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CHANGES FOR 2023
To be eligible to claim a deduction for working from home expenses, you must:
To calculate your working-from-home expenses, you can use the revised fixed rate method or the actual cost method.
REVISED FIXED RATE METHOD
The revised fixed rate method allows you to claim 67 cents per hour you work from home for the expenses listed below. You no longer require a dedicated home office to use this method.
Expenses included in the revised fixed rate are:
You can’t claim a separate deduction for any of the expenses the revised fixed rate includes.
You can claim a separate deduction for:
ACTUAL COST METHOD
The actual cost method allows you to claim a deduction for the actual expenses you incur as a result of working from home.
You may be able to claim a deduction for each of the expenses you incur, such as:
The actual cost method requires detailed calculations and records. For example, you will need to know and have records of the cost per unit of electricity and the average units used per hour.
These shortcut arrangements do not prohibit people from making a working-from-home claim under existing arrangements, where you calculate all or part of your running expenses.
The ATO will review the special arrangement for the next financial year as the COVID-19 situation progresses.
RECORD KEEPING CHECKLIST
Revised Fixed Rate Method
You will need the following records:
You will also need records for items you claim as a separate deduction.
From 1 July 2022 to 28 February 2023, the ATO accept a record which represents the total number of hours worked from home (for example a 4 week diary).
From 1 March 2023 onwards, a record of all the hours you worked from home is required.
Actual Cost Method
You will need to keep a record for every expense you claim.
Also, you need the following evidence to show you have incurred additional running expenses:
You can work out your work-related expenses using records for the entire year or over a 4-week period that represents your work use – for example, using a diary or itemised bill.
Decline in Value of Assets and Equipment
You will need records for depreciating assets, that show:
OCCUPANCY EXPENSES
Claims for occupancy expenses are allowed only if the home is used as a place of business. Occupancy expenses include rent, mortgage interest, water rates, repairs, house insurance premiums.
The claim can be made as an apportionment of total expenses incurred on a floor area basis.
Warning: Being able to claim theses expenses may affect your ‘main residence exemption’ for capital gains tax purposes if you sell your house in the future.
WHEN IS A HOME A PLACE OF BUSINESS?
The following factors, none of which is necessarily conclusive on its own, may indicate whether, or not, an area set aside has the characteristics of a place of business:
If you use your home to carry out income-producing activities as a matter of convenience, you are not entitled to a deduction for occupancy expenses. It would be rare for an employee to be able to claim occupancy expenses.
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