Working from Home – Deductions

Work from Home Covid 19
Due to COVID-19, there are many of us who are now working from home. If you are working from home, you may be able to claim a deduction for expenses you have incurred relating to your work. This can be done using shortcut method or actual method depending on your circumstance.

Shortcut-Method

In order to simply your returns, ATO has introduced a Shortcut method to calculate your deductions for home office expenses. The key thing to bear in mind is that, this is a temporary method and is only available to use from 1st March 2020 till 30th June 2020. Anyone who is working from home during the given timeline, can use this method.

Shortcut Method allows you to claim 80 cents per hour for each hour you work from home during the period 1st March to 30th June 2020.

You can choose to use this rate if and only if:

You are working from home fulfilling your employment duties and not just occasionally carrying out tasks of checking emails or answering phone calls. If you are using this method, you cannot claim any other expense working from home. additional running expenses has been incurred during this time.

The above method covers expenses such as

  • phone and internet
  • decline in value of equipment and furniture
  • Utilities
You don't necessarily need a dedicated area at home to use this method. However, it is very crucial to keep a record of number of hours you have worked from home. This can be in form of your timesheets, rosters, a diary or document that state the number of hours you have worked from home.
Actual Cost-Method

The actual cost method allows you to claim any additional cost you may have incurred while working from home. These expenses include:

  • Utilities electricity and gas for cooling, lightning and heating,
  • phone and internet expenses,
  • decline in value of home office furniture,
  • decline in value of phone, laptop and similar devices,
  • cleaning (provided you have a dedicated working space),
  • computer consumables and stationery.

To calculate the work-related portion of your actual expenses, you must have the records.

  • record of actual work hours from home
  • document a four-week period to show your usual work pattern work out a cost of your cleaning expenses
  • work out the cost of heating, lightning and cooling expenses
  • work out the decline in value of depreciating assets

You must take into account other members of your household when you work out your expenses. If a member of your household is using the same area of the house or the same service when you’re working, you must apportion your expenses accordingly.

For more information, reach out to us on hello@amitaggarwal.com.au or call us on 0432 120 120.

Amit Aggarwal

Accounting – Life Risk – Finance Strategist

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