Claiming Working From Home Expenses

Individuals who have been working from home this financial year probably have some work-related expenses they can claim.  There are now two ways to calculate a work from home deduction:

• fixed rate method; and
• actual cost method.

Using the fixed rate method, taxpayers can claim a rate of 67 cents per hour worked at home.

This amount covers additional running expenses, including electricity and gas, phone and internet usage, stationery, and computer consumables. A deduction for these costs cannot be claimed elsewhere in the tax return.

Taxpayers can however separately claim any depreciating assets, such as office furniture or technology. They can refer to the Depreciation and capital allowances tool on the ATO's website for assistance in this regard.

It is important that taxpayers have the right records. For the fixed rate method, this includes a record of:

• the total number of hours worked from home (for the entire year);
• the additional running expenses covered by the rate per hour that they incurred (e.g., phone bills and electricity bills); and
• any depreciating assets (and how much of their use of that asset was work-related).

For the actual cost method, taxpayers need a record of:

• their hours worked from home (whether that be the total hours, or a continuous four-week period representing the usual pattern of work, if their hours are consistent throughout the year);
• their additional running expenses (e.g., phone bills and electricity bills); and
• how the deduction was calculated. Taxpayers (and tax practitioners) can refer to the ATO's website for more information regarding how to claim working from home expenses.

For more information, visit the Australian Taxation Office website.

Ref: ATO website, Tax Professionals Newsroom, 4 March 2024