We'll email you the contents of your shopping cart, so you can easily continue where you left off on your next visit.
Whether you’re new to working from home or your home office is well-established, it pays to know what tax deductions you could claim – and how to calculate them.
While many people have had to quickly adjust to working from home during the COVID-19 (coronavirus) epidemic, the good news is you may be able to claim some of your running costs as a tax deduction.
The Australian Taxation Office (ATO) is well ahead of the curve here with updated advice on the rules for employees who have set up a home office as a result of COVID-19 compared to people who have regular home office expenses and/or people whose home is their principal place of business.
Here’s a summary of what could be claimable and ways to calculate your tax deductions while you work from home.
The big question the ATO asks is “How much of this expense is work related?” So, if the expense is eligible, you could claim the work-related proportion for:
Note: Until recently you needed a dedicated work area to claim running expenses (see below for update).
Normally if you’re an employee who doesn’t have a dedicated work area at home you wouldn’t be able to claim much at all for running expenses. In March 2020, the ATO announced new tax deduction rules for employees working from home as a result of the COVID-19 (coronavirus) crisis but:
For more information, download the ATO’s guide for employees working from home.
A new flat rate of 80 cents per work hour for claiming additional running expenses was introduced in March 2020 for employees working from home due to coronavirus.
If you don’t have a dedicated home office space, you could claim this flat rate. It wraps up traditional running expenses such as electricity and office supplies with phone and internet expenses and depreciation of a computer. But be aware, you wouldn’t be able to make further claims for any of these expenses. Talk with an accountant about whether you might be able to claim more using the fixed rate plus actual expenses method below instead.
Remember: You’ll need to keep at least a four-week work diary (paper or electronic) to prove the hours you worked, showing for each day:
If you regularly work at home, this method allows you to claim:
Remember: You'll also need records of your hours worked at home. Talk with an accountant about ways to manage all your receipts and records.
If your home has a dedicated work space or room and you're disciplined about keeping records, you could calculate the work-related share for most or all home office expenses. The Australian Tax Office has a home office expenses calculator and a depreciation and capital allowances tool to help you add it all up. Again, speak with an accountant about what you can and can't claim.
If you are running your own business from home, you may also be able to claim:
This information is general and only summarises basic tax deductions relating to working from home. It does not take into account your individual circumstances. The ATO provides some calculators that may help you, though as tax is a complex subject, see an accountant for individual advice.
* This is general information only and does not constitute taxation or legal advice. Other requirements under the tax law apply. Seek professional tax and/or legal advice to determine whether you are eligible to claim a deduction for any purchases.