Changes to working from home deduction – started 1 Jul 2022
Check your eligibility to calculate your working from home expenses using the fixed rate method – 67 cents per hour.
Changes to the fixed rate method
The fixed rate method for calculating your deduction for working from home expenses has been revised. This revised method is available from 1 July 2022.
The fixed rate method has been revised to:
- increase the rate per work hour that you can claim when you work from home
- change the expenses the rate covers
- change the records you need to keep
- remove the requirement to have a home office set aside for work.
If you don't use the revised fixed rate method, you need to use the actual costs method to claim a deduction for the additional expenses you incur as a result of working from home.
Eligibility to claim
To use the revised fixed rate method, you must:
- incur additional running expenses as a result of working from home
- have a record of the total number of hours you work from home and the expenses you incur while working at home
- have records for expenses the fixed rate per work hour doesn't cover and that show the work-related portion of those expenses.
How it works
You can claim 67 cents for each hour you work from home during the relevant income year. The rate includes the additional running expenses you incur for:
- home and mobile internet or data expenses
- mobile and home phone usage expenses
- electricity and gas (energy expenses) for heating, cooling and lighting
- stationery and computer consumables, such as printer ink and paper.
The rate per work hour (67 cents) includes the total deductible expenses for the above additional running expenses. If you're using this method, you can't claim an additional separate deduction for these expenses.
How to claim expenses the fixed rate doesn't include
You can separately claim a deduction for the work-related use of technology and office furniture such as chairs, desks, computers, bookshelves. These are generally depreciating assets that decline in value over time. You can also claim the repairs and maintenance of these items.
If the item cost $300 or less and you use it mainly for a work-related purpose, you can claim an immediate deduction for the cost in the year you buy it. This may include items, such as keyboards, computer mouses, power boards, desk lamps and chargers.
You can claim a deduction for the decline in value of depreciating assets over the effective life of the item, if it either:
- cost more than $300
- forms part of a set that together cost more than $300.
You may choose to work out the decline in value of low-cost assets and low-value assets with a cost or opening adjustable value of less than $1,000 through a low-value pool. You calculate decline in value of depreciating assets in a low-value pool using a diminishing value rate.
Where you use your depreciating assets for both work and private purposes, you need to apportion your decline in value deduction. You can only claim the work-related portion as a deduction.
In limited circumstances where you have a dedicated home office, you may also be able to claim:
- occupancy expenses (such as mortgage interest or rent)
- cleaning expenses (such as the cost of cleaning that relates to the work-related use of a room in your house set up as a home office).
Calculate your deduction
Calculate your deduction manually using the steps below.
Steps for calculating your work from home deduction manually
Before you calculate your deduction, check you have all the records you are required to keep.
Step 1: Work out the total number of hours you worked from home
Work out the total number of hours you worked from home during the income year using your records – for example, your timesheets, rosters, diary or similar document you keep at the same time as when you work.
Step 2: Multiply your total work from home hours by the rate per hour
Multiply the total number of hours worked from home during the year by 67 cents per hour.
Step 3: Work out the decline in value of depreciating assets used for working from home
Calculate the work-related decline in value of any depreciating assets that you used to work from home during the income year.
Use our Depreciation and capital allowances tool to help work this out.
For more information, see Depreciating assets you use for work.
Step 4: Work out the amount of any other working from home expenses you incurred that the rate per hour doesn't cover
Use your records to work out the amount of any other work-related expenses you incurred as a result of working from home.
Don't include any amount for expenses the rate per work hour covers.
Step 5: Add the amounts at step 2, step 3 and step 4 together
The total of step 2, step 3 and step 4 is the amount you claim as a working from home deduction in your tax return.
Record keeping for the fixed rate method
To claim your working from home deduction using this method, you must keep:
- a record of the number of actual hours you work from home during the entire income year – for example, a timesheet, roster, diary or other similar document
- at least one record for each of the additional running expenses you incur that the rate per work hour includes – for example, if you incurred electricity and stationery expenses keep one quarterly bill for your electricity expenses and one receipt for your stationery expenses
You need to keep your records for 5 years (in most cases) from the date you lodge your tax return.
You must keep records for depreciating assets from the time you buy them, that shows
- the amount spent on depreciating assets you buy
- the percentage of the year you use your depreciating assets exclusively for work, such as a diary or similar document.
You must also keep these records for other running expenses you are claiming as a separate deduction.
You need to keep these records for 5 years from the date of your last claim for decline in value.
Record keeping for 2022–23
If you haven't been keeping a record of the actual hours you worked from home, for the 2022–23 income year only, you must be able to provide both:
- a representative record of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023 – for example, any kind of record of the hours you worked from home for a particular period that you can apply to the whole 8 month period.
- a record of the total number of actual hours worked from home for the period 1 March 2023 to 30 June 2023.
If you haven't kept receipts or written evidence of your depreciating assets, you may still be able to claim a decline in value deduction if:
- you didn't keep it because you were using the fixed rate method or shortcut method to calculate your working from home deduction in the income year you purchased the asset
- you have other evidence or records which showyou incurred the cost of the depreciating assetwhen you bought the depreciating assetyour work-related use of the depreciating asset.TR 97/24 Income tax: relief from the effects of failing to substantiate.