Working from home? Know what you can claim! Posted on June 9, 2020
An estimated 10.5 million Australian workers are experiencing changed employment conditions since the outbreak of COVID-19(1). More than 50% are doing paid work from home. So what and how can you claim?
First consider which way you’d like to calculate your expenses:
- Shortcut method: The ATO has introduced a new simplified way to calculate and report your additional at-home running expenses between 1 March and 30 June 2020. This is known as the shortcut method and enables you to claim a rate of 80 cents per work hour for all additional running expenses.
- Fixed rate method:
- 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture
- Applicable to the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery and the work-related portion of the decline in value of a computer, laptop or similar device.
- Actual cost method: Claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.
In order to qualify to claim specific expenses under methods 2 & 3, the expense must have been paid by you personally (not your employer), have already been paid at the time of the claim, be directly related to your income and have receipt evidence of the spend.
Shortcut method – WFH
You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:
- Working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- Incurring additional deductible running expenses as a result of working from home.
- Not working from a separate or dedicated area of your home set aside for working, such as a private study.
However, if you elect to use the shortcut method the claim is designed to cover all expenses associated with working from home including, but not limited to, electricity, phone, internet usage, depreciation of plant and equipment and stationary costs
Expenses you can claim (Fixed rate & Actual cost methods)
- Electricity expenses associated with heating, cooling and lighting the area from which you are working and running items you are using for work (actual cost method only)
- 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, stationery, furniture and furnishings (furniture and furnishings only depreciable or claimable under actual cost method) – you can claim either the
- full cost of items up to $300
- decline in value for items over $300.
The ATO app is an extremely helpful tool in tracking your deductible expenses throughout the year.
Reach out to your Account Manager to work through any changed working conditions to ensure due diligence and compliance.
1. RoyMorgan, 5 May 2020 http://www.roymorgan.com/findings/8401-coronavirus-working-from-home-may-2020-202005050514
2. ATO Website, 2 June 2020 https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/
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