: Total number of hours worked from home between 1 July 2020 and 30 September 2020 × $0.80.
Importantly, you will need to use one of the other deduction methods in relation to working from home before 1 March 2020 or after 30 September 2020.
It’s, therefore, important to also understand the other methods, especially their record-keeping requirements.
Fixed-rate method
You can claim $0.52 per hour for each hour you work from home for home office expenses, such as:
- Heating/cooling, lighting and cleaning costs.
- The cost of repairs to equipment and furniture.
- The decline in the value of furniture, such as a desk or chair.
To use this method:
- You need a dedicated work area.
- You need to keep a record of the hours worked from home—actual hours for the year, or over a four-week period (representative of your pattern of work for the year), for example, via a timesheet, roster, diary or documents that note the hours you worked from home.
Please note: This method doesn’t include phone and internet expenses, computer consumables and stationery, and the decline in the value of equipment, such as phones and laptops. These can be claimed in addition to the above and need to be calculated separately.
Actual cost method
You can claim for home office expenses, such as:
- Phone and internet expenses.
- Computer consumables and stationery.
- Heating/cooling, lighting and cleaning costs.
- The decline in the value of equipment and furniture.
To use this method:
- You don’t necessarily need a dedicated work area.
- You need to keep receipts for home office expenses, and calculate the work-related portion of your home office expenses.
- You need to keep a record of the hours worked from home—actual hours for the year, or over a four-week period (representative of your pattern of work for the year), for example, via a timesheet, roster, diary or documents that note the hours you worked from home.
Moving forward
Work-related expenses can be complex, so it’s important to consider seeking professional advice from registered tax agents like Carrick Aland prior to lodging your tax return. We can help you to understand your personal circumstances in relation to your eligibility, and the required record-keeping to claim a deduction for work-related expenses.
From tradies to farm employees across the Western and Darling Downs, check out the tax toolkits for your profession on our blog or download our Individual Tax Checklist here »
The content does not take into account your personal objectives, financial situation or needs. You should consider taking advice tailored to your personal circumstances. Contact Carrick Aland or call 07 4669 9800 for more information on our tax services. Please note all information is for Australian residences only.
