Employees working from home

To claim a deduction for working from home, all of the following must apply:

  • You must have spent the money.

  • The expense must be directly related to earning your income.

  • You must have a record to prove it.

This means you cannot claim a deduction for items provided by your employer or if you have been reimbursed for the expense.


If you are not reimbursed by your employer, but instead receive an allowance from them to cover your expenses when you work from home, you:

  • Must include this allowance as income in your tax return.

  • Can claim a deduction as outlined in this fact sheet.


Expenses you can claim

If you work from home, you will be able to claim a deduction for the additional running expenses you incur. These include:

  • Electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work.

  • Cleaning costs for a dedicated work area.

  • Phone and internet expenses.

  • Computer consumables (for example, printer paper and ink) and stationery.

  • Home office equipment, including computers, printers, phones, furniture and furnishings - you can claim either the:

+ Full cost of items up to $300.

+ Decline in value for items over $300.

A temporary simplified method (or shortcut method) of calculating additional running expenses will be accepted for the period starting 1 March 2020 until at least 30 June 2020.


Expenses you can’t claim

If you are working from home only due to COVID-19, you:

  • Cannot claim occupancy expenses such as mortgage interest, rent and rates.

  • Cannot claim the cost of coffee, tea, milk and other general household items your employer may otherwise have provided you with at work.


Calculating running expenses

There are three ways you can choose to calculate your additional running expenses:

  • Shortcut method.

  • Fixed rate method.

  • Actual cost method ─ claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.


Fixed rate method

Claim all of these:

  • A rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture.

  • The work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery.

  • The work-related portion of the decline in value of a computer, laptop or similar device.


Shortcut method

You can claim a rate of 80 cents per work hour for all additional running expenses, including:

  • Electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses.

  • The decline in value and repair of capital items, such as home office furniture and furnishings.

  • Cleaning expenses.

  • Your phone costs, including the decline in value of the handset.

  • Your internet costs.

  • Computer consumables, such as printer ink.

  • Stationery.

  • The decline in value of a computer, laptop or similar device.


If you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.


You must keep a record of the hours you worked at home as a result of COVID-19, for example time-sheets or diary notes.


MORE INFORMATION:

For the latest advice, information and resources, go to https://www.health.gov.au/

Feel free to contact us at office@gordondu-associates.com.au or (08) 9345 0499.


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