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Monthly tax tip:
The working from home tax deduction claim methods are changing this financial year. The shortcut method was available up to 30 June 2022 which allowed taxpayers to claim 80 cents per hour when working from home. This was introduced when taxpayers shifted to working from home during COVID-19 lockdowns and was meant to cover all home office expenses. The ATO announced the draft changes of these deductions recently which will be explained in detail below. We suggest keeping records, receipts and logbooks/diaries when working from home. This will allow you to compare your claim methods and choose the highest claim.
Fixed Rate Method:
- 67 cents per hour can be claimed when working from home
- This rate covers internet and mobile/home phone costs, electricity/gas, computer consumables and stationery
- A separate claim can be made for depreciation of home office assets such as computer equipment and office furniture
- A diary should be kept calculating the hours spent working from home
- This method is most popular for those that work from home every now and again
Actual Cost Method:
- All home office running costs can be claimed as per the appropriate work usage (electricity, phone/internet, computer expenses, stationery)
- All receipts should be kept and logbooks/diaries to calculate usage
- This method is most popular for those that work from home frequently
Method Comparison (Actual Cost):
- $90/month internet costs – claiming 15% = $13.50/month
- $60/month mobile phone costs – claiming 50% = $30/month
- $150/month electricity costs – claiming 5% = $7.50/month
- Total of $51/month tax deduction
Method Comparison (Fixed Rate):
- 20 hours per month x $0.67 = $13.40/month tax deduction
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