The Australian Taxation Office have changed the way taxpayers claim deductions for costs incurred when working from home.
Taxpayers can choose one of two methods to claim working from home deductions. The methods are:
While the “Actual Cost Method” hasn’t changed from previous years, the “Fixed Rate Method” has. See the changes below:
Rate
- The cents per work hour has increased from 52 cents to 67 cents.
What’s covered by the rate
- The revised fixed rate of 67 cents per work hour covers energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables. No additional deduction for any expenses covered by the rate can be claimed if you use this method.
What can be claimed separately
- The decline in value of assets used while working from home, such as computers and office furniture.
- The repairs and maintenance of these assets.
- The costs associated with cleaning a dedicated home office.
Home office
- The revised fixed rate method doesn’t require taxpayers to have a dedicated home office space to claim working from home expenses.
Record keeping
- Taxpayers need to keep a record of all the hours worked from home for the entire income year – the ATO won’t accept estimates, or a 4-week representative diary or similar document under this method from 1 March 2023.
- Records of hours worked from home can be in any form provided they are kept as they occur, for example, timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year.
- Records must be kept for each expense taxpayers have incurred which is covered by the fixed rate per hour (for example, if taxpayers use their phone and electricity when working from home, they must keep one bill for each of these expenses).
We have provided a diary template which we believe this will be very helpful with compiling your WFH hours for the 2024 Financial Year.
Click here to access the diary template
If you have any questions about how to record your hours worked from home, feel free to give our office a call on 03 9762 7344.
Regards,
The team at Knox Taxation
