Due to the COVID-19 pandemic, there has been an unprecedented rise in the number of people working from home.
The ATO have introduced a temporary simplified method when claiming a deduction for working from home during the COVID-19 period.
Working from home during COVID-19
Due to the COVID-19 pandemic and the impact it has had on society and the workforce, there has been an unprecedented rise in the number of people working from home.
The ATO have introduced a temporary simplified method when claiming a deduction for working from home during the COVID-19 period. The rate has increased from 52 cents to 80 cents for every hour worked from home, from 1 March 2020 until at least 30 June 2020, with the potential for extension.
When can I claim a deduction?
- You must have paid for the expense
- The expense has to directly attribute to the earning of your income
- Have a kept record to prove the expense
*You cannot claim a deduction for:
- items provided by your employee,
- an item you have paid for, then been reimbursed by your employer
What expenses can I claim?
- Electricity expenses – heating, cooling & lighting the area where you are working
- Cleaning costs for a dedicated work area
- Phone and internet expenses
- Computer consumables and stationery
- Equipment including computers, printers, phones for full cost of items up to $300
- Any equipment > $300 can be depreciated each year
What expenses am I unable to claim?
- Mortgage, rent, interest & rates
- General household items an employer may usually provide eg tea, coffee
NEW – Shortcut Method to claim deductions
Backdating the period to 1 March 2020, as long as you were working from home to fulfil your usual employment duties, and incurring additional running expenses;
- You can claim a rate of 80 cents per work hour for all additional running expenses
- You do not need to have a previously required “dedicated area” you are working from
**NOTE: You may only use the 80 cents per hour of work rate from 1 March 2020, any deductions claimed for home office expenses between 1 July 2019 – 28 February 2020 must use the 52 cents rate, should you use the fixed rate method.
Fixed Rate Method – claim all of these
- 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture
- The work-related portion of your actual costs of phone and internet expenses, computer consumables and stationery
- The work related portion of the decline in value of a computer, laptop or similar piece of equipment
Actual cost method
- Claim the actual work related portion of all your running expenses – this must be calculated on a reasonable basis
If you have any queries regarding the above, for assistance please contact us on (02) 4601 1000 [Camden] or (02) 4210 6030 [Wollongong].