Home Office Expense

Working from home? Tips on claiming home office expenses

Due to the COVID-19 pandemic and the increased number of employees working from home, the ATO has announced a new ‘shortcut method’, with a fixed rate of 80 cents per hour that covers all your work-related expenses – including gas and electricity.

This method was initially applied from 1 March to 30 June 2020, however, it has now been extended and can be used for the period 1 July 2021 to 30 June 2022.

Comparing ‘Shortcut method’ and ‘Fixed rate method’

Fixed-rate method

Under this method, you can claim the fixed rate of 52 cents for each hour you work from home. You can use this method if you have a dedicated work area in your home and have records that show the work-related portion of expenses not covered by the fixed rate per hour and the number of hours spent working at home.

Separately under this method, you can claim the expenses of actual phone and internet expenses, stationery and work-related devices. However, you’ll need to keep records and the business usage of the expenses.

Shortcut method

Like the fixed-rate method, you can claim 80c per hour under this method. However, it is an all-inclusive claim! For example, you can’t claim other home office expense items such as internet, phone and office equipment or stationery separately.

Which method best suits you?

Variables such as your record-keeping, expenses incurred on other work-related purchases and hours working from home should be considered for achieving the best tax outcomes.

It may be worth discussing this issue to make sure you get a maximum tax benefit by choosing the method that best suits you.

Records required

You’re not required to keep receipts or calculate the specific costs of items you may have bought during this period, but you will need to keep records of the number of hours you’ve worked. For instance, it could be your timesheets, diary, rosters or calendar schedule.