As the saying goes there are two certainties in life: death and taxes. Fortunately, if you work from home you may be eligible to claim some of the cost of your utilities and other items as a deduction.
Eligibility
The Australian Tax Office (ATO) has strict guidelines as to what constitutes working from home.
To claim working from home expenses you must:
- Be working from home in order to carry out your work duties - this doesn't include performing minimal tasks such as occasionally checking your work emails
- Have incurred additional running expenses as a result of working from home - these can't have been reimbursed by your employer
- Have records that prove you incurred those expenses
You can only calculate your deduction using one of the official methods outlined by the ATO. If you're claiming a deduction for a home expense that you use both for work and privately you can only claim the work-related portion as a deduction.
How to claim working from home expenses
There are two methods for claiming your work from home expenses. Each has its own rules around record keeping and what you can claim.
Revised fixed rate method
This method was originally introduced during the pandemic due to the sheer number of people that were now working from home.
This method no longer requires you to have a dedicated home office set
up. It allows you to claim $0.67 per hour you work from home for expenses such as:
- Energy expenses. Electricity and gas costs you incur for heating, cooling or lighting your home
- Data and phone expenses. Home internet, mobile phone and home phone expenses
- Stationary and office supplies. Things such as pens, notepads, printer ink etc.
It's important to note that you can't also claim a separate deduction for any of the expenses used in the revised fixed rate method. You can however make a separate deduction for the decline in value of home office goods and cleaning expenses via the actual cost method (which we'll detail below).
In order to claim the revised fixed rate you will need to keep the following records:
- A record of all the hours you worked from home. This can be a timesheet, roster or similar document
- Evidence you paid for the expenses you're claiming via the revised fixed rate method. This can be one bill as an example for each expense e.g. internet, phone, electricity etc.
- Other records for each item you claim as its own deduction
The ATO has released advice on the level of detail required for records used in the revised fixed rate method. For the period from July 1 2022 to February 28 2023 the ATO will accept a record that represents the total number of hours worked from home e.g. a four-week diary. However, for the period from March 1, a record of all the hours worked from home is required.
You can use the myDeductions tool in the ATO app to keep to help you log expenses and save receipts throughout the year to make things easier come tax time.
Actual cost method
The actual cost method allows you to claim for all the same expenses as the revised fixed rate method as well as:
- The decline in value of home office goods. This includes your office furniture such as chairs, desks and equipment like a computer, laptop and software. You can also claim the repair and maintenance of these depreciating assets
- Cleaning expenses. Only in the case that you have a dedicated home office
Record keeping for the actual cost method is significantly more involved and requires you to keep detailed records and calculations including things like the cost per unit of electricity and gas and the average units used per hour.
You must keep:
- Evidence in the form of receipts, bills and invoices. That shows the supplier, cost, type of goods, date the bill was paid and the date the document was issued.
- Evidence of your personal and work-related use of the items
Your work-related expenses can be calculated using records for the entire financial year or using a four-week period that represents your work use e.g. a diary or itemised bill
If you're claiming a decline in the value of assets or equipment you must provide evidence of:
- The cost of the item and the date and location of its purchase
- When you began using that item for work-related activities
- How you worked out the percentage of work-related use e.g. a diary
- Either a copy of the "Commissioner's determination of effective life" that you used to work out the depreciation of an item or how you worked out its effective life if you didn't use that document
- Which method you chose to calculate the decline in value
For smaller items that cost $300 or less, you may claim an immediate deduction for their cost in the year of
purchase. This can include things such as computer mice, power boards, desk lamps, chargers and computer
keyboards.
The ATO provides a home office expenses calculator to assist you if you're filing your tax return without assistance from a registered tax agent.
Best NBN plans for working from home
We recommended signing up for at least either an NBN 50 if it's just you or NBN 100 internet plan if there are multiple working from home at the same time.
Compare your options from the cheapest NBN 50 and 100 plans here:
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#1
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amaysim
All Fixed Line nbn®
NBN50
$45/mth
Min. cost $45
|
|
#2
|
Belong
All Fixed Line nbn®
NBN Standard Plus – Unlimited
$55/mth
Min. cost $55
|
|
#3
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Dodo
All Fixed Line nbn®
Editor's Pick
nbn50 Unlimited Plan
$57.99/mth
Min. cost $57.99
|
|
#4
|
Moose NBN
All Fixed Line nbn®
nbn 50/20 Premium
$59.80/mth
Min. cost $59.80
Link not supplied
|
|
#5
|
Tangerine Telecom
All Fixed Line nbn®
Value Plus NBN 50/20
$64.90/mth
Min. cost $64.90
|
|
#6
|
Flip
All Fixed Line nbn®
Unlimited Family nbn50
$68/mth
Min. cost $68
|
|
#7
|
Swoop
All Fixed Line nbn®
nbn® Home Everyday
$69/mth
Min. cost $69
Link not supplied
|
|
#8
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Superloop
All Fixed Line nbn®
Extra-value nbn50/20
$69/mth
Min. cost $69
|
|
#9
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Kogan Internet
All Fixed Line nbn®
Silver Unlimited
$69.90/mth
Min. cost $69.90
|
|
#10
|
TPG
All Fixed Line nbn®
nbn50 Unlimited Plan
$69.99/mth
Min. cost $69.99
Link not supplied
|
|
#1
|
amaysim
FTTN, FTTB, FTTC
NBN100
$50/mth
Min. cost $50
|
|
#2
|
Belong
FTTN, FTTB, FTTC
NBN Premium – Unlimited
$59/mth
Min. cost $59
|
|
#3
|
Dodo
FTTN, FTTB, FTTC
Editor's Pick
nbn100 Unlimited Plan
$62.99/mth
Min. cost $62.99
|
|
#4
|
Moose NBN
FTTN, FTTB, FTTC
nbn 100/20 Elite
$63.80/mth
Min. cost $63.80
Link not supplied
|
|
#5
|
Tangerine Telecom
FTTN, FTTB, FTTC
Speedy NBN 100/20
$67.90/mth
Min. cost $67.90
|
|
#6
|
Kogan Internet
FTTN, FTTB, FTTC
Gold Unlimited
$69.90/mth
Min. cost $69.90
|
|
#7
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iiNet
FTTN, FTTB, FTTC
nbn Home Fast Liimitless
$69.99/mth
+ $10 Upfront
Min. cost $79.99
Link not supplied
|
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#8
|
Swoop
FTTN, FTTB, FTTC
nbn® Home Fast
$72/mth
Min. cost $72
Link not supplied
|
|
#9
|
Superloop
FTTN, FTTB, FTTC
Family nbn100/20
$74/mth
Min. cost $74
|
|
#10
|
TPG
FTTN, FTTB, FTTC
nbn Home Fast Unlimited Plan
$74.99/mth
Min. cost $74.99
Link not supplied
|
Working from home expenses you can't claim
The ATO also provides guidance on the sorts of things you can't claim when working from home:
- General household items. This includes things such as coffee, tea, milk and toilet paper. While these things might be provided at a work site the ATO doesn't consider them eligible in a WFH context.
- Assets provided by your employer. This includes a laptop, mobile phone etc.
- Other expenses where your employer provides reimbursement
You also can't make a claim for when a child is home from school, that includes things like iPads, a child's desk and online learning tools.
The information is general in nature only. It should not be taken as constituting professional taxation advice from WhistleOut. You should consider seeking independent legal, financial, taxation or other advice to check how this information relates to your unique personal circumstances.
WhislteOut is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.
Dylan Crismale
Digital Content Editor
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