The ATO allows you to claim a tax deduction for the running expenses you incurred as a direct result of working from home. These are the costs relating to the use of facilities within your home, and can include:
- electricity and/or gas for heating or cooling and lighting
- home and mobile internet or data expenses
- mobile and home phone expenses
- stationery and office supplies
If you would like to claim the hours you worked from home as a tax deduction, you will need to keep a record of all the hours you work from home for the entire year. This can be in the form of a timesheet, roster, diary, or similar document.
To calculate what you are able to claim as a tax deduction for the above, we apply one of two methods:
1. Fixed rate method
- This is a fixed amount (67 cents) that you can claim per hour you spent working from home.
- In order to claim a tax deduction through this method, you will need to fill out a diary/logbook recording the total number of hours you worked from home during the financial year. A template to record the number of hours spent working from home can be downloaded here.
- You also need to keep at least one monthly or quarterly invoice you have paid for each of the expenses that are covered by the fixed rate method (for example: phone bill, electricity bill, internet bill).
2. Actual cost method
- This method calculates the actual running expenses you incurred when working from home. However, you will need to apportion these costs for both private and work purposes, as only the portion attributable to home office use will be deductible for tax purposes.
- In order to claim a tax deduction through this method, you will need both a record across a 4-week period during the year that shows the number of hours spent working at home, and the receipts/bills of the running expenses you have incurred during the year.
Only one of the above two methods can be used to determine your working from home tax deduction, and we generally apply the method that provides the highest deduction.
