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Working from Home Expenses

Working from Home Expenses

Working from Home Expenses

The ATO has announced a temporary simplified method for individual taxpayers to calculate deductible home office expenses incurred as a result of working from home during the pandemic.

The ATO will allow individuals to claim a deduction for all running expensesincurred during the period 1 March 2020 to 30 June 2020, based on a rate of $0.80 for each hour that an individual carries out genuine work duties from home. This is a simpler alternative to the existing arrangements, which generally require an analysis of specific running expenses incurred and more onerous record-keeping.

This simplified method is designed to cover all deductible running expenses associated with working from home and incurred from 1 March 2020 to 30 June 2020, including the following:

  • Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.
  • Cleaning costs for a dedicated work area.
  • Phone and internet expenses.
  • Computer consumables (e.g. printer paper and ink) and stationery.
  • Depreciation of home office furniture and furnishings (e.g. an office desk and a chair).
  • Depreciation of home office equipment (e.g. a computer and a printer).

Under the $0.80/hour method, separate claims cannot be made for any of the above running expenses, including for depreciation of work-related furniture and equipment.

As a result, this method could result in a claim for running expenses being lower than a claim under existing rules.

For example, the existing $0.52/hour home office method covers heating, cooling, lighting, cleaning and the depreciation of office furniture, but other genuine work-related home office expenses may be claimed separately (subject to the usual substantiation rules). These separately claimable expenses would generally be the work-related portions of phone and internet expenses, computer consumables, stationery and the depreciation of a computer, laptop or a similar device.

However, the existing $0.52/hour method does require some additional record-keeping and calculations, whereas under the new $0.80/hour method:

  • there is no requirement to have a separate or dedicated area at home set aside for working;
  • multiple people living in the same house could claim under this method (e.g. a couple living together could each individually claim running expenses they have incurred while genuinely working from home, at $0.80/hour each); and
  • an individual will only be required to keep a record of the number of hours worked from home as a result of the pandemic, during the 1 March 2020 to 30 June 2020 period. This record can include timesheets, diary entries, notes or even rosters.

Working from home expenses that are incurred prior to 1 March 2020 must be claimed using existing claim arrangements which, broadly, require:

  • an analysis of specific running expenses incurred as a result of working from home; and
  • more onerous record-keeping (e.g., the requirement to provide receipts and similar documents for expenses being claimed, as well as the requirement to maintain a time usage diary or similar record to show how often a home work area was used during the year for work purposes).

Additional information on the various methods for claiming home office expenses is available on the ATO website.


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The content of this newsletter is general in nature. It does not constitute specific advice and readers are encouraged to consult their Ruddicks adviser on any matters of interest. Ruddicks accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. This information is current as at 08 April 2020, and was published around that time. Ruddicks particularly accepts no obligation or responsibility for updating this publication for events, including changes to the law, the Australian Taxation Office’s interpretation of the law, or Government announcements arising after that time.

Any advice provided is not ‘financial product advice’ as defined by the Corporations Act. Ruddicks is not licensed to provide financial product advice and taxation is only one of the matters that you need to consider when making a decision on a financial product. You should consider seeking advice from an Australian Financial Services licensee before making any decisions in relation to a financial product. © Ruddicks 2020

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