Claiming working from home Expenses

By Sally Beveridge and Adam Kanarek

During the lockdowns in 2020 and 2021 many of us had to work from home. In this period, the ATO offered more generous claims for working from home expenses. In 2022, we started to return to our workplaces, but many now work  from home as well as the workplace. Consequently, the ATO revised the working from home deductions.

Revised Fixed Rate Method

From 1 July 2022 the fixed rate method has been increased from 52 to 67 cents and you no longer need a dedicated home office space to claim under this method.

The revised fixed rate of 67 cents per hour covers energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables incurred for the hours you worked from home.

If this method is chosen, no other deductions for any expenses covered by the rate can be claimed.

However, items that can be claimed separately include:

  • Decline in value of assets used while working from home, such as computers and office furniture.
  • Repairs and maintenance of those assets.
  • In some limited circumstances occupancy and cleaning expenses of a dedicated home office

The ATO requires taxpayers to keep a record of all hours worked from home for the entire income year. This record can be in any form if they are kept as they occur. You must also keep a record for at least one of the expenses covered by the hourly rate, for example, one electricity bill, one gas bill, one phone/internet bill.

For any claims of additional expenses not covered by the hourly rate, a record of each expense is required.

Actual Cost Method

The actual cost method has not changed from the 2022 financial year to 2023 and taxpayers must continue to collect all receipts and bills for expenses which they wish to deduct.

Also, taxpayers must illustrate how they have calculated their work-related and private portion of expenses being claimed. This includes a record of the actual hours worked from home for the full year, or a record of a four-week continuous period that represents the usual working patterns for the year.

How EQ8 can help you

If you have worked from home during the year, please let us know. We will help to determine the most suitable method for you to use, based on the records you have kept.