Know your new rates for work-from-home tax deductions
16 May 2023
5
min read
The way you can claim tax deductions for working from home has changed.
The Australian Tax Office (ATO) has changed the way you can claim working from home tax deductions.1
You may need to keep different records for your tax return.
What’s changing for working-from-home tax deductions
If you work from home, you can choose one of two methods to claim working-from-home deductions:
- Actual cost method
- Fixed-rate method
The ATO has changed the way you can claim the fixed-rate method.
Fixed-rate method changes
The revised fixed-rate method applies from 1 July 2022 and can be used when you are working out deductions for your 2022–23 income tax returns. The changes are:
Fixed-rate method rate
- The cents per work hour has increased from 52 cents to 67 cents.
What’s covered by the rate
- The revised fixed rate of 67 cents per work hour covers energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables.
You no longer need a dedicated home office to use the fixed-rate method.
Actual cost method
The actual cost method hasn’t changed. You can claim the actual work-related portion of all running expenses.
Make sure you’re eligible to claim work-from-home tax deductions
To claim working-from-home expenses, you must be working from home to fulfil your employment duties, not just carrying out minimal tasks, such as occasionally checking emails or taking calls.
You also must incur additional expenses as a result of working from home. You can’t claim for things like coffee, tea, milk and other general household items.
You need to keep a record of all the hours worked from home for the entire income year.
Why the rate is changing
The ATO said the changes aim to better reflect contemporary working-from-home arrangements.
ATO Assistant Commissioner Tim Loh said the changes provided benefits if you’re using the revised fixed rate method in 2022–23.
Items that are difficult and tedious for everyday Aussies to calculate actual work-use, like phone, internet and electricity expenses, are included in the revised rate. Assets and equipment that typically give taxpayers a bigger deduction, such as technological items and office furniture, are not included in the revised rate and need to be claimed separately,” Mr Loh said.
“Another benefit is that you no longer need a dedicated home office to use the fixed-rate method.”
What you can claim
The revised fixed rate of 67 cents per work hour covers:
- energy expenses (electricity and gas)
- phone usage (mobile and home)
- internet
- stationery
- computer consumables.
You can’t claim additional deductions for any expenses covered by the rate if you use this method. But you can separately claim:
- decline in value of assets used while working from home, such as computers and office furniture
- repairs and maintenance of these assets
- costs associated with cleaning a dedicated home office.
1. Media release, 16 February 2023, ATO announces changes to working from home deductions ATO announces changes to working from home deductions, at ato.gov.au